IPO Details
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Schedule of Hero Motors Ltd IPO
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Allotment of bids
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About Hero Motors Ltd IPO
The Hero Motors Ltd IPO comprises a fresh issue and an offer for sale, amounting up to ₹500 crore and ₹400 crore, respectively. The total issue size of this 100% book-built IPO is ₹900 crore.
Objectives of Hero Motors Ltd IPO
- Repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the company
- Capital expenditure of the company through the purchase of equipment required for expansion in capacity of its Gautam Buddha Nagar facility
- Funding working capital requirements of the company
- General corporate purposes
Hero Motors Ltd IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue | Up to ₹500 crore |
Offer for Sale | Up to ₹400 crore |
EPS in (in ₹) for FY 24 | 0.36 (Basic) |
Hero Motors Ltd IPO Share Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the offer |
Non-institutional Bidders | Not less than 15% of the offer |
Retail Individual Bidders | Not less than 35% of the offer |
Industry Outlook
Overall, globally two-wheeler volumes are anticipated to clock a CAGR of 3-5% between 2024 and 2029, reaching 17-22 million units in 2029 from 14-19 million units in 2024. In India, two-wheeler industry sales are projected to log 6-8% CAGR and reach volume of 25-27 million by fiscal 2029.
Company Information
Hero Motors Ltd is one of India’s leading automotive technology companies. It's engaged in designing, developing, manufacturing and supplying highly engineered powertrain solutions catering to automotive original equipment manufacturers (OEMs) in the United States, Europe, India and the Association of Southeast Asian Nations (ASEAN) region. As of March 31, 2024, the company operated six manufacturing facilities spread across India, United Kingdom and Thailand.
Hero Motors Ltd Strengths
India’s Leading Solutions Provider to Global E-Mobility Industry backed by Diversified Product Portfolio
Hero Motors Ltd is one of India’s leading solutions providers to the global e-mobility industry. Its revenue from sales to the e-mobility industry stood at ₹128.086 crore, ₹233.10 crore, and ₹179.043 crore, accounting for 12.03%, 22.10%, and 19.58%, respectively, of its revenue from operations for fiscal 2024, 2023, and 2022, respectively.
Growing Market Presence in the Electric Bikes and Premium Two-Wheelers Segments
Over the last five years, the company has expanded its market presence across automotive segments and has grown its business with premium two-wheeler OEMs globally. In the premium two-wheeler segment, it has partnered with OEMs such as BMW, Ducati and a leading American two-wheeler OEM among others.
Longstanding Relationships with Premier Global Original Equipment Manufacturers and Expertise in Delivering Solutions
Hero Motors Ltd global OEM portfolio includes a wide range of customers, spanning both automotive and non-automotive sectors. In the automotive sector, it has collaborated with global two-wheeler OEMs including BMW, Ducati, and Hero MotoCorp, Formula Motorsport, HWA Engineering, and Escorts.
Advanced Infrastructure with Geographically Diverse Operations
The company’s operational strength extends worldwide as it has strategically established manufacturing and assembly facilities to meet diverse market and customer demands. It believes that strategic geographic dispersion of its G&T facilities across India, the United Kingdom, and Thailand allow it to be in close proximity to its customers and offer cost competitive solutions.
Risks of Hero Motors Ltd IPO
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Hero Motors Ltd generates a portion of its revenue from operations from jurisdictions outside India, particularly Europe. Europe contributed 29.33%, 32.47%, and 29.34% of its revenue from operations in fiscal 2024, 2023, and 2022, respectively. Any adverse events affecting these jurisdictions could adversely impact its revenue from operations.
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The company’s business is dependent on the performance of certain industries, particularly e-bikes and two-wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
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The company's business largely depends upon its top 10 customers. In fiscal 2024, 2023 and 2022 its revenue from operations from top 10 customers was ₹819.186 crore, ₹936.923 crore, and ₹785.923 crore. The loss of any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.
All Financial Information about Hero Motors Ltd
Particulars (in Rs. crores)
Particulars (in Rs. crores)
Comparison with peers
| Parameter | Hero Motors Ltd | CIE Automotive India Ltd | Endurance Technologies Ltd | Sona BLW Precision Forgings Ltd | UNO Minda Ltd | Varroc Engineering Ltd |
|---|---|---|---|---|---|---|
Revenue from Operations (in ₹ crore for FY 24) | 1064.386 | 9280.349 | 10240.800 | 3184.770 | 14030.890 | 7551.937 |
P/E for FY 24 | NA | 17.92 | 51.81 | 77.76 | 75.28 | 15.44 |
Return on Net Worth (in % for FY 24) | 4.42 | 18.79 | 13.67 | 18.49 | 17.56 | 34.86 |
EPS (Basic) in ₹ for FY 24 | 0.36 | 29.66 | 48.38 | 8.83 | 15.36 | 34.43 |
IPO Registrar and Book Running Lead Managers
KFin Technologies Ltd is the registrar of Hero Motors Ltd IPO. The book running lead managers are:
- ICICI Securities Limited
- DAM Capital Advisors Limited
- JM Financial Limited
Business Model
The company designs, manufactures, and supplies highly engineered power train solutions catering to automotive OEMs.
They offer comprehensive solutions for designing, prototyping, validating, developing, and delivering system-level powertrain solutions for both electric as well as non-electric powertrains.
The company’s operations are organised into powertrain solutions and alloys and metallics. They include the engine or motor, energy storage systems, the transmission, driveshaft, and other related components that work together to deliver power to the vehicle's wheels. The company has entered into a joint venture with Yamaha Motors Japan in 2021 to manufacture electric motors under the ‘HYM’ brand which commenced operations in 2022.
Company Growth Trajectory
Hero Motors Ltd has established a track record of consistent revenue growth. Its revenue from operations increased from ₹914.191 crore in fiscal 2022 to ₹1064.386 crore in fiscal 2024. Further, its gross profit increased from ₹281.383 crore in fiscal 2022 to ₹419.370 crore in fiscal 2024 at a CAGR of 22.08%. The company’s gross margin increased from 30.78% in fiscal 2022 to 39.40% in fiscal 2024.
Hero Motors Ltd Profit & Loss
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Total Income (in ₹ crore) | 1083.419 | 1069.996 | 921.146 |
Profit Before Tax (in ₹ crore) | 24.312 | 52.133 | 137.636 |
Profit After Tax (in ₹ crore) | 17.035 | 40.506 | 99.022 |
EBITDA (in ₹ crore) | 82.808 | 97.351 | 167.934 |
EPS (Basic in ₹) | 0.36 | 1.13 | 2.80 |
Hero Motors Ltd Cash Flow Statement
| Parameters | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Net Cash Generated from Operating Activities (in ₹ crore) | 128.525 | 42.168 | 64.709 |
Net Cash Flow from / used in Investing Activities (in ₹ crore) | (76.927) | (206.722) | 13.531 |
Net Cash Flow from / used in Financing Activities (in ₹ crore) | (16.895) | 117.908 | (42.546) |
Total Cash and Cash Equivalent (in ₹ crore) | 42.261 | 7.558 | 53.398 |
How to Check Allotment Status of Hero Motors Ltd IPO?
You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Ltd. To check the status on the BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt
- Select the Issue Name from the drop-down. The issue name is the company’s name, which is Hero Motors Ltd
- Enter your application number or PAN number
- Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status
To check the status on the registrar’s website:
- Visit the website of Link Intime Private Ltd
- Choose ‘Public Issues’ from Investor Services dropdown
- Choose the name of the company from ‘Select Company’ dropdown
- Enter any of these — PAN Number, Application Number, DP/Client ID, Account Number / IFSC
- Click on Submit to check the status
How to Apply for Hero Motors Ltd IPO?
Here are the steps to apply for this IPO:
- Step 1: Log in to your Kotak Securities Demat account - Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Step 2: Specify IPO details - Enter the number of lots and the price you wish to apply for.
- Step 3: Enter UPI ID - After entering your UPI ID, click submit. This will place your bid with the exchange.
- Step 4: Mandate Notification - Your UPI app will receive a mandate notification to block funds.
- Step 5: Approve Request - Your funds will be blocked once you approve the mandate request on your UPI.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
Hero Motors Ltd IPO FAQs
What is the Hero Motors Ltd IPO?
The Hero Motors Ltd IPO is a 100% book-built issue comprising a fresh issue and an offer for sale. The total issue size is pegged at ₹900 crore. While the fresh issue size is up to ₹500 crore, the offer for sale is up to ₹400 crore.
What is the lot size of the Hero Motors Ltd IPO?
Information on the lot size is yet not available.
