Hero Motors Revises IPO To ₹1,000 Crore With ₹400 Crore OFS
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Hero Motors has reduced its proposed IPO size to ₹1,000 crore from ₹1,200 crore, cutting the fresh issue to ₹600 crore while retaining the ₹400 crore offer-for-sale component.
Powertrain solutions provider Hero Motors has revised the size and structure of its proposed initial public offering (IPO) after receiving approval from the Securities and Exchange Board of India (SEBI). The company will now raise ₹1,000 crore through the public issue, comprising a fresh issue of ₹600 crore and an offer for sale (OFS) of ₹400 crore.
Hero Motors had originally filed its Draft Red Herring Prospectus (DRHP) with SEBI in June 2025, proposing an IPO of up to ₹1,200 crore. The earlier structure consisted of a ₹800 crore fresh issue and a ₹400 crore OFS.
Why Has Hero Motors Reduced Its IPO Size?
Hero Motors approached SEBI on 30 July to seek approval for reducing the fresh issue and the overall size of the IPO. The move follows the rules implemented from 13 April that allow companies to revise the fresh issue size by up to 50% without filing a fresh DRHP.
SEBI approved the change through its letter dated 27 August. Following the approval, Hero Motors reduced the fresh issue from ₹800 crore to ₹600 crore, while keeping the OFS component at ₹400 crore.
How Has The OFS Structure Changed?
The company has also revised the shareholding structure of the OFS following letters submitted on 27 August by the promoter shareholders Bhagyoday Investments and O P Munjal Holdings.
Bhagyoday Investments has withdrawn its offer of shares worth up to ₹5 crore. O P Munjal Holdings has increased its portion by the same amount, taking its proposed OFS from ₹390 crore to ₹395 crore.
As a result, the revised OFS will comprise shares worth ₹395 crore from O P Munjal Holdings and ₹5 crore from Hero Cycles. The total OFS remains ₹400 crore.
How Will Hero Motors Use The Fresh Issue Proceeds?
Hero Motors has also changed the proposed use of funds from the fresh issue. Of the net proceeds, ₹190 crore will be used towards debt repayment.
Another ₹200 crore will go towards purchasing equipment required for capacity expansion at the company's facility in Gautam Buddha Nagar, Uttar Pradesh. The remaining proceeds will be used for inorganic growth through unidentified acquisitions and general corporate purposes. The proceeds from the OFS will accrue to the selling shareholders rather than to Hero Motors.
Hero Motors provides powertrain systems for electric and non-electric vehicles. The company caters to automotive original equipment manufacturers (OEMs) across the United States, Europe, India and the Association of Southeast Asian Nations (ASEAN) region.
Its global customer base includes BMW AG, Ducati Motor Holding, Enviolo International, Formula Motorsport, Hummingbird EV and HWA AG. The company also supplies powertrain solutions to electric bicycle manufacturers and customers operating in other mobility segments, including aerospace.
ICICI Securities, DAM Capital Advisors and JM Financial are acting as merchant bankers for the Hero Motors IPO.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
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