Hero Motors Secures SEBI Nod for ₹1,200 Crore IPO
Hero Motors, a leading manufacturer of engine and transmission components for two-wheelers, has received SEBI approval for its ₹1,200 crore IPO. The offering includes a fresh issue of ₹800 crore and an OFS of ₹400 crore. Funds will be used for debt repayment, capital expenditure, acquisitions, and general corporate purposes. The IPO allocation is set at 50% for QIBs, 15% for NIIs, and 35% for retail investors. Hero Motors operates six manufacturing facilities across India, UK, and Thailand, serving clients like BMW, Ducati, and Harley-Davidson. The company is considering a pre-IPO placement of up to ₹160 crore.
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Hero Motors, a leading manufacturer of engine and transmission components for two-wheelers, has received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). The company aims to raise ₹1,200 crore through this maiden public issue, marking a significant milestone in its corporate journey.
IPO Structure and Allocation
The IPO comprises a fresh issue of shares worth ₹800 crore and an offer for sale (OFS) of ₹400 crore. The allocation structure for the IPO is as follows:
| Investor Category | Allocation Percentage |
|---|---|
| Qualified Institutional Buyers | 50% |
| Non-Institutional Investors | 15% |
| Retail Investors | 35% |
Each share in the IPO will have a face value of ₹10.
Utilization of Funds
The proceeds from the fresh issue will be strategically utilized as follows:
- ₹285.00 crore for debt repayment
- ₹237.00 crore for capital expenditure at the Gautam Buddha Nagar facility
- Funding acquisitions
- General corporate purposes
Offer for Sale Details
The OFS component of the IPO includes shares from:
- OP Munjal Holdings: ₹390.00 crore
- Bhagyoday Investments: ₹5.00 crore
- Hero Cycles: ₹5.00 crore
Pre-IPO Placement
Hero Motors is considering a pre-IPO placement of up to ₹160.00 crore, which could potentially reduce the size of the fresh issue.
Company Overview
Led by Pankaj Munjal, Hero Motors has established a strong presence in the automotive components industry. The company operates six manufacturing facilities spread across India, the UK, and Thailand. It specializes in producing engine and transmission components for two-wheelers, catering to prestigious clients such as BMW, Ducati, and Harley-Davidson.
Ownership Structure
Currently, the promoters hold a 91.65% stake in Hero Motors, indicating a high level of promoter confidence in the company's prospects.
This IPO marks a significant step for Hero Motors as it seeks to capitalize on its strong market position and expand its operations. Investors will be closely watching this offering, given the company's established presence in the automotive components sector and its impressive client roster.
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