Hero Motors Ltd. has submitted preliminary documents to the Securities and Exchange Board of India (SEBI) on Saturday to raise Rs 900 crore through an initial public offering (IPO). It is a subsidiary of the Hero Motors Company (HMC) Group, specialising in auto components.
According to the draft red herring prospectus (DRHP), existing promoters will share a fresh issuance of equity shares worth Rs 500 crore and an Offer-For-Sale (OFS) of shares totalling Rs 400 crore.
The Offer-For-Sale (OFS) includes shares of Rs 250 crore from O P Munjal Holdings, and shares worth Rs 75 crore each from Bhagyoday Investments and Hero Cycles.
The company may explore a pre-IPO placement of Rs 100 crore. Should this occur, the size of the fresh issue will be reduced accordingly.
Funds raised from the fresh issue will be allocated as follows: Rs 202 crore will be used for debt repayment, and Rs 124 crore will be invested in acquiring equipment to expand the company’s facility in Gautam Buddha Nagar, Uttar Pradesh.
Hero Motors is a leading automotive technology company in India, focusing on designing, developing, manufacturing, and supplying highly engineered powertrain solutions to automotive OEMs in the United States, Europe, India, and the ASEAN region.