Indian auto parts maker Hero Motors is gearing up for a big move. The company has filed for an initial public offering (IPO) worth up to ₹1,200 crore ($140 million). The news came out on Tuesday through its draft prospectus.
The IPO will include fresh shares worth ₹800 crore. Alongside this, some existing shareholders will sell shares worth ₹400 crore. That means Hero Motors will get a direct inflow of funds while also offering an exit to early investors.
Hero Motors is not just any local brand. It counts BMW and Ducati as clients. The company is led by Pankaj Munjal, a member of the famous Munjal family, which also runs Hero MotoCorp, India’s largest two-wheeler company.
Why the IPO Now?
Hero Motors plans to use the IPO money for two main reasons:
- To reduce debt
- To buy new equipment and grow its factory in Uttar Pradesh
This move shows that the company is serious about long-term growth and expansion. They want to build more, better, and faster.
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The Money Story
However, the financial picture is not all rosy. In FY2024, Hero Motors saw its net profit fall by 67% compared to last year. While revenue went up by just 1%, rising costs ate into their profits.
This shows the company is at a crossroads. The IPO could give it the boost it needs to move forward.
Who’s Handling the IPO?
The lead managers for the IPO are:
- ICICI Securities
- JM Financial
- DAM Capital
These are big names in India’s financial world. Their involvement gives the IPO a strong foundation.
The Bigger Picture
Hero Motors’ IPO is part of a larger trend. Many Indian companies are choosing the IPO route to fuel their next phase of growth. And with international clients like BMW and Ducati, Hero Motors is positioning itself as a global player in the auto parts industry.
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