Hero Motors Limited IPO Analysis

1. IPO Snapshot

Particular	Details
Company Name	Hero Motors Limited
IPO Type	Fresh Issue + Offer for Sale
Fresh Issue	75,949,367 shares at ₹79 / 71,428,571 shares at ₹84; gross proceeds up to ₹6,000 million
Offer for Sale	50,632,911 shares at ₹79 / 47,619,047 shares at ₹84; proceeds up to ₹4,000 million
Total Issue Size	126,582,278 shares at ₹79 / 119,047,618 shares at ₹84; ₹10,000 million
Face Value	₹10 per Equity Share
Price Band	₹79–₹84 per Equity Share
Lot Size	178 Equity Shares
Opening Date	September 16, 2026
Closing Date	September 18, 2026
Listing Exchange	BSE and NSE; BSE is Designated Stock Exchange
Registrar	KFin Technologies Limited
Lead Managers	ICICI Securities Limited; DAM Capital Advisors Limited; JM Financial Limited

2. IPO Details

Particular	At Floor Price ₹79	At Cap Price ₹84
Fresh Issue Shares	75,949,367	71,428,571
Fresh Issue Amount	₹6,000 million	₹6,000 million
Offer for Sale Shares	50,632,911	47,619,047
Offer for Sale Value	₹4,000 million	₹4,000 million
Total Issue Shares	126,582,278	119,047,618
Pre-Issue Shares	382,787,005	382,787,005
Post-Issue Shares	458,736,372	454,215,576
Post-Issue Market Capitalisation	₹36,240 million	₹38,154 million

3. Issue Reservation

Category	Reservation / Disclosure
QIB	Not more than 50% of the Offer
Non-Institutional	Not less than 15% of the Offer
Retail Individual	Not less than 35% of the Offer
Anchor Investors	Up to 60% of the QIB Portion may be allocated to Anchor Investors

4. IPO Lot Size

Application	Lots	Shares	Amount at ₹79	Amount at ₹84
Retail (Min)	1	178	₹14,062	₹14,952
Retail (Max)	13	2,314	₹1,82,806	₹1,94,376
S-HNI (Min)	14	2,492	₹1,96,868	₹2,09,328
S-HNI (Max)	66	11,748	₹9,28,092	₹9,86,832
B-HNI (Min)	67	11,926	₹9,42,154	₹10,01,784

5. About the Company

Hero Motors Limited describes itself as an automotive technology company engaged in designing, developing, manufacturing and supplying highly engineered powertrain solutions to automotive OEMs in the United States, Europe, India and the ASEAN region. It provides design, prototyping, validation, development and delivery of system-level and component-level solutions for electric and non-electric powertrains.

Its applications include two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and eVTOL applications. The Company’s named global customers include BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV, HWA and Hero MotoCorp, among others.

Operations are organised into two segments: Powertrain Solutions and Alloys & Metallics. Powertrain Solutions comprises Gears & Transmissions and Bike Powertrain. Alloys & Metallics supplies sheet-metal and tubular assemblies and component solutions primarily to automotive OEMs.

As of March 31, 2026, the Company operated six manufacturing and assembly plants across India, the United Kingdom and Thailand: Gautam Buddha Nagar, Mangli, HYM and SPUR in India; Maidenhead in the UK; and Samut Prakan in Thailand. It also operated technology centres in Southam, UK and Gautam Buddha Nagar, India, and was setting up additional facilities in Ludhiana and Bengaluru.

The RHP states that the Company served customers in 23 countries. Revenue from international customers was ₹4,915.27 million, or 41.36% of revenue from operations, in Fiscal 2026; domestic revenue was ₹6,968.24 million, or 58.64%.

Industry Context

The RHP’s industry discussion identifies electrification, e-bike adoption, premium two-wheeler demand and changing powertrain mixes as relevant market developments. The RHP cites CRISIL projections for the global e-bike market of 12.5–14.5 million units by 2031 and projects motorcycle EV penetration to rise from 2.0% in 2025 to 10.5%–12.5% by 2031. These are RHP-disclosed industry estimates rather than independent analysis in this article.

6. Restated Financial Information

Particulars (₹ million except per-share data)	FY2026	FY2025	FY2024
Revenue from operations	11,883.51	10,895.93	10,643.86
Other income	283.91	216.40	190.33
Total income	12,167.42	11,112.33	10,834.19
EBITDA	1,477.82	1,140.04	862.76
EBIT	1,018.42	760.60	577.25
PBT	610.04	390.76	243.12
PAT	411.68	327.96	170.35
Basic EPS (₹)	1.15	0.67	0.36
Diluted EPS (₹)	1.14	0.66	0.35
Net worth / Total equity	4,810.08	4,260.08	3,748.16
Equity share capital	3,583.36	3,573.84	3,535.78
Other equity / Reserves	1,163.20	677.06	322.61
Borrowings	4,007.89	4,076.22	3,039.98
Total assets	13,718.28	11,646.20	10,598.55
Finance costs	408.38	369.84	334.13
Depreciation & amortisation	459.40	379.44	285.51
Cash flow from operating activities	1,440.42	483.43	1,319.66
Cash flow from investing activities	(693.86)	(1,352.31)	(769.27)
Cash flow from financing activities	(617.98)	536.91	(203.63)
Capital expenditure	922.51	1,523.97	1,328.37
Inventory	2,085.13	1,912.57	1,798.98
Trade receivables	2,529.02	2,023.31	1,947.87
Trade payables	1,403.46	1,372.07	1,362.47

7. Key Performance Indicators

KPI	FY2026	FY2025	FY2024
Revenue from operations growth	9.06%	2.37%	0.93%
Gross Profit (₹ million)	4,954.63	4,521.62	4,193.70
Gross Margin	41.69%	41.50%	39.40%
EBITDA (₹ million)	1,477.82	1,140.04	862.76
EBITDA Margin	12.44%	10.46%	8.11%
Adjusted EBITDA (₹ million)	1,602.44	1,288.21	1,257.38
Adjusted EBITDA Margin	13.48%	11.82%	11.81%
PAT Margin	3.46%	3.01%	1.60%
Return on Equity	8.56%	7.70%	4.54%
Return on Capital Employed	19.77%	18.84%	23.23%
Net Debt / Adjusted EBITDA	2.24x	2.79x	1.72x
Fixed Asset Turnover	1.83x	1.89x	2.40x
Asset Turnover	0.87x	0.94x	1.00x
Receivable Days	78	68	67
Inventory Days	64	64	62
Trade Payable Days	43	46	47
International Revenue (₹ million)	4,915.27	4,461.02	4,394.01
Domestic Revenue (₹ million)	6,968.24	6,434.91	6,249.85
Powertrain Solutions Revenue (₹ million)	6,377.53	5,342.47	5,202.31
Alloys & Metallics Revenue (₹ million)	5,505.98	5,553.46	5,441.55
R&D Expense (₹ million)	895.91	772.68	793.13

8. IPO Valuation

Valuation Item	Disclosure
Price Band	₹79–₹84
Diluted EPS, FY2026	₹1.14
P/E at Floor Price	69.30x
P/E at Cap Price	73.68x
Industry Peer P/E – Highest	76.50x; Sona BLW Precision Forgings
Industry Peer P/E – Lowest	17.68x; CIE Automotive India
Industry Peer P/E – Average	50.20x
RoNW FY2024 / FY2025 / FY2026	4.42% / 7.74% / 8.53%
Weighted Average RoNW	7.58%
NAV per Share, March 31, 2026	₹12.72
NAV After Offer – Floor / Cap	₹23.60 / ₹23.83
Post-Offer Market Cap	₹36,240 million / ₹38,154 million

9. Peer Comparison

Company	Face Value	Closing Price (₹)	FY2026 Revenue (₹m)	FY2026 EPS Basic / Diluted (₹)	NAV/share (₹)	P/E	RoNW
Hero Motors Limited	10	Not applicable	11,883.51	1.15 / 1.14	12.72	Not applicable	8.53%
CIE Automotive India Limited	10	383.55	94,064.74	21.69 / 21.69	164.65	17.68	13.18%
Endurance Technologies Limited	10	2,763.20	145,958.80	67.66 / 67.66	442.54	40.84	15.29%
Sona BLW Precision Forgings Limited	10	788.00	44,494.60	10.30 / 10.30	93.93	76.50	10.77%
UNO Minda Limited	2	1,241.70	196,575.90	20.78 / 20.75	113.77	59.84	19.59%
Varroc Engineering Limited	1	827.05	88,904.93	14.73 / 14.73	80.45	56.15	18.70%

Financial KPI Comparison

Financial KPI	Hero Motors	UNO Minda	Endurance	Varroc	Sona BLW	CIE Automotive
Revenue from Operations FY2026 (₹m)	11,883.51	196,575.90	145,958.80	88,904.93	44,494.60	94,064.74
Revenue Growth FY2026	9.06%	17.19%	26.25%	9.03%	25.48%	1.36%
Gross Profit FY2026 (₹m)	4,954.63	70,313.10	61,781.80	31,888.64	23,526.24	46,375.41
Gross Margin FY2026	41.69%	35.77%	42.33%	35.87%	52.87%	49.30%
EBITDA FY2026 (₹m)	1,477.82	25,069.60	20,686.60	8,073.86	11,528.38	14,660.43
EBITDA Margin FY2026	12.44%	12.75%	14.17%	9.08%	25.91%	15.59%
Adjusted EBITDA FY2026 (₹m)	1,602.44	25,425.80	20,896.10	8,510.73	12,279.19	14,660.43
Adjusted EBITDA Margin FY2026	13.48%	12.93%	14.32%	9.57%	27.60%	15.59%
PAT FY2026 (₹m)	411.68	12,840.60	9,517.10	2,298.33	6,291.90	8,229.70
PAT Margin FY2026	3.46%	6.53%	6.52%	2.59%	14.14%	8.75%
ROE FY2026	8.56%	17.69%	13.91%	12.64%	10.26%	11.03%
ROCE FY2026	19.77%	28.83%	38.63%	36.53%	27.09%	24.50%
Net Debt / Adjusted EBITDA FY2026	2.24x	0.86x	0.09x	0.65x	(0.09)x	0.09x
Fixed Asset Turnover FY2026	1.83x	3.63x	2.67x	4.31x	1.32x	2.95x
Asset Turnover FY2026	0.87x	1.43x	1.26x	1.82x	0.60x	0.87x
Receivable Days FY2026	78	50	46	30	94	24
Inventory Days FY2026	64	40	29	38	50	44
Trade Payable Days FY2026	43	48	59	60	38	72

10. Shareholding & Capital Structure

Capital / Holding

Capital / Holding Item	Disclosure
Authorised Equity Share Capital	580,000,000 Equity Shares of ₹10 each
Authorised CCPS	99,500,000 CCPS of ₹10 each
Issued / Subscribed / Paid-up Before Offer	382,787,005 Equity Shares of ₹10 each
Securities Premium Before Offer	₹6,041.30 million
Promoters – Pre-Offer	284,172,126 shares; 73.46% fully diluted
Promoter Group – Pre-Offer	43,368,060 shares; 11.21% fully diluted
Total Post-Offer Shares	458,736,372 at ₹79 / 454,215,576 at ₹84

Shareholding Pattern

Shareholder	Pre-Offer Shares	Pre-Offer %	Post-Offer at ₹79: Shares / %	Post-Offer at ₹84: Shares / %
O P Munjal Holdings	273,123,055	70.60%	223,123,055 / 48.21%	226,099,246 / 49.34%
Pankaj Munjal	9,400,436	2.43%	9,400,436 / 2.03%	9,400,436 / 2.05%
Charu Munjal	942,425	0.24%	942,425 / 0.20%	942,425 / 0.21%
Abhishek Munjal	706,210	0.18%	706,210 / 0.15%	706,210 / 0.15%
Hero Cycles Limited	7,752,750	2.00%	7,119,839 / 1.54%	7,157,512 / 1.56%
Aditya Munjal	707,022	0.18%	707,022 / 0.15%	707,022 / 0.15%
Bhagyoday Investments Private Limited	23,978,804	6.20%	23,978,804 / 5.18%	23,978,804 / 5.23%
Pankaj Munjal – Munjal Sales Corporation	392,344	0.10%	392,344 / 0.08%	392,344 / 0.09%
Pankaj Munjal – Om Prakash Pankaj Munjal AOP	10,537,140	2.72%	10,537,140 / 2.28%	10,537,140 / 2.30%
South Asia Growth Invest LLC	46,855,307	12.11%	46,855,307 / 10.12%	46,855,307 / 10.22%
Amit Gupta	5,584,167	1.44%	5,584,167 / 1.21%	5,584,167 / 1.22%
Keshav Misra	1,000,000	0.26%	1,000,000 / 0.22%	1,000,000 / 0.22%
Other Public Shareholders	853,355	0.22%	127,435,633 / 27.54%	119,900,973 / 26.16%
Total	382,787,005	98.95%	458,736,372 / 99.12%	454,215,576 / 99.11%

Capital History

Date	Shares / Transaction	Amount / Price	Description
April 1, 2023	35,35,78,380 shares	₹3,535.78 million	Opening FY2024 balance
March 31, 2024	35,35,78,380 shares	₹3,535.78 million	No shares issued during FY2024
FY2025	38,06,111 shares issued	₹38.06 million	Share issuances during year
March 31, 2025	35,73,84,491 shares	₹3,573.84 million	Closing FY2025
FY2026	9,51,528 shares issued	₹9.52 million	ESOP-related issuance
March 31, 2026	35,83,36,019 shares	₹3,583.36 million	Closing FY2026
September 4, 2026	20,971,941 CCPS converted	20,971,941 shares	1:1 conversion
September 4, 2026	2,527,517 ESOP shares	₹69.14/share issue price	ESOP 2022 exercise
RHP Date	382,787,005 shares	₹3,827.87 million	Issued/subscribed/paid-up capital before Offer

11. Objects of the Issue

Object	Amount	Deployment
Repayment / prepayment / redemption of certain borrowings	₹1,900.00 million	FY2027
Capacity expansion at Gautam Buddha Nagar through equipment	₹2,000.00 million	₹660 million FY2027; ₹600 million FY2028; ₹740 million FY2029
Inorganic growth through unidentified acquisitions, strategic initiatives and general corporate purposes	[●] in RHP; cumulative cap of 35% of gross Fresh Issue proceeds	Indicative; to be finalised

12. Offer for Sale – Selling Shareholders

Selling Shareholder	Type	At Floor Price ₹79	At Cap Price ₹84	WAAC (₹/share)
O P Munjal Holdings	Promoter Selling Shareholder	₹3,950.00 million; 50,000,000 shares	₹3,950.00 million; 47,023,810 shares	₹0.03
Hero Cycles Limited	Promoter Group Selling Shareholder	₹50.00 million; 632,911 shares	₹50.00 million; 595,238 shares	₹10.07

13. Key Risks Highlighted in the RHP

Business / Operational: The Company’s manufacturing and assembly facilities could face shutdowns, disruptions or other operational problems. Such disruptions could reduce production, sales and overall business performance.

Customer Concentration: The Company depends heavily on a small number of customers. Its top 10 customers contributed 72.89% of revenue in FY2026, 78.03% in FY2025 and 76.96% in FY2024. Losing a major customer or a reduction in orders could materially affect revenue.

Supplier Dependence: The Company relies on a limited number of suppliers for certain raw materials and components. Any disruption, delay or increase in input costs could affect production, margins and cash flows.

Geographic Concentration: A significant portion of revenue comes from India, Europe and the United States, which together contributed 96.09% of revenue in FY2026, 95.33% in FY2025 and 95.75% in FY2024. Economic, regulatory or market changes in these regions could affect the business.

Industry Dependence: The Company is substantially dependent on the e-bike and two-wheeler industries. Changes in consumer demand, industry growth, regulations or market conditions could negatively affect its performance.

Technology / Product Transition: Automotive technology is changing rapidly. If the Company is unable to anticipate technological changes, develop new products or respond to changing customer requirements, it could lose business or market share.

Competition: The Company competes with established global players in powertrain solutions. Strong competition could put pressure on pricing, margins, customer relationships and market share.

Hazardous Operations: Manufacturing involves machinery, hazardous materials and other potentially dangerous activities. Accidents or safety incidents could result in injuries, operational disruptions, regulatory action and financial liabilities.

Financial / Debt: The Company has borrowings and its financing arrangements contain financial covenants. Failure to meet these requirements could restrict financial flexibility and adversely affect its operations and financial condition.

Cybersecurity / Technology: Cyberattacks, unauthorised access or other technology-related incidents could disrupt operations or compromise customer and business data. Existing security measures may not prevent every future threat.

Legal / Regulatory: The Company, its subsidiaries, promoters and directors are involved in certain legal and regulatory proceedings. Unfavourable outcomes could result in financial liabilities, penalties or reputational damage.

Capital Expenditure / Use of Offer Proceeds: The planned capacity expansion depends on purchasing equipment. The Company had not placed orders for the entire proposed capital expenditure, and equipment prices or quotations could change, potentially affecting the timing or cost of expansion.

Land / Property: A portion of the land at the Mangli facility had not been registered in the Company’s favour as of the RHP date. Any issue relating to ownership or registration could affect the use of the property.

Management / Personnel: The Company depends on experienced senior management and skilled technical employees. Difficulty in attracting or retaining qualified personnel could affect operations, product development and future growth.

14. Litigation & Contingent Liabilities

Legal Proceedings

Particulars	Details	Quantifiable Amount (₹ million)
Company – against	1 criminal, 1 tax and 17 statutory/regulatory proceedings; no material civil litigation in the summary	₹1.63 million
Directors – against	1 criminal and 1 material civil litigation	Not quantified in summary
Promoters – against	1 criminal, 1 statutory/regulatory and 2 material civil matters	Not quantified in summary
Subsidiaries – against	1 tax proceeding	₹0.01 million

** Contingent Liabilities & Commitments**

Contingent Liability / Commitment	Amount (₹ million)
Labour cases	9.89
Claims against Company not acknowledged as debt	2.33
Bank guarantee	21.08
Direct taxation – Income tax	1.63
Capital commitments	244.21

15. Registrar

Particular	Details
Name	KFin Technologies Limited
Address	301, The Centrium, 3rd Floor, 57, Lal Bahadur Shastri Road, Nav Pada, Kurla (West), Mumbai 400070, Maharashtra
Contact Person	M. Murali Krishna
Email	heromotors.ipo@kfintech.com
Investor Grievance Email	einward.ris@kfintech.com
Telephone	+91 40 6716 2222
Website	www.kfintech.com
SEBI Registration No.	INR000000221
CIN	L72400MH2017PLC444072

16. Lead Manager(s)

BRLM	Address	Phone	Email	Website	SEBI Reg. No.	Contact
ICICI Securities Limited	ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025, Maharashtra	+91 22 6807 7100	heromotors.ipo@icicisecurities.com	www.icicisecurities.com	INM000011179	Namrata Ravasia
DAM Capital Advisors Limited	Altimus 2202, Level 22, Pandurang Budhkar Marg, Worli, Mumbai 400018, Maharashtra	+91 22 4202 2500	hml.ipo@damcapital.in	www.damcapital.in	MB/INM000011336	Puneet Agnihotri / Chandresh Sharma
JM Financial Limited	7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025, Maharashtra	+91 22 6630 3030	heromotors.ipo@jmfl.com	www.jmfl.com	INM000010361	Prachee Dhuri

17. Company Contact Details

Particular	Details
Registered Office	Hero Nagar, GT Road, Ludhiana, Punjab – 141 003, India
Corporate Office	Max Square, Office Level, 7th Floor, Plot No. C3-C, Jaypee Wishtown, Sector 129, Noida, Uttar Pradesh – 201 304, India
Telephone	+91 120 4412 000
Email	investorrelations@heromotors.com
Website	www.heromotors.com
Contact Person	Sakshi Dureja
Company Secretary & Compliance Officer	Sakshi Dureja
CIN	U29299PB1998PLC039602