Hero Motors IPO: Everything You Need to Know

Hero Motors Limited, the auto-component and mobility solutions arm of the Munjal family-led Hero Group, is preparing for its maiden public offering in 2025. Established as a specialised manufacturer of advanced drivetrain systems, gearboxes, and transmission assemblies, Hero Motors has grown into a key global supplier with manufacturing facilities across India, the UK, and Thailand. This IPO marks an important milestone for the company to fund capacity expansion, modernisation, and strategic acquisitions.

The ₹1,000 crore Hero Motors IPO comprises a fresh issue of ₹600 crore and an offer for sale of ₹400 crore. The issue opens on 16 September 2026 and closes on 18 September 2026, with a price band of ₹79 ₹84 per equity share.  Post-IPO, the company aims to strengthen its product portfolios and expand manufacturing capabilities to meet growing demand driven by the electric vehicle (EV) and legacy auto sectors.

This detailed blog covers essential information for Indian investors about the Hero Motors IPO, including the issue structure, company business and strategy, recent financial performance, sector outlook, and key investor considerations.

Hero Motors IPO Dates & Launch Details

• IPO opening date: 16 September 2026
• IPO closing date: 18 September 2026
• Basis of allotment: 21 September 2026
• Refund initiation: 22 September 2026
• Expected listing date: 23 September 2026 

Lead Book Running Managers: ICICI Securities Limited, DAM Capital Advisors Limited, and JM Financial Limited.

Registrar: KFin Technologies Limited

Price Band & Investment Details

• Price band: ₹79 to ₹84 per equity share
• Minimum lot size: 178 equity shares
• Minimum investment: ₹14,952 at the upper price band
• Maximum retail investment: ₹1,94,376 at the upper price band

Hero Motors IPO Structure

About Hero Motors

Hero Motors Ltd. specialises in designing and manufacturing high-quality auto powertrain and transmission components. It supplies to leading original equipment manufacturers (OEMs) globally, including Hero MotoCorp, contributing critical components for two-wheelers, passenger vehicles, and emerging EV models.

• Manufacturing plants located in India, the UK, and Thailand enabling proximity to major OEM buyers.
• Diverse product lines encompassing gearboxes, clutch systems, transmission shafts, and related precision components.
• Strong R&D focus to support innovation in EV drivetrain technologies and lightweight materials.
• Established relationships with leading global OEMs and Tier-1 suppliers, ensuring steady order book and market credibility.

With the automotive sector transitioning toward electrification and stricter emission norms, Hero Motors’ advanced components and scalable production capacity position it well to capitalize on rising sector demand.

Financials 

Key Highlights 

Revenue from operations increased 9.1% to ₹1,188.4 crore in FY26 from ₹1,089.6 crore in FY25. The growth follows a modest 2.4% rise in FY25 from ₹1,064.4 crore in FY24, indicating an improvement in the pace of revenue expansion.

Net profit rose 25.6% to ₹41.2 crore in FY26 from ₹32.8 crore in FY25. Profit growth exceeded revenue growth, suggesting that the company achieved better operating leverage or improved its cost absorption during the year. The reported margin improved to 12.4% in FY26 from 10.5% in FY25 and 8.1% in FY24. This represents a 4.3 percentage-point expansion over two years. The continuation of this trend will depend on product mix, utilisation, input costs, customer pricing and the scale-up of powertrain programmes.

Cash flow from operations increased sharply to ₹144 crore in FY26, nearly three times the ₹48.3 crore reported in FY25. This is important for a manufacturing business because earnings growth becomes more meaningful when it is accompanied by cash generation. Free cash flow turned positive at ₹68.4 crore in FY26, compared with negative ₹82.6 crore in FY25. The swing of ₹151 crore indicates a material improvement in the balance between operating cash generation, capital expenditure and working-capital movement. FY24 also recorded positive operating cash flow of ₹132 crore and free cash flow of ₹19.5 crore. Therefore, FY25 appears to be the weaker cash-conversion year, while FY26 indicates a recovery. The central question is whether the FY26 improvement reflects a sustainable operating trend or a temporary release of working capital.

Sector & Market Context

The automotive components sector is undergoing transformation with swift electrification, stricter emissions norms, and digital manufacturing technologies. The Indian automotive market remains the world’s fifth largest and is forecast to grow by 9-10% annually over the next several years, propelled by both domestic demand and global exports.

Hero Motors occupies a niche supplying drivetrain components critical for both ICE and electric vehicles, making it well-placed to leverage these industry trends. Increasing localisation and government incentives for manufacturing further support industry profitability and investment appetite.

Key Considerations for Investors

Strengths

• Engineering and product-development capabilities across both conventional and electric powertrain applications.
• A product portfolio spanning transmissions, gear sets, EV transmissions, electric motors and integrated drive units.
• Exposure to multiple vehicle categories and geographical markets, including the United States, Europe, India and ASEAN.
• Presence in the global e-bike powertrain market, alongside automotive and mobility applications.
• Long-standing relationships with global OEM customers and technology partners.

Risks

• Profit after tax has been volatile across the periods provided, making margin stability and conversion of revenue into net profit important variables to monitor.
• Free cash flow has fluctuated between positive and negative territory, reflecting the effect of capital expenditure and working-capital requirements.
• The business remains exposed to automotive cycles, OEM production volumes, model launches and changes in end-market demand.
• Input-cost inflation, pricing pressure from customers and competitive tendering may affect margins.
• The company is using a portion of fresh-issue proceeds for debt repayment and capacity-related equipment, which underscores the importance of leverage, financing costs and capital-allocation discipline.
• Technological change in EV and e-bike powertrains can create opportunity, but also requires continuing product development and investment.

Opportunities

• Strong secular growth driven by EV market development.
• Ability to capture share among new OEM entrants.
• Expansion of product line into advanced drivetrain and EV components.

IPO Structure

• Hero Motors’ ₹1,000 crore book-built IPO comprises a ₹600 crore fresh issue and a ₹400 crore offer for sale (OFS). The fresh issue will bring new capital into the company, while the OFS proceeds will go to the selling shareholders.
• Of the ₹600 crore fresh issue, the company proposes to use ₹190 crore to repay, prepay or redeem certain outstanding borrowings and ₹200 crore to purchase equipment for capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh. The remaining net proceeds are earmarked for inorganic-growth opportunities, other strategic initiatives and general corporate purposes.
• The ₹400 crore OFS comprises shares worth ₹395 crore sold by O.P. Munjal Holdings and ₹5 crore sold by Hero Cycles Limited. Unlike the fresh issue, the OFS does not add capital to Hero Motors’ balance sheet.
• The issue opens on 16 September 2026 and closes on 18 September 2026. The price band is ₹79–₹84 per equity share, and the minimum bid is 178 shares, requiring ₹14,952 at the upper end of the price band. The equity shares are proposed to list on BSE and NSE, with a tentative listing date of 23 September 2026.
• The promoter and promoter-group shareholding is expected to decline from 84.67% before the issue to 61.63% after the issue, while public shareholding is expected to rise to 38.37%. The offer has been reserved in accordance with the disclosed book-building structure: not more than 50% for QIBs, not less than 15% for NIIs and not less than 35% for retail bidders.

About the Company

Hero Motors Limited focuses on advanced automotive components for two-wheelers and four-wheelers, including gearboxes and drivetrains. As part of the Hero Group, the company supports India’s largest motorcycle manufacturer pushing into automotive electrification. Hero Motors operates globally, featuring manufacturing units in India, the UK, and Thailand, reflecting a growing footprint in key export markets.

Conclusion

For investors considering the auto-component space, Hero Motors presents a compelling blend of stability and growth potential coming from the two-wheeler and EV transition. With a strong backing from Hero Group and well-positioned R&D capabilities, the IPO offers a rare chance to invest in a niche but scalable manufacturing business. Monitoring valuation and competitive dynamics will be crucial to investment decisions.

Disclaimer: Always consider personal investment objectives and consult trusted sources before making any decisions.