Hero Motors Withdrawn IPO Paper: SEBI Reports

Hero Motors, an auto components manufacturer led by Pankaj Munjal, has withdrawn its Draft Red Herring Prospectus (DRHP) submitted to the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) valued at ₹900 crore.

The proposed IPO included a fresh issue of up to ₹500 crore, while ₹400 crore was intended as an Offer For Sale (OFS) from promoters OP Munjal Holdings, Bhagyoday Investments, and Hero Cycles.

The company planned to use the net proceeds from the fresh issue to pay down outstanding borrowings, finance capital expenditures for expanding its Noida facility, support working capital needs, and cover general corporate purposes.

Previously, Hero Motors indicated it might consider a pre-IPO placement of ₹100 crore before filing the DRHP. If executed, this amount would reduce the general corporate purposes allocation of the fresh issue.

Hero Motors specialises in powertrain solutions for both electric and non-electric vehicles, serving automotive original equipment manufacturers (OEMs) across the U.S., Europe, India, and the ASEAN region.

The company reported revenue growth from ₹914 crore in FY22 to ₹1,064 crore in FY24. Its gross profit increased from ₹281 crore in FY22 to ₹419 crore in FY24, achieving a CAGR of 22%, while gross margins improved from 30.78% to 39.40% during the same period. Currently, the promoters hold a 91.65% stake in the company.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.