Hero Motors Withdraws INR 900 Crore IPO Plans Hero Motors intended to raise INR 500 crore through a fresh equity issuance, while the remaining INR 400 crore was planned to be raised via an offer for sale (OFS) by the company's promoters.
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Hero Motors, a key player in the auto-components industry and part of the Hero Motors Company (HMC) Group, has withdrawn its INR 900 crore IPO (initial public offering) plans. This move was revealed in an update to the Securities and Exchange Board of India (Sebi) on Monday. The company had originally filed its DRHP (draft red herring prospectus) in August, seeking approval to go public.
According to the draft papers, Hero Motors intended to raise INR 500 crore through a fresh equity issuance, while the remaining INR 400 crore was planned to be raised via an offer for sale (OFS) by the company's promoters. The OFS segment was divided among key stakeholders, including O P Munjal Holdings, which planned to offload shares worth INR 250 crore, and Bhagyoday Investments and Hero Cycles, each looking to sell shares valued at INR 75 crore.
The fresh issue's proceeds were earmarked for critical company operations, including debt repayment and investment in expanding the company's manufacturing capacity. Specifically, the funds would have been used to purchase new equipment for its facility in Gautam Buddha Nagar, Uttar Pradesh. This expansion was seen as a strategic move to enhance production capabilities and strengthen Hero Motors' position in the competitive auto-components sector.
Despite the promising outline for future growth, the company's decision to withdraw the IPO remains unexplained. No further details regarding the reasons behind this abrupt decision were provided.
The withdrawal comes after months of preparation, with ICICI Securities Ltd., DAM Capital Advisors Ltd. and JM Financial Ltd. serving as the lead bookrunners for the proposed IPO, and KFin Technologies Ltd. acting as the registrar.
Hero Motors boasts a diverse product portfolio, encompassing electric and non-electric powertrains for various vehicle segments, including two-wheelers, e-bikes, off-road vehicles, electric and hybrid cars, and heavy-duty vehicles. As the company puts its initial public offering (IPO) plans on hold, industry analysts are eagerly awaiting updates on its future funding strategies and potential alternative capital-raising plans. This shift may have significant implications for Hero Motors' long-term growth ambitions and market competitiveness.
