IPO Overview
Incorporated in 2001, Hero Motors Limited is an automotive technology company that designs, develops, manufactures, and supplies powertrain solutions to OEMs across the US, Europe, India, and the ASEAN region, alongside an Alloys and Metallics business segment. The company operates differently from a traditional vehicle manufacturer — instead of selling finished motorcycles or cars under its own consumer brand, Hero Motors develops and manufactures powertrain systems, gears, transmissions, electric powertrain products, and metallic components for global automotive OEMs. Its products are used across two-wheelers, performance vehicles, e-bikes, electric vehicles, heavy-duty vehicles, and emerging applications such as eVTOL aerospace systems. The company has six manufacturing facilities across India, the United Kingdom, and Thailand.
The Hero Motors IPO is a mainboard IPO that opens on Wednesday, September 16, 2026 and closes on Friday, September 18, 2026. The offer consists of both a fresh issue and an offer for sale component — the fresh issue includes 7,14,28,571 shares aggregating up to ₹600 crore, and the offer for sale portion includes 4,76,19,047 shares aggregating up to ₹400 crore. The total IPO size is ₹1,000 crore, with a price band of ₹79 to ₹84 per share. The shares are proposed to be listed on both BSE and NSE, with a tentative listing date of September 23, 2026.
IPO Detailed Information
Issue Details
| Parameter | Details |
| IPO Type | Book Built – Mainboard |
| Listing Exchange | BSE & NSE |
| Anchor Investor Date | 15 September 2026 |
| IPO Open Date | 16 September 2026 |
| IPO Close Date | 18 September 2026 |
| Allotment Date | 21 September 2026 (Expected) |
| Refund Initiation | 22 September 2026 |
| Credit to Demat | 22 September 2026 |
| Listing Date | 23 September 2026 (Tentative) |
| Price Band | ₹79 – ₹84 per share |
| Face Value | ₹10 per share |
| Lot Size | 178 shares |
| Minimum Investment (Retail) | ₹14,952 (1 lot = 178 shares) |
| Issue Size | ₹1,000 crore |
| Fresh Issue | 7,14,28,571 shares (₹600 crore) |
| Offer For Sale (OFS) | 4,76,19,047 shares (₹400 crore) |
Issue Break-up
| Category | Allocation |
| Qualified Institutional Buyers (QIB) | ~50% |
| Non-Institutional Investors (NII/HNI) | ~15% |
| Retail Individual Investors (RII) | ~35% |
OFS / Selling Shareholders
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 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%.
Objects of the Issue (Fund Utilization)
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.
- Repayment / prepayment of outstanding borrowings — ₹190 crore
- Capital expenditure for capacity expansion at Gautam Buddha Nagar, UP — ₹200 crore
- Inorganic growth opportunities and strategic initiatives
- General corporate purposes — remaining proceeds
Lead Managers & Registrar
- Book Running Lead Managers: ICICI Securities Ltd., DAM Capital Advisors Ltd., and JM Financial Ltd.
- Registrar to the Issue: Kfin Technologies Ltd.
Promoters & Management
Promoters on record include Pankaj Munjal, Charu Munjal, Abhishek Munjal, and O P Munjal Holdings. Hero Cycles Limited sells a thin OFS slice.
Pankaj Munjal is the Chairman, and Amit Gupta is the CEO and Managing Director of Hero Motors. As a key promoter, Amit Gupta plays a strategic role in the company’s global expansion and technology-driven manufacturing vision.
Company Details
Hero Motors designs, develops, manufactures and supplies engineered powertrain solutions to automotive OEMs. Its products and solutions include CVTs, EV transmissions, electric motors, integrated drive units and gear sets. The business operates through Powertrain Solutions and Alloys & Metallics, serving conventional and electric mobility applications across two-wheelers, e-bikes, passenger vehicles, off-road vehicles, heavy-duty vehicles and eVTOL applications.
Global Clients Include:
BMW AG, Ducati Motor Holding S.P.A., Enviolo International Inc., Formula Motorsport Ltd., and Hummingbird.
Key Business Segments:
- Powertrain Solutions — CVTs, EV transmissions, electric motors, integrated drive units, gear sets
- Alloys & Metallics — metallic components serving EV, ICE, and hybrid vehicle makers
Manufacturing Facilities:
The company has six manufacturing facilities across India, the United Kingdom, and Thailand. The primary capacity expansion is planned at the Gautam Buddha Nagar facility in Uttar Pradesh using fresh IPO proceeds.
E-Mobility Growth:
E-mobility revenue stood at ₹273.29 crore in FY26, up 55.6% year-on-year, rising from 16.1% of total sales — highlighting the company’s rapid transition towards electric powertrain solutions.
Financial Snapshot
| Period | Total Income (₹ Cr) | PAT (₹ Cr) | EBITDA (₹ Cr) |
| FY24 | ₹1,083.42 | ₹17.04 | ₹86.28 |
| FY25 | ₹1,111.23 | ₹32.80 | ₹114.00 |
| FY26 | ₹1,216.74 | ₹41.17 | ₹147.78 |
Key Financial Metrics
Revenue from operations increased 9.1% to ₹1,188.4 crore in FY26 from ₹1,089.6 crore in FY25. Net profit rose 25.6% to ₹41.2 crore in FY26 from ₹32.8 crore in FY25. The reported EBITDA margin improved to 12.4% in FY26 from 10.5% in FY25 and 8.1% in FY24 — a 4.3 percentage-point expansion over two years.
Cash flow from operations increased sharply to ₹144 crore in FY26, nearly three times the ₹48.3 crore reported in FY25. Free cash flow turned positive at ₹68.4 crore in FY26, compared with negative ₹82.6 crore in FY25.
- ROCE: 19.77% | ROE: 8.56%
- Total Borrowings: ₹400.79 crore (FY26), eased slightly from ₹407.62 crore in FY25
- Post-IPO P/E: ~92.31x
Company Strengths
- Strong promoter lineage, long-standing relationships with leading global OEMs, and an expanding presence in the high-margin EV component value chain.
- E-mobility revenue of ₹273.29 crore in FY26, up 55.6% year-on-year — indicating rapid and successful transition into the electric powertrain space.
- Diversified global presence across the US, Europe, India, and ASEAN, with six manufacturing facilities across three countries — India, UK, and Thailand.
- Powertrain-neutral product mix — the Alloys and Metallics segment serves EV, ICE, and hybrid vehicle makers alike, reducing dependence on any single powertrain technology’s adoption curve.
- EBITDA margin expanded from 8.1% in FY24 to 12.4% in FY26, reflecting improving operating leverage and cost management over three years.
- Capacity expansion at Gautam Buddha Nagar plant funded by IPO proceeds positions the company well for growing OEM demand.
Key Risks & Challenges
- Risks involve revenue concentration among key customers, vulnerability to raw material cost fluctuations, and foreign exchange exposure across its export markets.
- Revenue increased by approximately 9% in FY26, but profit after tax grew at a differing pace. The FY26 operating cash flow improvement was mainly influenced by movements in other financial liabilities, and investors should examine whether this reflects a sustainable operating trend or a temporary release of working capital.
- Total borrowings increased from ₹304 crore in FY24 to ₹407.62 crore in FY25 before easing marginally to ₹400.79 crore in FY26 — the company remains significantly leveraged despite plans to repay ₹190 crore using IPO proceeds.
- Significant OFS component — ₹400 crore out of ₹1,000 crore total issue goes to promoter-group selling shareholders, indicating a partial promoter exit.
- Post-IPO valuation is stretched at ~92.31x P/E compared to listed peers such as Endurance Technologies at ~40.84x and CIE Automotive at ~17.68x — leaving limited room for short-term listing gains.
- PAT margin remains thin at ~3.46% in FY26 for a company of this scale, indicating that any cost pressure or demand slowdown could meaningfully impact profitability.
Disclaimer:
This document is for informational purposes only and should not be considered as investment advice. Investors should read the Red Herring Prospectus (RHP) carefully and consult a financial advisor before investing in any IPO. Market investments are subject to risk.
