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 proposed Hero Motors IPO targets a total fundraise of approximately ₹1,200 crore, comprising a fresh issue of ₹800 crore and an Offer for Sale (OFS) of ₹400 crore by promoters including OP Munjal Holdings, Bhagyoday Investments, and Hero Cycles. 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: To be announced
• IPO closing date: To be announced (Typically three days after opening)
• Basis of allotment: To be announced (Within 3 working days post closure)
• Refund initiation: To be announced (Shortly after basis of allotment)
• Expected listing date: To be announced (Usually within a week following allotment finalisation)

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: To be announced (Face value: ₹10 per share)
• Minimum lot size: To be announced
• Minimum investment: To be announced
• Maximum retail investment: To be announced

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 

Revenue and Profit Table

Cash Flow Table

Key Highlights:

• Revenue remained steady around ₹1,000 crore in FY23-FY24, with growth likely in 9MFY25 as orders increased.
• Net profit showed volatility, with ₹99 crore in FY22 dipping in FY23 and rising modestly in FY25 partial period, reflecting investment and market conditions.
• Operating cash flows are positive overall but free cash flow swings indicate capex and working capital dynamics.
• Margins have softened since FY22 but remain healthy for an auto-component manufacturer focused on quality and R&D.
• The company has maintained operational efficiency amid industry supply chain challenges and segment transitions.

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

• Unique focus on powertrain and transmission parts in two-wheeler & automotive segments.
• Strong OEM relationships supporting stable revenue.
• Diversified manufacturing footprint enhances operational resilience.
• Investments in R&D position company well for EV transition.

Risks

• Industry cyclicality and dependence on OEM production volumes.
• Margin pressure from raw material price volatility.
• Competitive pressures in a fragmented auto components market.

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

• The public issue includes a fresh equity component of ₹800 crore to aid expansion, modernisation, and working capital.
• Additionally, an Offer for Sale worth ₹400 crore will allow promoters and investors like OP Munjal Holdings and Bhagyoday Investments to partly exit.​
• The equity shares will be listed on the BSE and NSE for improved liquidity and market visibility.
• Promoters will retain substantial control while benefiting from partial stake monetisation.
• The company may consider a pre-IPO placement of up to ₹160 crore, possibly adjusting the fresh issue size before filing final prospectus.
• Retail investors will have a standard SEBI mandated quota with expected institutional anchor participation.

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.

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