Hero Motors IPO

The company provides integrated solutions for both electric and non-electric powertrains, serving two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles, and eVTOL applications. It offers system-level and component-level solutions covering design, prototyping, validation, development, and delivery, with expertise in continuously variable transmissions (CVT), EV transmissions, electric motors, integrated drive units, and gear sets. It holds a first-mover position in the global e-bike powertrain market and is the only Indian manufacturer producing and exporting CVT hubs and integrated electric powertrain products for e-bikes.

Operations are divided into two segments: Powertrain Solutions, comprising Gears and Transmissions (G&T) for automotive/mobility applications and Bike Powertrain (BPT) for micro-mobility and global e-bike manufacturers; and Alloys and Metallics (A&M), providing sheet metal and tubular assemblies to automotive OEMs. The company has established relationships with global customers including BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV, and HWA, alongside leading global e-bike manufacturers. As of March 31, 2026, it had 1,388 permanent employees and 707 contract labourers.

Cited competitive strengths include strong R&D and engineering capabilities, long-term relationships with global OEMs, a strong presence in the global e-mobility industry, diversified powertrain product and service offerings, experienced management with strong corporate governance, and growing presence in electric bikes and premium two-wheelers.

The ₹1,000.00 Cr book-built IPO combines a fresh issue of ₹600.00 Cr (7.14 crore shares) with an offer for sale of ₹400.00 Cr (4.76 crore shares) from promoter entities O.P. Munjal Holdings and Hero Cycles Ltd. The price band is ₹79–₹84 per share, with a lot size of 178 shares. Net proceeds from the fresh issue are earmarked for repayment/prepayment/redemption of borrowings (₹190.00 Cr) and capital expenditure for capacity expansion at its Gautam Buddha Nagar, Uttar Pradesh facility (₹200.00 Cr), with the balance toward inorganic growth/acquisitions and general corporate purposes combined.

At the upper price band, the IPO is priced at a post-issue P/E of 92.31x (pre-issue: 77.78x) — a notably rich multiple reflecting thin absolute profitability relative to market cap — and a Price-to-Book multiple of 6.60x based on FY26 NAV of ₹12.72. RoNW stood at just 8.53% for FY26. Revenue grew 9% and PAT grew 26% year-on-year between FY25 and FY26, though profitability remains modest in absolute terms (PAT margin of 3.46%) despite the company's scale and diversified global OEM relationships. Promoter shareholding will fall from 84.67% pre-issue to 61.63% post-issue due to the OFS component.