Hero Motors Withdraws Rs 900 Crore IPO Plans
Hero Motors, the auto component maker, has withdrawn the Draft Red Herring Prospectus (DRHP) of its proposed Rs 900 crore initial public offering (IPO). This is on 5 October, as per the processing status on the SEBI website. The company had filed the DRHP in August 2024.
As part of its IPO, Hero MotoCorp includes a fresh issue worth up to Rs 500 crore, while the balance of Rs 400 crore is to be raised through an offer for sale (OFS) by the promoters of the company, with OP Munjal Holdings, Bhagyoday Investments, and Hero Cycles as part of that line-up. The promoter group currently holds 91.65% in the company.
Hero Motors is a manufacturer of engine and transmission components for two-wheelers. The company serves a client list worldwide, which includes some of the most recognized brands available in the market, such as BMW, Ducati, and Harley Davidson. The company has two distinct business segments: powertrain solutions that contributed 49% to its revenues in FY24, and the alloys and metallics (A&M) business accounted for 51%.
Geographical takeaways: The company sourced 59% of the revenue in FY24 from India. Europe accounted for 29%, and the US market stood at about 8%.
Hero Motors are on an uptrend financially. The gross revenue of the company received during the operations increased to Rs 1,064.4 crore in FY24 from Rs 914.2 crore in FY22. Gross profit increased to Rs 419.4 crore from Rs 281.4 crore in the same period. Gross margin has improved to 39.40% from 30.78% in the same period.
