Hero Motors Ltd. IPO: price band, issue size, dates, business profile, financials and key risks

Hero Motors Limited, an Indian automotive technology company supplying powertrain solutions and metallic components to original equipment manufacturers (OEMs), is set to open its mainboard initial public offering (IPO) on 16 September 2026, closing on 18 September 2026. The IPO is priced in a ₹79 to ₹84 band with a lot size of 178 shares. The total offer is ₹1,000 crore, comprising a ₹600 crore fresh issue and a ₹400 crore offer for sale (OFS). The shares are scheduled to list on 23 September 2026.

What Hero Motors does: powertrain systems, precision components and engineering services

Hero Motors Limited designs, develops and manufactures powertrain solutions and alloys/metallic components for OEMs across India, Europe, the US and ASEAN. Its portfolio spans both electric-vehicle (EV) and non-EV applications, with product lines that include transmission systems, precision gear components, and micro-mobility components.

Within micro-mobility, the company supplies products such as continuously variable transmission (CVT) hubs and e-bike drive solutions. Alongside component manufacturing, the company provides design, prototyping, testing and validation services. These engineering capabilities are supported by technology centres in India and the UK, while its manufacturing footprint includes facilities in India, the UK and Thailand.

The red herring prospectus (RHP) positioning describes Hero Motors as a diversified powertrain systems provider across multiple vehicle categories and geographies, including integrated systems capabilities in micro-mobility and electric drive applications.

Footprint and positioning across geographies and vehicle categories

Hero Motors’ operating model combines manufacturing and engineering across geographies. The company supplies OEMs in multiple regions, which places emphasis on execution across different demand cycles and compliance environments.

The RHP narrative highlights a strategy of scaling integrated systems capabilities, including e-bike powertrains and electric drive units, and leveraging overseas engineering and validation resources (including UK-linked capabilities) alongside its manufacturing presence in India and Thailand. The company has also described its intention to expand manufacturing capacity and overseas presence to address electrification-led demand in global mobility.

From a business-monitoring standpoint, this multi-region exposure means investors often track how sales mix and operational performance evolve across end-markets such as two-wheelers, e-bikes and broader micro-mobility applications.

Key milestones, schemes and partnerships referenced in the RHP

Hero Motors Limited was incorporated in 1998, initially as Hero Briggs & Stratton Auto Private Limited, and received investment via a joint venture involving Briggs & Stratton International Inc. (USA) and Majestic Auto Limited. The company commenced alloys and metallics operations in 2001, focused on sheet metal components and machining.

A series of corporate actions and transfers shaped the business perimeter over time. In 2004, a court-approved scheme transferred Majestic Auto Limited’s Ghaziabad business undertaking to the company. In 2015, a High Court-sanctioned scheme transferred certain businesses (sheet metals, transmission and cycle production/assemblies) from the company to Hero Cycles Limited. Later, in 2022, the National Company Law Tribunal (NCLT) approved a scheme transferring Hero Cycles Limited’s auto component business to Hero Motors.

On partnerships and capability-building, the company partnered with US-based envirolo in 2018 and began supplying CVP/CVT hubs, marking entry into bike powertrain within its powertrain solutions segment. In 2020, it entered into an agreement with envirolo to co-develop an economical CVT hub variant branded “Urban” for India, ASEAN and Europe.

In 2021, Hero Motors signed a joint venture agreement with Yamaha to set up HYM for manufacturing hub motors for e-bikes. In 2022, it acquired a 32% stake in Hewland Engineering Limited (HEL), and in 2023 it acquired an additional 19%, making HEL a subsidiary with a 51% holding. Operationally, the company commenced operations at its Samut Prakan, Thailand facility in 2023 and ventured into the electric drive unit segment for micro-mobility under the “ESYNC” brand.

In 2025, the company entered into a joint venture agreement with the STP Group to manufacture forging components and incorporated subsidiary Munjal STP Industries Private Limited.

IPO structure, reservations and grey market premium observations

The Hero Motors IPO consists of a fresh issue and an offer for sale (OFS). Proceeds from the fresh issue accrue to the company, while proceeds from the OFS accrue to the selling shareholders.

The IPO is a mainboard issue with a ₹79–₹84 price band and 178 shares per lot. The schedule in the offer timeline sets out allotment on 21 September 2026, refunds on 22 September 2026, and listing on 23 September 2026.

In terms of category allocation, the RHP snapshot specifies reservations of 50% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for Retail Individual Investors (RIIs).

Subscription figures in the snapshot reflect that the IPO is upcoming and has not yet opened; category-wise bidding data typically updates once the offer opens on 16 September 2026.

The snapshot includes up to nine grey market premium (GMP) observations referenced to the ₹84 price point, ranging from ₹0 (10 September 2026) through prints such as ₹8, ₹13, ₹10, and ₹24 by 12 September 2026. GMP is an unofficial indicator and can change ahead of listing.

Financial performance trend and disclosed KPIs

Across the reported financial years in the RHP snapshot, Hero Motors reported rising revenue and profitability, alongside growth in total assets. Revenue increased from ₹1,064.39 crore in FY2024 to ₹1,188.35 crore in FY2026, while profit after tax (PAT) increased from ₹17.04 crore to ₹41.17 crore over the same period. PAT margin moved from 1.60% in FY2024 to 3.46% in FY2026, and total assets rose from ₹1,059.86 crore to ₹1,371.83 crore.

The IPO snapshot also discloses key performance indicators (KPIs) and valuation metrics including EPS of ₹1.08, return on equity (ROE) of 8.56%, return on net worth (RoNW) of 8.53%, and return on capital employed (ROCE) of 19.77%. Operating profitability is presented as an EBITDA margin of 12.44%. The snapshot reports a debt-to-equity ratio of 0.83, providing a reference point for monitoring leverage as the company executes its proposed use of proceeds.

On valuation metrics in the snapshot, the issue is presented with a pre-IPO P/E of 77.78 times and a price-to-book of 6.60 times.

Proposed use of fresh issue proceeds, key risks and monitoring points

The company proposes to utilise the net proceeds from the fresh issue for three stated objectives: (1) repayment, prepayment or redemption (in full or in part) of certain outstanding borrowings; (2) capital expenditure through purchase of equipment for capacity expansion at its Gautam Buddha Nagar, Uttar Pradesh facility; and (3) funding inorganic growth through unidentified acquisitions and other strategic initiatives, along with general corporate purposes. The snapshot indicates specific proposed allocations for the borrowing reduction and the Gautam Buddha Nagar capex components, while the inorganic growth and general corporate purposes component is described without a specified allocation in the provided snapshot.

The RHP snapshot highlights business sensitivities and risk factors including: Europe being a large revenue source, which can make sales and cash flows sensitive to regional slowdowns or rule changes; demand linkage to two-wheelers and e-bikes, which can affect utilisation and profitability if volumes soften; and the significance of raw materials in the cost structure, with certain supplies potentially lacking firm contracts, creating exposure to delays or higher prices.

Monitoring points based on the disclosed objectives and business profile include:

• Whether the Gautam Buddha Nagar capacity expansion is followed by stable utilisation as additional equipment is commissioned.
• Whether working-capital movement (including receivables and inventory levels) remains controlled as shipments scale across India and export markets.
• How the product mix evolves across transmission systems, precision gears, CVT hubs, e-bike drive solutions and electric drive units for micro-mobility.
• The pace and outcomes of any inorganic growth initiatives pursued under the proposed objects, and how they reflect in reported margins, returns and leverage.

Complete numeric snapshot

IPO terms and schedule

Key performance indicators and valuation

Category reservations and anchor allocation

Proposed use of fresh issue proceeds

Subscription status (12 Sep 2026)

The issue has not opened for subscription yet. Category-wise bidding data will update once the issue opens on 16 Sep 2026.

Grey market premium (GMP) trend

GMP is an unofficial market indicator and can change; these are dated snapshot observations, not a listing forecast.