Hero Motors, led by Pankaj Munjal and a key player in the auto components sector, has refiled its Draft Red Herring Prospectus (DRHP) with SEBI for a Rs 1,200 crore initial public offering (IPO). This marks an increase from its earlier proposed issue size of Rs 900 crore filed in August 2024.
The IPO will consist of a fresh issue of up to Rs 800 crore and an offer for sale (OFS) of up to Rs 400 crore by promoters. The OFS component includes shares worth Rs 390 crore from O P Munjal Holdings and Rs 5 crore each from Bhagyoday Investments and Hero Cycles.
According to the DRHP, Rs 285 crore from the fresh issue will be used to repay or prepay outstanding borrowings, while Rs 237 crore will fund capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh. The company also plans to utilize funds for inorganic growth through acquisitions and general corporate purposes.
Hero Motors may also consider a pre-IPO placement of Rs 160 crore, which would reduce the fresh issue size accordingly.
The IPO will allocate 50% of the offer to qualified institutional buyers, 15% to non-institutional investors, and 35% to retail investors.
Promoters currently hold a 91.65% stake in the company. Hero Motors supplies engine and transmission components to global brands like BMW, Ducati, and Harley-Davidson. As of December 2024, it operated six manufacturing facilities across India, the UK, and Thailand.
ICICI Securities, DAM Capital Advisors, and JM Financial are acting as book-running lead managers, while KFin Technologies is the registrar to the issue.
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