Hero Motors, a leading Indian auto components manufacturer specializing in electric vehicle (EV) powertrain solutions, has refiled its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth Rs 1,200 crore. The company, led by Pankaj Munjal of the Hero Group, had earlier filed for a Rs 900 crore IPO in 2023 but has now increased the issue size to support debt reduction and expansion of its EV components manufacturing capacity.

The Rs 1,200 crore IPO will comprise a fresh equity issue of Rs 800 crore alongside an offer for sale (OFS) of shares worth Rs 400 crore by existing shareholders. Proceeds from the fresh issue will primarily be used for debt repayment and funding capital expenditure for expanding Hero Motors’ EV powertrain facility in Uttar Pradesh.

The updated DRHP signals Hero Motors’ renewed intent to tap the capital markets amid growing investor interest in EV component makers. ICICI Securities, JM Financial, and DAM Capital have been appointed as book running lead managers for the offering.

Leading supplier of electric and conventional powertrains to global OEMs

Hero Motors designs and manufactures electric and non-electric powertrain systems for OEMs across India, Europe, the US, and ASEAN markets. Its product portfolio includes powertrains for e-bikes, two-wheelers, hybrid vehicles, off-road vehicles, and commercial electric vehicles.

In the fiscal year 2024, Hero Motors posted a 67 per cent year-on-year decline in net profit, weighed down by increased expenses. Revenue, however, grew slightly by about 1 per cent, reflecting margin pressures despite the company’s leadership in the EV supply chain.

Hero Motors operates two business segments — powertrain solutions and alloys & metallics — with six manufacturing units spread across India, the UK, and Thailand. The company aims to leverage its upcoming IPO proceeds to strengthen its balance sheet and capitalize on the growing electric mobility market.