Hero Motors IPO is a ₹1,000.00 crore book-built issue comprising a fresh issue of 7.14 crore shares worth ₹600.00 crores and an offer for sale of 4.76 crore shares aggregating to ₹400.00 crores. The IPO will be open for subscription from September 16, 2026, to September 18, 2026. The share allotment is expected to be finalized on September 21, 2026, with the equity shares scheduled to be listed on NSE and BSE on September 23, 2026.
The IPO has a price band of ₹79 to ₹84 per share, with a lot size of 178 shares. At the upper price band, retail investors need a minimum investment of ₹14,952 for one lot. ICICI Securities Ltd. is the book-running lead manager for the issue, while Kfin Technologies Ltd. is the registrar. Investors can refer to the Hero Motors IPO Red Herring Prospectus (RHP) for detailed information about the company and the offer.
Company Overview
Incorporated in April 1998, Hero Motors Limited is an automotive technology company that designs, develops, manufactures and supplies engineered powertrain solutions to automotive original equipment manufacturers (OEMs) across the United States, Europe, India and the ASEAN region.
Its product portfolio covers electric and non-electric powertrain solutions for two-wheelers, performance vehicles, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and eVTOL applications. The company provides both system- and component-level solutions, including design, prototyping, validation, development and production.
Hero Motors has expertise in continuously variable transmissions (CVTs), EV transmissions, electric motors, integrated drive units and gear sets. It also has an early-mover position in the global e-bike powertrain market and is the only manufacturer in India producing and exporting CVT hubs and integrated electric powertrain products for e-bikes.
The business operates through two segments: Powertrain Solutions and Alloys and Metallics (A&M). Powertrain Solutions includes Gears and Transmissions (G&T), which caters to automotive and mobility applications, and Bike Powertrain (BPT), which serves micro-mobility applications and global e-bike manufacturers. The A&M segment manufactures sheet metal and tubular assemblies and components mainly for automotive OEMs.
The company has customer relationships with global names such as BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV and HWA, as well as leading e-bike manufacturers. Its technology capabilities are supported by in-house design and engineering teams and collaborations with global technology partners.
As of March 31, 2026, Hero Motors had 1,388 permanent employees and 707 contract labourers.
IPO Details
| Particulars | Details |
|---|---|
| IPO Date | 16 to 18 Sep, 2026 |
| Allotment | Mon, Sep 21, 2026 |
| Listing Date | Wed, Sep 23, 2026 |
| Face Value | ₹10 per share |
| Price Band | ₹79 to ₹84 per share |
| Lot Size | 178 Shares |
| Issue Type | Bookbuilding IPO |
| Sale Type | Fresh capital cum OFS |
| Total Issue Size | 11,90,47,618 shares (agg. up to ₹1,000 Cr) |
| Fresh Issue | 7,14,28,571 shares (agg. up to ₹600 Cr) |
| Offer for Sale | 4,76,19,047 shares of ₹10 (agg. up to ₹400 Cr) |
| Shareholding Pre-Issue | 38,27,87,005 shares |
| Shareholding Post-Issue | 45,42,15,576 shares |
| Listing Exchange | BSE, NSE |
(Compiled from RHP and market updates)
Industry Context
- The global two-wheeler industry grew from 12.54 million units in 2020 to 16.89 million units in 2025, supported by demand for affordable, efficient and sustainable mobility.
- Electric two-wheelers are gaining traction globally, with motorcycle EV penetration expected to rise from 2.0% in 2025 to 10.5%-12.5% by 2031, supported by battery technology, charging infrastructure and policy measures.
- The global e-bike market is projected to reach 12.5-14.5 million units by 2031, supported by increasing adoption across commuting, recreation and utility applications.
- The addressable market for Gears and Transmissions is expected to grow at 6%-8% CAGR between 2025 and 2031, while the Bike Powertrain market is projected to grow at 16%-18%.
- Rising vehicle electrification and growing e-bike adoption could support demand for EV transmissions, electric motors, integrated drive units and other specialised powertrain solutions.
Business Strengths
- Hero Motors has a first-mover position in e-bike powertrains and is the only Indian manufacturer producing and exporting CVT hubs and integrated electric powertrain products for e-bikes.
- The company has expanded its premium two-wheeler presence through partnerships with BMW, Ducati and a leading American OEM, covering design, development, validation and manufacturing capabilities globally.
- Its e-mobility business contributed 23.00% of revenue in Fiscal 2026, up from 16.12% in Fiscal 2025 and 12.03% in Fiscal 2024, indicating increasing exposure to electric mobility.
- The company has established relationships with global customers including BMW, Ducati, enviolo and HWA, supporting its presence across premium automotive and e-bike powertrain markets internationally.
- Hero Motors combines in-house design and engineering capabilities with an international product development centre and technology partnerships, enabling specialised powertrain solutions for evolving mobility requirements across markets.
Business Risks
- Hero Motors derives 72.89% of revenue from its top 10 customers in Fiscal 2026, making its financial performance vulnerable to the loss or reduction of major customer accounts and relationships.
- The company’s performance depends on automotive and mobility demand across India and international markets, exposing revenue to economic conditions, industry cycles, changing consumer preferences and broader market fluctuations.
- Hero Motors faces raw material price and availability risks, while disruptions in supplier deliveries, logistics or power supply could increase manufacturing costs and adversely affect production schedules and margins.
- Several subsidiaries reported losses in Fiscal 2026, which could require further capital support from Hero Motors and may affect consolidated profitability if their financial performance does not improve.
- The company faces legal and regulatory risks, including intellectual property-related disputes and other proceedings, which could result in financial costs, management time and potential reputational impact.
Financial Performance
Hero Motors Ltd. – Financials (₹ in Million)
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
|---|---|---|---|
| Revenue from Operations | 11,883.51 | 10,895.93 | 10,643.86 |
| EBITDA | 1,477.82 | 1,140.04 | 862.76 |
| EBITDA Margin (%) | 12.44% | 10.46% | 8.11% |
| Profit / (Loss) After Tax (PAT) | 411.68 | 327.96 | 170.35 |
| PAT Margin (%) | 3.46% | 3.01% | 1.60% |
| Return on Capital Employed (ROCE) (%) | 19.77% | 18.84% | 23.23% |
| Return on Equity (%) | 8.56% | 7.70% | 4.54% |
(Source: RHP)
Key Ratios & Metrics
| KPI | Mar 31, 2026 |
|---|---|
| Return on Equity (ROE) | 8.56% |
| Return on Capital Employed (ROCE) | 19.77% |
| Debt-to-Equity Ratio | 0.83 |
| Return on Net Worth (RoNW) | 8.53% |
| PAT Margin | 3.46% |
| EBITDA Margin | 12.44% |
| Net Asset Value (NAV per share) | ₹12.72 |
(Source: RHP)
Objects of the Offer
- ₹190 crore: Repayment/prepayment/redemption of certain outstanding borrowings.
- ₹200 crore: Purchase of equipment for capacity expansion at the Gautam Buddha Nagar, Uttar Pradesh facility.
- Remaining amount: Funding inorganic growth through unidentified acquisitions and strategic initiatives, along with general corporate purposes.
- OFS proceeds: The ₹400 crore proceeds from the offer for sale will go to the selling shareholders and will not be received by Hero Motors.
Conclusion
Hero Motors has an established presence in automotive powertrain solutions, with growing exposure to e-mobility and e-bike powertrains. Its global customer relationships, engineering capabilities and first-mover position in e-bike powertrains provide opportunities as vehicle electrification expands.
However, high customer concentration, losses reported by certain subsidiaries, dependence on automotive demand, raw material risks and legal and regulatory uncertainties remain key factors for investors to consider. Overall, the IPO provides exposure to the evolving automotive and e-mobility industry, but investors should assess the company’s growth prospects, financial performance and associated risks before making an investment decision.
Disclaimer: Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. This content is purely for informational purposes only and should not be considered as investment advice or a recommendation. Securities quoted are for illustration purposes only and not recommendatory. Investors are requested to do their own due diligence before investing.
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