Hero Motors Raises Rs 299.99 Crore From Anchors, Rs 1,000-Crore IPO Opens September 16

Hero Motors, a leading Indian automotive technology company, is launching its IPO today to raise up to ₹1,000 crore. The issue, priced between Rs 79 and Rs 84 per Equity Share of face value Rs 10, will be open for subscription until Friday, September 18, 2026. Investors can bid in multiples of 178 shares, with a minimum bid of 178 shares.

The IPO consists of a fresh issue of up to Rs 600 crore and an offer-for-sale of up to Rs 400 crore by the company's promoters - O P Munjal Holdings and Hero Cycles Limited. SEBI regulations stipulate that not more than 50% of the net offer will be allocated to QIBs, at least 15% to non-institutional investors, and not less than 35% to retail investors.

The funds raised will be used for debt repayment, capital expenditure, funding growth initiatives, and other corporate purposes. ICICI Prudential Life Insurance, 3P India Equity Fund, Edelweiss Life Insurance, Societe Generale – ODI, and ASAS Global Fund have pledged support by purchasing shares.

Hero Motors specializes in designing, developing, manufacturing, and supplying powertrain solutions for automotive OEMs across the US, Europe, India, and ASEAN regions. Its offerings span two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles, and electric vertical take-off and landing (eVTOL) aircraft.

The company's integration of design, engineering, prototyping, validation, and manufacturing capabilities positions it well in both the electric and non-electric mobility segments. With a focus on innovation and global reach, Hero Motors aims to cater to the needs of major players such as BMW, Ducati, Enviolo, Formula Motorsport, and leading electric bicycle manufacturers.

However, the IPO faces a challenge in terms of valuation, with a P/E ratio of 92.6x and an EV/EBITDA of 34.38x, which appears high compared to peers considering the company's modest revenue growth and high concentration among top five customers. Despite this, the company's strong technology-led capabilities, growing e-mobility portfolio, and global presence present promising long-term growth opportunities.

SBI Securities rates the IPO a "Subscribe Long Term," while the author believes the valuation is expensive at the upper price band. The author recommends tracking the company's execution post-listing.