Hero Motors IPO: SEBI Approves ₹1,200 Crore Issue – All You Need to Know
- 16th September 2025
- 02:30:00 PM
- 4 min read
Summary
Hero Motors has received approval from the Securities and Exchange Board of India (SEBI) for its ₹1,200 crore Initial Public Offering (IPO). The issue comprises a fresh equity issuance of ₹800 crore and an offer for sale (OFS) of ₹400 crore. Proceeds will be used for debt repayment, new equipment, acquisitions, and general corporate purposes. ICICI Securities, DAM Capital Advisors, and JM Financial are the lead managers.
Mumbai, September 16, 2025 – Auto component maker Hero Motors has received the SEBI nod for its ₹1,200 crore IPO, marking a significant step toward its stock market debut. The company confirmed the approval in a filing with the markets regulator on Monday.
Hero Motors IPO Size and Structure
The Hero Motors IPO will raise ₹1,200 crore through a mix of fresh issue and offer for sale.
• Fresh Issue of ₹800 crore – The funds will be used to repay ₹285 crore of debt, invest ₹237 crore in new machinery at the Gautam Buddha Nagar plant, finance acquisitions, and cover general corporate purposes.
• Offer for Sale (OFS) of ₹400 crore – Led by OP Munjal Holdings (₹390 crore), with Bhagyoday Investments and Hero Cycles offloading ₹5 crore worth of shares each.
The IPO has a face value of ₹10 per equity share, with allocation structured as 50 percent for Qualified Institutional Buyers (QIBs), 15 percent for Non-Institutional Investors (NIIs), and 35 percent for Retail Individual Investors (RIIs).
Additionally, Hero Motors may pursue a pre-IPO placement of up to ₹160 crore, which would proportionately reduce the size of the fresh issue.
Use of Proceeds and Growth Plans
Proceeds from the fresh equity issue will strengthen Hero Motors’ financial position and support expansion. Debt repayment of ₹285 crore will lower interest costs, improving margins. The planned investment of ₹237 crore in new equipment will enhance production efficiency and capacity at the Gautam Buddha Nagar facility.
The company has also indicated interest in pursuing acquisitions, signalling a strategy to diversify operations and strengthen its foothold in the competitive auto component industry. Market observers believe these moves could position Hero Motors to capture greater domestic and export opportunities in the premium two-wheeler segment.
Business Profile and Market Position
Hero Motors, led by Pankaj Munjal, is a key manufacturer of engine and transmission parts for two-wheelers. The company’s client portfolio includes international brands such as BMW, Ducati, and Harley-Davidson, underlining its global reach.
The company initially filed for a ₹900 crore IPO in August 2024, but later revised and re-submitted its Draft Red Herring Prospectus (DRHP) in July 2025, expanding the issue size to ₹1,200 crore.
Industry Context
The timing of the Hero Motors IPO coincides with robust momentum in the auto and auto component sector. India’s automotive market is benefitting from rising domestic demand, increased exports, and a shift towards premium two-wheelers. Global supply chain realignment is also creating opportunities for Indian manufacturers to expand their presence in international markets.
Analysts note that the capital infusion from the IPO could help Hero Motors scale operations, reduce leverage, and strengthen its ability to serve global OEMs. With rising investments in R&D and technology, the sector is expected to remain attractive to investors.
Lead Managers and Registrar
The issue will be managed by ICICI Securities, DAM Capital Advisors, and JM Financial, with KFin Technologies serving as registrar. These institutions will handle the IPO process, including book building, allotment, and investor coordination.
What’s Next for Investors
Following SEBI’s approval, the company is expected to announce the Hero Motors IPO price band, opening date, and subscription period in the coming weeks. Once the bidding window closes, the allotment and listing process will follow as per market timelines.
Industry experts say the IPO will be closely watched by both institutional and retail investors given the company’s strong global partnerships and expansion plans. The fresh funds are expected to drive growth and improve financial resilience, making the IPO an important event in the current primary market calendar.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
