Hero Motors, a company that makes auto component, is also preparing to bring its IPO. The company has submitted draft paper (initial documents) to the market regulator SEBI. According to PTI news, the company will raise Rs 1200 crore through this IPO. According to the draft paper filed on Monday last, the IPO is a combination of equality of equity shares of Rs 800 crore and a combination of sales offers of Rs 400 crore by promoters.
Understand IPO, account and where capital will be used
According to the news, as a part of the Open for Sale (OFS), OP Munjal Holdings will sell shares worth Rs 390 crore; And Bhagyoday Investments and Hero Cycles will disinvest shares worth Rs 5-5 crore. For payment of loan Rs 285 crore from the latest issue, Rs 237 crore will be used to purchase equipment for the purchase of capacity in the company in Gautam Buddha Nagar, Uttar Pradesh. Also a part will be used for unknown acquisitions and other strategic initiatives and general corporate purpose for finance of inorganic development.
The company had made papers earlier also
Hero Motors Limited is planning to raise up to Rs 160 crore in the pre-IPO round. If this pre-IPO placement is completed, then the size of the new issue will be reduced to this amount. In August 2024, Hero Motors filed initial documents with SEBI to raise Rs 900 crore through an initial share-selling.
Later in October, the company withdrew its draft documents.
How is the company’s business
Hero Motors is one of India’s leading automotive technology companies, which is engaged in designing, growth, construction and supply of high engineered powertrain solutions to Automotive original equipment manufacturers (OEMs) in the United States, Europe, India and Southeast Asian Nations (ASEAN) region. It meets the needs of its global customers including BMW AG, Ducati Motor Holding SPA, NVO International Inc. and Formula Motorsport Limited and Humingbird EV. By December 31, 2024, the company was operating six manufacturing facilities spread over India, United Kingdom and Thailand.
In FY 2024, Hero Motors operated revenue of Rs 1,064.39 crore and the profit after tax stood at Rs 17.04 crore. ICICI Securities, DAM Capital Advisors and JM Financial are the book-hanging lead manager of this issue.
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