Hero Motors, the flagship auto-components company of the Hero Motors Company (HMC) Group, has filed a draft red herring prospectus (DRHP) with SEBI to raise Rs 900 crore via an initial public offering.
According to the documents submitted by the company, the public issue is a combination of fresh issuance of equity shares worth Rs 500 crore, and an offer-for-sale (OFS) of Rs 400 crore worth shares by promoters.
Hero Motors, backed by South Asia Growth Invest, filed the DRHP with the market regulator on August 23.
Promoter OP Munjal Holdings plans to sell shares worth Rs 250 crore through the OFS, while other two promoters Bhagyoday Investments and Hero Cycles will each offload shares worth Rs 75 crore.
OP Munjal Holdings currently owns a 71.55 percent stake in Hero Motors on a fully diluted basis. Bhagyoday Investments and Hero Cycles hold 6.28 percent and 2.03 percent stakes, respectively, while investor South Asia Growth Invest LLC has a 12.27 percent shareholding in the company.
ICICI Securities, DAM Capital Advisors and JM Financial are the book running lead managers to the issue.
Hero Motors may explore a pre-IPO placement of Rs 100 crore before filing the Red Herring Prospectus with the Registrar of Companies (ROC). Should this placement occur, the proceeds from it would reduce the amount allocated for general corporate purposes from the fresh issue, as per the report, it said in the DRHP filing.
Hero Motors is one of India’s leading automotive technology companies and provides powertrain solutions (both electric as well as non-electric powertrains) to automotive original equipment manufacturers (OEMs) in United States, Europe, India and the Association of Southeast Asian Nations (ASEAN) region.
It supplies powertrain solutions to global customers such as BMW AG, Ducati Motor Holding SPA, Enviolo International Inc, Formula Motorsport, HUMMINGBIRDEV Inc), HWA AG, and leading global electric bicycle (e-bike) manufacturers.
Hero Motors reported a net profit of Rs 17 crore for the fiscal year ending March 2024, a decrease of 58 percent compared to the previous year’s profit of Rs 40.5 crore. The company’s revenue for the year stood at Rs 1,064.4 crore from the previous year’s Rs 1,054.6 crore.