Hero Motors IPO Raises Rs 299.99 Crore From Anchor Investors

Hero Motors Raises Rs 299.99 Crore From Anchor Investors

Hero Motors Limited, an automotive technology company serving OEMs across the US, Europe, India and the ASEAN region, raised Rs 299.99 crore from anchor investors in Mumbai on September 16, ahead of the public opening of its initial public offering. The company allotted 3,57,14,284 equity shares at Rs 84 each, representing the upper end of its price band. Of the total anchor allocation, 2,91,64,441 shares, or approximately 82 percent, were allocated to seven domestic mutual funds through 16 schemes. The transaction came as the company began its public subscription process on the same day.

Anchor Investors and Institutional Participation

Several institutional investors participated in the anchor allocation, including ICICI Prudential Life Insurance Company, 3P India Equity Fund 1M, Edelweiss Life Insurance Company, Societe Generale-ODI and ASAS Global Fund Incorporated VCC Sub Fund. Among equity-oriented schemes, allocations were made to the ICICI Prudential Smallcap Fund, Kotak Mahindra Trustee Co Ltd A/C Kotak MNC Fund, and JM Financial Mutual Fund-JM Flexi Cap Fund. ICICI Securities, DAM Capital Advisors and JM Financial are serving as the book-running lead managers for the offering, while KFin Technologies is acting as registrar. The proposed listing will take place on the NSE and BSE.

IPO Price Band, Subscription Dates and Lot Size

The company has set the issue price band at Rs 79 to Rs 84 per equity share, with each share carrying a face value of Rs 10. The public offering opened on September 16 and is scheduled to close on September 18, 2026. Investors can submit bids for a minimum of 178 equity shares and continue bidding in multiples of 178 shares. At the upper end of the price band, the company is valued at approximately Rs 3,815 crore. The offering represents the company's maiden public issue and provides investors with an opportunity to participate in its integrated automotive powertrain business.

Fresh Issue, Offer-for-Sale and Use of Proceeds

The Rs 1,000 crore offering consists of a fresh issue of up to Rs 600 crore and an offer-for-sale of up to Rs 400 crore by promoters O P Munjal Holdings and Hero Cycles. From the fresh issue proceeds, Rs 190 crore is earmarked for repayment or prepayment of outstanding borrowings. Another Rs 200 crore is intended for capital expenditure supporting capacity expansion at the company's Gautam Buddha Nagar facility in Uttar Pradesh, along with funding for inorganic growth through unidentified acquisitions and other strategic and general corporate purposes. Under the book-building structure, qualified institutional buyers can receive no more than 50 percent of the net offer, while non-institutional bidders and retail individual bidders have minimum allocations of 15 percent and 35 percent, respectively.

Evolution of the Public Offering

The current Rs 1,000 crore issue follows two earlier versions of the proposed offering. The company initially filed draft papers with Sebi in August 2024 for a Rs 900 crore issue comprising a Rs 500 crore fresh issue and a Rs 400 crore offer-for-sale, but withdrew those papers in October 2024. In July 2025, it refiled with a larger Rs 1,200 crore proposal consisting of an Rs 800 crore fresh issue and a Rs 400 crore offer-for-sale. The offering launched in September 2026 is therefore smaller than the 2025 filing because the fresh issue has been reduced to Rs 600 crore, while the offer-for-sale component remains unchanged at Rs 400 crore.

Powertrain Business, Products and Customers

India-based Hero Motors provides integrated powertrain systems covering design, prototyping, validation and development for electric and non-electric applications, according to a CRISIL report cited by the company. Its products and services support two-wheelers, performance automotive applications, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles, and electric vertical take-off and landing applications. The customer base includes BMW, Ducati Motor Holding, Enviolo International, Formula Motorsport, Hummingbird EV and HWA AG, alongside global e-bike manufacturers and aerospace mobility applications. The business therefore spans multiple mobility segments and serves customers across automotive, electric mobility and related applications.

Industry Impact & Outlook

The anchor allocation provides institutional participation ahead of the company's public subscription period, while the proposed use of fresh capital connects the offering with debt reduction, manufacturing capacity expansion and potential inorganic growth. For the broader powertrain supply chain, the development highlights the financing needs of companies serving both electric and non-electric mobility applications across multiple markets. The planned Gautam Buddha Nagar investment is particularly relevant to the company's manufacturing footprint in India, while its international customer relationships extend the potential relevance of capacity and product development decisions beyond the domestic market. The next material developments will include subscription activity, allocation outcomes and the proposed stock-market listing.

Frequently Asked Questions

What are the key details of Hero Motors' public offering?
The offering totals Rs 1,000 crore and combines a Rs 600 crore fresh issue with a Rs 400 crore offer-for-sale by promoters O P Munjal Holdings and Hero Cycles. The price band is Rs 79 to Rs 84 per share, with the public subscription period scheduled from September 16 to September 18, 2026. The minimum bid is 178 shares, followed by multiples of 178. At the upper price-band level, the company is valued at approximately Rs 3,815 crore, while fresh proceeds include allocations for debt repayment and capacity expansion.