Hero Motors files draft papers for Rs 900 crore IPO

Hero Motors IPO: The flagship auto-components manufacturer of Hero Motors Company (HMC) Group, Hero Motors has filed the red herring prospectus with the Securities and Exchange Board of India for an initial public offering (IPO) to raise Rs 900 crore.

The company is backed by South Asia Growth Invest Holdings, a co-investment pooling investment vehicle funded by BII and GEF South Asia Growth Fund II to invest in Hero Motors,

According to the RHP filed on August 23, by the company, the public issue will offer fresh shares worth Rs 500 crore and an offer-for-sale (OFS) of Rs 400 crore shares by the promoters of the company.

OP Munjal Holdings, a key promoter in the company, will be offloading shares worth nearly Rs 250 crore in the OFS while other promoters Bhagyoday Investments and Hero Cycles will sell shares worth Rs 75 crore each.

The company may also consider a pre-IPO placement of Rs 100 crore before filing the Red Herring Prospectus with the Registrar of Companies (ROC). If successful, the amount raised will be deducted from the general corporate purposes portion of the fresh issue.

According to the RHP filed by the company, OP Munjal Holdings currently holds over 71 per cent stake in Hero Motors while Bhagoday Investments holds nearly 6.28 per cent stake in the company. Apart from that, Hero Cycles also owns a 2.03 per cent stake in the company. South Asia Growth Invest, a key investor in Hero Motors, owns 12.51 per cent of the total company. 

Pankaj Munjal, Managing Director of Hero Cycles, also owns a 2.51 per cent stake in the company. 

Hero Motors operates through several subsidiaries, including Hero Cycles, which is the world's largest bicycle manufacturer. Hero Motors supplies a wide range of components including drivetrains, transmission systems, and electric vehicle parts, to major automotive OEMs (Original Equipment Manufacturers) all around the world.