The initial public offering (IPO) of Hero Motors commenced for subscription on Wednesday, September 16. The automotive technology company is offering its shares within a price band of Rs 79 to Rs 84 per equity share. Investors can apply for a minimum of 178 equity shares, with the bidding window closing on Friday, September 18.
Hero Motors seeks to raise a total of Rs 1,000 crore through this primary offering. This includes a fresh issuance of shares amounting to Rs 600 crore and an offer-for-sale (OFS) component of up to Rs 400 crore. The capital generated from the fresh issue is earmarked for debt repayment, funding capital expenditure for capacity expansion, facilitating inorganic growth opportunities, and general corporate purposes.
Company Profile and Financials
Established in April 1998, Ludhiana-based Hero Motors specializes in designing, developing, manufacturing, and supplying engineered powertrain solutions. The company caters to automotive original equipment manufacturers (OEMs) for both electric and non-electric powertrains across significant global markets, including the United States, Europe, India, and the ASEAN region.
Financially, Hero Motors reported a net profit of Rs 41.17 crore on a revenue of Rs 1,216.74 crore for the financial year ending March 31, 2026. This marks an improvement from the previous fiscal year (FY25), where the company posted a profit of Rs 32.80 crore on revenues of Rs 1,111.23 crore. Post-issue, the company is projected to command a market capitalization slightly exceeding Rs 3,815 crore.
Anchor Investors and Market Outlook
Ahead of its public debut, Hero Motors successfully secured Rs 300 crore from 24 anchor investors. These investors were allocated 3,57,14,284 equity shares at Rs 84 apiece. Notable participants in the anchor book included ICICI Prudential MF, Kotak Mahindra Trustee Company, JM Financial MF, and Societe Generale ODI, among others.
The IPO allocation reserves 50 percent of the net offer for qualified institutional bidders (QIBs), 15 percent for non-institutional investors (NIIs), and 35 percent for retail investors. In the grey market, Hero Motors shares were last heard commanding a premium (GMP) of Rs 19-20 per share, indicating a potential listing gain of approximately 22-23 percent for investors. The shares are slated for listing on both BSE and NSE on Wednesday, September 23.
Brokerage Recommendations
Several brokerage firms have weighed in on the Hero Motors IPO:
- SBI Securities: Rated 'Neutral', citing the valuation of 83.8 times its FY26 P/E as expensive compared to peers, despite strong profitability growth.
- Anand Rathi Share & Stock Brokers: Recommended 'Subscribe for long-term', highlighting the company's strong position in engineered powertrain solutions and global footprint, though noting the IPO is fully priced.
- Arihant Capital Markets: Issued a 'Neutral' rating, acknowledging positive outlook from EV and premium ICE segments but expressing caution due to a P/E of 92.31 times based on FY26 EPS.
- Marwadi Financial Services: Assigned 'Subscribe with caution', recognizing Hero Motors as a leading solutions provider in global E-Mobility but noting significant revenue concentration from its top customers.
- BP Equities: Recommended 'Subscribe', citing favorable growth prospects from an expanding e-mobility portfolio and strong profitability, while cautioning about execution risks at current valuations.
- Swastika Investmart: Rated 'Neutral', pointing to a P/E of 69–74 times versus a peer average of 50.2 times, suggesting limited upside cushion despite business potential.
- Master Capital Services: Advised 'Subscribe for long-term', emphasizing the company's positioning to benefit from both ICE and EV trends through its powertrain solutions and first-mover advantage in e-bike powertrains.
ICICI Securities, DAM Capital Advisors, and JM Financial are the book-running lead managers for the IPO, with Kfin Technologies serving as the registrar.