Hero Motors, an auto-components producer under the Hero Motors manufacturer (HMC) Group, has said it wants to go public with a sizable Initial Public Offering (IPO). Supported by South Asia Development Invest, on August 23, 2024 the company sent in a Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI).
Comprising a 500 crore fresh equity offering coupled with an offer-for-sale (OFS) of 400 crore, the IPO aims to raise 900 crore. Promotes of the company will handle OFS:
- OP Munjal Holdings will sell shares worth ₹250 crore.
- Bhagyoday Investments and Hero Cycles will each offload shares worth ₹75 crore.
Hero Motors is also considering a pre-IPO placement of ₹100 crore, which, if it occurs, will adjust the allocation of funds from the fresh issue for general corporate purposes.
Ownership Structure
- OP Munjal Holdings: 71.55% stake
- Bhagyoday Investments: 6.28% stake
- Hero Cycles: 2.03% stake
- South Asia Growth Invest LLC: 12.27% stake
Company Overview
Hero Motors focusses on powertrays; it provides OEMs all across the United States, Europe, India, and the ASEAN area both electric and non-electric powertrays. Among its customers are respected companies as BMW AG, Ducati Motor Holding SPA, Enviolo International Inc., and big e-bike manufacturers. The business is special as it is the sole manufacturer of whole electric powertrain components for e-bikes in India and the only Indian company producing constantly variable gearbox (CVT) hubs for worldwide e-bike OEMs.
Hero Motors operates in two segments
- Powertrain Solutions
- Alloys and Metallics
It has manufacturing facilities in India, the United Kingdom, and Thailand.
Financial Highlights
From the ₹40.5 crore net profit of previous year, Hero Motors earned a net profit of ₹17 crore for the fiscal year ending March 2024, a 58% decline. The reasons of this decline were decreased operational performance, slower revenue development, and increased personnel expenditures. Rising slightly at 0.9% from ₹1,054.6 crore the year before, the company’s income for that year came out to be ₹1,064.4 crore. EBITDA slumped by 23.7% to ₹63.8 crore; margins fell to 6% even with lower input costs.
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