Hero Motors Withdraws ₹900 Crore IPO Application from SEBI

With market regulator Sebi, Hero Motors has withdrawn its draft red herring prospectus (DRHP). According to Sebi's processing status, the manufacturer of automotive components released the draft initial public offering (IPO) paper on October 5, 2024.

Hero Motors has previously submitted preliminary IPO paperwork for a ₹900 crore IPO in August 2024 to the Securities and Exchange Board of India (Sebi).

Up to ₹500 crore of new shares were offered during the first share sale, with the promoters, OP Munjal Holdings, Bhagyoday Investments, and Hero Cycles, offering the remaining ₹400 crores as an offer for sale (OFS).

Pankaj Munjal, the first cousin of Pawan Munjal, the chairman of Hero MotoCorp Ltd., is the owner of the business. It offers automobile original equipment manufacturers (OEMs) powertrain solutions for both electric and non-electric powertrains.

Also check Hero Shares - group-stocks

From ₹914 crores in the fiscal year 2021–22 (FY22) to ₹1,064 crores in FY24, the company's revenue increased. Its gross profit increased at a compound annual growth rate (CAGR) of 22% from ₹281 crores in FY22 to ₹419 crores in FY24. From ₹30.78 in FY22 to ₹39.40 in FY24, its gross margin increased.

The only component of the IPO would be the current shareholders' offer-for-sale (OFS) of 1.9 crore equity shares.
Promoters Somnath Chatterjee, Ritu Mittal, and Satish Kumar Verma will be selling 21.32 lakh equity shares apiece via OFS, while investor OrbiMed Asia II Mauritius is planning to sell 1.06 crore shares, the largest amongst them. The other selling stockholders will be Santosh Kumar Kejriwal and Munna Lal Kejriwal. The major stockholders, holding shares previous to the conversion of CCPS, are Ritu Mittal, Satish Kumar Verma, OrbiMed, and Late Kishan Kumar Kejriwal, with 22.87%, 19.38%, 19.51%, and 11.15%, respectively.

The Kolkata-based business, which has its headquarters in east India, compares itself to Agilus Diagnostics, Dr. Lal Pathlabs, Metropolis Healthcare, and Thyrocare Technologies. It offers pathology and radiology tests as well as medical consultation services. The issue's merchant bankers are SBI Capital Markets, Nuvama Wealth Management, and ICICI Securities.

To Summarize

Hero Motors has withdrawn its draft red herring prospectus (DRHP) for a ₹900 crore IPO filed with SEBI in August 2024. The IPO aimed to raise ₹500 crores in fresh equity with a ₹400 crore Offer for Sale from major stakeholders, including OP Munjal Holdings and Hero Cycles. The company, led by Pankaj Munjal, specializes in powertrain solutions for electric and non-electric vehicles, showing strong revenue growth from ₹914 crores in FY22 to ₹1,064 crores in FY24, with margins improving to 39.4%.