Hero Motors is back on the IPO track, but this time with a bigger ask. The auto parts player has refiled its draft papers with a revised plan to raise ₹1,200 crore — a clear signal that it’s shifting gears and eyeing serious expansion.
This marks the company’s second attempt after pulling back an earlier draft citing market conditions. Now, with an upbeat tone and stronger appetite, Hero Motors wants to wipe some debt and pour funds into scaling operations in Uttar Pradesh.
Bigger Ticket, Sharper Pitch
The filing, made with the Securities and Exchange Board of India (SEBI) on Monday, bumps up the original ₹900 crore issue size to ₹1,200 crore. That’s a 33% leap.
Out of the total, ₹800 crore will come from a fresh issue of shares. The remaining ₹400 crore is via an Offer For Sale (OFS) by existing shareholders — mostly from O P Munjal Holdings, which is offloading shares worth ₹390 crore.
Bhagyoday Investments and Hero Cycles will each contribute ₹5 crore to the OFS. The face value of each share remains ₹10.
That part hasn’t changed.
The Money Talk: Where It’s Going
Hero Motors says the primary capital raised will go toward two main goals — reducing outstanding debt and scaling up its manufacturing unit in Ghaziabad, Uttar Pradesh.
That makes sense for a company already supplying high-end components to big international names like BMW, Ducati, and Harley-Davidson.
And this isn’t a vanity project either. According to company insiders, the funds would primarily:
-
Cut down long-term liabilities to strengthen the balance sheet
-
Enhance capacity at the UP facility, particularly in e-drive systems and precision engineering
-
Boost R&D for next-gen electric mobility solutions
One senior executive, who declined to be named, said: “This isn’t just about reducing debt, it’s also about future-proofing. EV and premium two-wheeler segments are moving fast. You either catch up or get left behind.”
A Deeper Look: Who’s Selling and What’s on the Table
The Offer For Sale part of the IPO is a chance for some early investors to partially cash out.
Here’s a simple breakdown of the OFS as per DRHP:
Seller | Amount (₹ crore) |
---|---|
O P Munjal Holdings | 390 |
Bhagyoday Investments | 5 |
Hero Cycles | 5 |
Total | 400 |
Notably, O P Munjal Holdings — the promoter entity — is still holding on to a controlling stake. So, while they’re selling a chunk, this isn’t an exit.
One investment banker familiar with the deal told us, “They’re playing it safe. It’s not a fire sale. It’s a recalibration.”
Timing the Market or Catching the Tailwind?
Now here’s where it gets a little interesting. Hero Motors pulled back its earlier filing citing “unfavorable market conditions.”
That was back in late 2024, when volatility spiked, and mid-cap listings were taking a hit post-listing.
Fast-forward to July 2025 — Indian equity markets are booming again, fresh off election stability, and investor appetite is back. The recent listing of BharatForge Tech, which shot up 41% on debut, may have emboldened Hero Motors to re-enter with an upsized issue.
This time, they’re riding a much friendlier wave.
Business Snapshot: Global Ambitions on Indian Soil
Hero Motors isn’t just a desi parts maker. The company supplies transmission components, EV drive systems, and high-precision gears to auto giants across the U.S., Europe, and Japan.
In fact, almost 50% of its revenue comes from exports.
The Ghaziabad plant, which stands to benefit from the IPO proceeds, is currently being positioned as a global manufacturing hub for high-end electric and luxury motorcycle parts. The company is also reportedly eyeing Tier-II EV makers in Europe for potential tech partnerships.
One executive put it simply: “We want to be to auto components what TCS is to software. High volume, high value, zero compromise.”
IPO Buzz and Street Whispers
Retail investors are already murmuring about the IPO, and broker chatter suggests strong institutional interest. That’s partly due to Hero Motors’ robust client base and partly because of the electric mobility halo it now wears.
Just in the past 12 months, Hero Motors:
-
Bagged a new supply contract with an undisclosed German EV brand
-
Tied up with a Japanese gearbox maker for collaborative R&D
-
Cut consolidated debt by nearly ₹200 crore
There’s cautious optimism on the street.
But some analysts are still waiting for clarity on valuations and post-IPO promoter holding before making any bullish calls. One Mumbai-based fund manager quipped, “Great company. Let’s just hope it’s not priced like it’s already the next Bosch.”
The Bigger Picture: Sector Warming Up Again
Hero Motors isn’t the only one testing the IPO waters in July. The broader auto ancillary space is heating up with names like Sona Comstar and Endurance Technologies showing strong Q1 performance and triggering investor interest.
Experts say this is the beginning of another auto parts IPO cycle — and companies with EV tailwinds are most likely to get oversubscribed.
With Make-in-India incentives still alive and EV penetration slowly climbing, Hero Motors’ bet on scale and tech might just be timed right.