The company informed the bourses that it allocated 3.57 crore equity shares at ₹84 per share to anchor investors.
Some of the marquee institutions that participated in the anchor book include ICICI Prudential Life Insurance Company Ltd., 3P India Equity Fund 1M, Edelweiss Life Insurance Company Ltd., Societe Generale – ODI, and ASAS Global Fund Incorporated VCC Sub Fund, among others.
Among equity-oriented schemes, the company has allocated shares to ICICI Prudential Smallcap Fund, Kotak Mahindra Trustee Co Ltd A/C Kotak MNC Fund and JM Financial Mutual Fund – JM Flexi Cap Fund, among others.
Hero Motors IPO: Should you subscribe or avoid?
SBI Securities
SBI Securities has assigned a ‘Neutral’ rating to the issue and said it would like to track the company’s execution for a few quarters post-listing.
At the upper price band, Hero Motors is valued at a post-issue FY26 P/E multiple of 83.8x, which the brokerage considers expensive compared with peers, given its modest revenue growth and high customer concentration.
While the company’s technology-led capabilities and expansion into e-mobility and forged components remain promising, SBI Securities said the current valuation largely factors in future growth.
The brokerage said Hero Motors is an automotive technology company with integrated capabilities across electric and non-electric powertrain solutions. The company delivered Revenue/EBITDA/PAT CAGRs of 5.7%/34.3%/55.5%, respectively, during FY24-FY26, reflecting strong profitability growth despite modest revenue expansion.
Its growing e-mobility portfolio, global presence and R&D capabilities provide long-term growth opportunities. Further, its 51:49 joint venture with Germany-based STP Group will manufacture high-precision forged powertrain components in India for domestic and global customers, expanding its Alloy & Metallics portfolio.
However, the top five customers contributed 61.4% of FY26 revenue, exposing the business to changes in key customers’ demand and sourcing strategies.
Anand Rathi
Anand Rathi believes the IPO is fully priced but recommends a ‘Subscribe – Long Term’ rating on the issue.
The brokerage said Hero Motors has established a differentiated position in the automotive technology industry through its focus on engineered powertrain solutions across electric and non-electric mobility applications.
The company benefits from design, engineering, prototyping, validation and manufacturing capabilities, enabling it to provide system-level and component-level solutions to automotive OEMs.
Its portfolio includes CVTs, EV transmissions, electric motors, drive units and gear sets, providing exposure to ICE, performance automotive and electric mobility segments.
The company also has a position in the e-bike powertrain market, being the only player manufacturing and exporting CVT hubs to e-bike OEMs from India. Its investment in Hewland has strengthened its transmission design and prototyping capabilities, while its joint venture with Yamaha Motor Co. Ltd. supports its electric motor capabilities.
With facilities across India, the UK and Thailand, Hero Motors has a global footprint.
Hero Motors IPO: Price band
Hero Motors has fixed the price band for its ₹1,000 crore IPO at ₹79-84 per share. Each share has a face value of ₹10.
One lot will comprise 178 shares of Hero Motors. Retail investors will have to make a minimum investment of ₹14,952 and can bid in multiples of 178 shares thereafter.
At the upper end of the price band, Hero Motors will have a market capitalisation of ₹3,815 crore. Following the OFS, the promoter holding in the company will fall to 61.63% from 85.57% earlier.
The ₹1,000 crore IPO comprises a fresh issue of equity worth ₹600 crore and an Offer For Sale (OFS) worth ₹400 crore.
Of the issue, 35% is reserved for retail investors, 50% for qualified institutional buyers, while the remaining portion is reserved for non-institutional investors (NIIs).
Hero Motors IPO: GMP today
Hero Motors is currently commanding a 23% premium in the grey market, indicating that investors are expecting a potentially strong listing gain if the current GMP trend holds.
However, grey market premiums are only an indicator of how the company’s shares are being valued in the unlisted market and can change rapidly. GMP is not an official measure and should not be treated as a guarantee of listing gains.
Hero Motors IPO: Use of proceeds
Hero Motors, which manufactures engineered powertrain solutions for automotive original equipment manufacturers (OEMs) in the US, Europe, India and the Association of Southeast Asian Nations (ASEAN) region, will utilise ₹190 crore from the fresh issue towards repayment of debt.
A further ₹200 crore will be spent on the purchase of equipment required for capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh.
The remaining proceeds will be used to fund inorganic growth through unidentified acquisitions and for general corporate purposes.
Hero Motors: Company profile
Incorporated in April 1998, Hero Motors Ltd. is an automotive technology company engaged in designing, developing and manufacturing powertrain solutions for OEMs across the US, Europe, India and ASEAN.
Its products cater to electric and non-electric applications across two-wheelers, e-bikes, passenger and commercial vehicles, off-road vehicles and eVTOLs.
The company specialises in CVTs, EV transmissions, electric motors, integrated drive units and gear sets, and has a strong position in the global e-bike powertrain market.
It is the only Indian manufacturer producing and exporting CVT hubs and integrated electric powertrain products for e-bikes.
BMW AG, Ducati Motor Holding SPA, Enviolo International Inc., Formula Motorsport, HUMMINGBIRDEV Inc. and HWA AG are among its customers.
Hero Motors reported a 9% increase in total income to ₹1,216.74 crore in FY26 from ₹1,111.23 crore in FY25.
The company’s profit after tax (PAT) grew 26% to ₹41.17 crore in FY26 from ₹32.80 crore in FY25, reflecting an improvement in profitability during the year.
Hero Motors IPO: Allotment and listing
ICICI Securities Ltd., DAM Capital Advisors Ltd. and JM Financial Ltd. are the book-running lead managers to the issue, while KFin Technologies Ltd. is the registrar.
Allotment of shares to eligible investors will take place on September 21, while the shares are expected to be credited to investors’ demat accounts on September 22.
The equity shares are proposed to be listed on the NSE and BSE.
