Hero Motors Ltd IPO
Status: Upcoming
Overview
IPO date
16 Sept 2026 to 18 Sept 2026
Face value
₹ 10 per share
Price
₹ 79 to ₹84 per share
Issue Size
119,047,619 shares
(aggregating up to ₹ 1000 Cr)
(aggregating up to ₹ 1000 Cr)
Allotment Date
21 Sept 2026
Listing at
NSE
Issue type
Book Building
Sector
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Strengths vs Risks of Hero Motors Ltd
Know the pros & cons
Strengths
- Among India's Leading Solutions Provider to Global E-Mobility Industry backed by Diversified Product and Service Offerings.
- Growing Market Presence in the Electric Bikes and Premium Two-Wheelers Segments.
- Longstanding Relationships with Premier Global Original Equipment Manufacturers and Expertise in Delivering Solutions.
- Advanced Infrastructure with Geographically Diverse Operations.
- Strong Research and Development Capabilities and Long-Term Partnerships.
Risks
- The company generates a portion of its revenue from operations from jurisdictions outside India, in particular, from Europe which contributed 26.27%, 29.33%, 32.47% and 29.34% of the company's revenue from operations, in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively. Any adverse events affecting these jurisdictions could have an adverse impact on its revenue from operations.
- The company's business is dependent on the performance of certain industries particularly e-bikes and two wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company depends on a certain limited set of suppliers for the supply of critical raw materials. Further, the company does not have definitive supply agreements with all the company's suppliers for the supply of raw materials. Interruptions in the supply of raw materials could adversely affect its business, financial condition, results of operations and cash flows.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to recalls or warranty liability claims, reduction of share of business or the cancellation of existing or future orders, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company's business largely depends upon its top 10 customers. In the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022 the company's revenue from operations from top 10 customers was Rs. 6,010.73 million, Rs. 8,191.86 million, Rs. 9,369.23 million, and Rs. 7,859.23 million, representing 74.46%, 76.96%, 88.84%, and 85.97% of its revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company may not be able to anticipate and respond swiftly to changing technological and market trends, as well as to develop new products aligned with customer demands in the automotive sector, which could have an adverse impact on its financial condition.
- The company may not be able to compete effectively in the global powertrain solutions industry which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company's inability to maintain and protect its brand and business reputation could adversely affect the company's business, prospects and financial performance.
- The company's manufacturing facilities and technology centres are subject to operating risks. Any shutdown of its existing technology centres and manufacturing facilities or future technology centres and manufacturing facilities or any other operational problems caused by unforeseen events may reduce sales, market share and adversely affect its business, cash flows, results of operations and financial condition.
- The Company may not be successful in implementing its strategies, including increasing focus on providing complete systems and powertrain solution for e-mobility segment, expanding into other market segments and geographies which may adversely affect its business, cash flows, results of operations and future prospects.
- The Company has availed exemption from SEBI in respect of the requirement of complying with statutory lock-in under SEBI ICDR Regulations in respect of certain Equity Shares, which requires the company to comply with certain conditions including submissions/undertakings provided by the Company. Any failures by the Company to comply with these conditions may lead to non-compliance with the exemption granted by SEBI.
- Certain of its Subsidiaries have suffered losses in the nine months ended December 31, 2024 and the last three Fiscals. There can be no assurance that its Subsidiaries will be profitable in future, or that the company will be able to benefit from the funds the company has infused in them.
- The company has substantial capital expenditure and working capital requirements and may require additional capital and financing in the future and its operations could be curtailed if the company is unable to obtain the required additional capital and financing when needed.
- If the company experience a cyber security breach or other security incident or unauthorised parties otherwise obtain access to its customers data, the company may be perceived as not being secure, the company's reputation may be harmed, demand for its platform and products may reduce and the company may incur significant liabilities.
- The Company, Subsidiaries, Promoters, Directors, Key Managerial Personnel and members of the Senior Management are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its senior management and other personnel with technical expertise, and if the company is unable to recruit and retain qualified and skilled personnel,the company's business and its ability to operate or grow the company's business may be adversely affected.
- The company derives a certain portion of its revenue from operations from the company's Material Subsidiary, Hewland Engineering Limited ("HEL"). In the event there is any adverse impact on the business operations of HEL, the company's business, results of operations, cash flows and financial condition may be adversely affected.
- There have been delays in payment of statutory dues by the Company and its Subsidiaries in the nine months ended December 31, 2024, Fiscal 2024, 2023 and 2022. Inability to make timely payment of the company's statutory dues could result us into paying interest on the delay in payment of statutory dues which could adversely affect its business, the company's results of operations and financial condition.
- The company has provided guarantee and standby letters of credit to lenders for three of its Subsidiaries and any failures to repay such loans, may affect its business, results of operations and financial condition.
- The company's previous statutory auditors have included certain emphasis of matters in their audit reports on the consolidated financial statements as at and for the year ended March 31, 2022. The company cannot assure you that any similar emphasis of matters, will not form part of its financial statements for the future fiscal periods, which could have an adverse effect on the company's reputation, the trading price of the Equity Shares, results of operations, cash flows and financial condition.
- The company is subject to risks associated with expansion into new geographic regions.
- The company may undertake acquisitions, investments, joint ventures, technical collaborations or other strategic alliances, which may have a material adverse effect on its ability to manage the company's business, and such undertakings may be unsuccessful.
- The company may be unable to adequately protect its intellectual property and may be subject to risks of infringement claims.
- The company may not be able to sustain growth in the company's revenue from operations and profit for the year in future periods which could have an adverse impact on its financial condition and results of operation.
- The company's Promoter is involved in certain Group Companies which are empowered to engage in similar line of businesses as the company's.
- The company has received queries/ requests from certain erstwhile shareholders holding physical share certificates, in relation to entitlement to shares and dividend, conversion of their physical share certificates into dematerialised form and the status of shares held in physical form. the company may continue receiving such requests in the future.
- While its business is not seasonal, however, the company's business prospects and future financial performance depend on the demand for its products. Any decrease in demand for such products could adversely affect its business, results of operations and cash flows.
- Any disruption to power or fuel sources could increase its production costs and adversely affect the company's business, financial condition, cash flows and results of operations.
- The company's business and profitability are substantially dependent on the availability of steel, the company's primary raw material and any disruption to the timely and adequate supply of steel, may adversely impact its business, results of operations, cash flows and financial condition.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in the company's financing agreements could adversely affect its business, results of operations, cash flows and financial condition.
- The company's funding requirements and the proposed deployment of Net Proceeds are not appraised by any bank, financial institution, or any other independent agency, which may affect its business and results of operations. Further, the schedule of the implementation of the Objects for which funds are being raised in the Offer, is subject to risk of unanticipated delays in implementation and cost overruns.
- Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders' approval. While the Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for Sale.
- If the company's Net Proceeds to be utilised towards inorganic growth through unidentified acquisitions are insufficient for the cost of its proposed inorganic acquisition, the company may have to seek alternative forms of funding.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. The company's inability to successfully implement such capacity expansion or any future capacity expansion plans could have a material adverse effect on its business, prospects, operations, prospects or financial results.
- The company is dependents on third parties for the transportation and timely delivery of its products to customers. Any failures by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect the company's business.
- Certain of the company properties, including the company's Registered Office and Corporate Office, are located on leased premises. If these leases and license agreements are terminated or not renewed and the company is not able to identify alternative premises on terms acceptable to the company, its could adversely affect its business, financial condition, results of operations, and cash flows.
- A portion of the land where its Mangli Facility in Ludhiana, Punjab is located is yet to be registered in the favour of the Company
- The company is unable to trace some of its historical corporate and secretarial records and there has been a delay in filing of statutory forms with the RoC with respect to the appointment of an independent director. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in in this regard which may impact its financial condition and reputation.
- One of its Promoter Group entities, namely Nipman Fastener Industries Private Limited, is currently under the corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016. Additionally, insolvency proceedings have been initiated against one of the company's Promoter Group members, under Insolvency and Bankruptcy Code, 2016.
- One of its Directors was on the board of directors of companies which were struck off in the past.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company's operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The loss of certain independent certification and accreditation of its products and the manufacturing practices that the company has adopted could harm the company's business.
- The company's inability to accurately forecast demand for products that the company manufacture and supply to its customers and manage the company's inventory may have an adverse effect on its business, results of operations, financial condition and cash flows.
- The company's insurance coverage may not be adequate or the company may incur uninsured losses or losses in excess of its insurance coverage which may impact on the company's financial condition, cash flows and results in operations.
- Exchange rate fluctuations may adversely affect its business, financial conditions, cash flows and results of operations.
- The company has certain contingent liabilities that have been disclosed in the company's financial statements, which if they materialize, may adversely affect its results of operations, cash flows and financial condition.
- The company enters into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and cash flows.
- Any disruption to the steady and regular supply of workforce for its operations, including due to strikes, work stoppages or increased wage demands by its workforce or any other kind of disputes with the company's workforce or its inability to control the composition and cost of the company's workforce could adversely affect its business, cash flows and results of operations.
- The company engages contract labour for carrying out certain of its operations and the company is responsible for paying the wages of such workers. If the independent contractors through whom such workers are hired default on their obligations, this could have an adverse effect on its results of operations and financial condition.
- The company has applied for benefits under a production linked incentive scheme. In the event its application is rejected or there are any changes in the incentives under the PLI scheme, the company's revenue from operations and cash flows will be impacted.
- Technology failures could disrupt its operations and adversely affect the company's business operations and financial performance.
- The company imports machinery and raw materials from foreign countries and the same is subject to certain risks which may adversely affect its business, results of operations, financial condition and cash flows.
- Uncertain and lengthy vendor selection process with the company's customers may have an adverse impact on its business, cash flows, financial conditions and results of operations.
- Information relating to the company's annual installed capacity, annual average available capacity, actual production and the capacity utilization of its manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- Under-utilization of its manufacturing capacities and an inability to effectively utilize the company's expanded and proposed manufacturing capacities could have an adverse effect on its business, prospects, financial performance and cash flows.
- The company's Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Draft Red Herring Prospectus disclose information from the CRISIL Report which is a paid report and commissioned and paid for by the company exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company's Promoters and Directors are interested in the Company in addition to their remuneration and reimbursement of expenses and the Company has acquired and is in the process of acquiring land from certain related parties in the last five years.
- The company has entered into a joint venture agreement with Yamaha Motor Co. Ltd to establish its Subsidiary, HYM Drive Systems Private Limited ("HYM") which provides a right to Mitsui & Co. Ltd. ("Mitsui") to acquire 20% of the share capital of HYM.
- The company has entered into a joint venture agreement between Vermogensverwaltung Plettenberg GmbH and CO KG along with its group companies ("STP Group"), to establish our subsidiary MSIPL under which STP Group holds 49% of the share capital of MSIPL.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company's access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- The company may not successfully protect its technical know-how, which may result in the loss of the company's competitive advantage.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of a loan availed by the Company from ICICI Bank Limited which is an affiliate of ICICI Securities Limited, one of the BRLMs.
- The company has in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the powertrains industry, alloys and metallics and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.
- The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.
- The Company may not be able to pay dividends in the future. The company's ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures, and restrictive covenants of the company's financing arrangements.
- Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider them material to their assessment of its financial condition.
- The company generates a portion of its revenue from operations from jurisdictions outside India, in particular, from Europe which contributed 33.59%, 28.45% and 29.33%, of the company's revenue from operations, in Fiscal 2026, 2025 and 2024, respectively. Any adverse events affecting these jurisdictions could have an adverse impact on its revenue from operations.
- The company's business is dependent on the performance of certain industries particularly e-bikes and two wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company depends on a certain limited set of suppliers for the supply of critical raw materials. Further, the company does not have definitive supply agreements with all its suppliers for the supply of raw materials. Interruptions in the supply of raw materials could adversely affect the company's business, financial condition, results of operations and cash flows.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to recalls or warranty liability claims, reduction of share of business or the cancellation of existing or future orders, which could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company's business largely depends upon its top 10 customers. In Fiscals 2026, 2025 and 2024 the company's revenue from operations from top 10 customers was Rs. 8,661.40 million, Rs. 8,501.96 million and Rs. 8,191.86 million, representing 72.89%, 78.03% and 76.96% of its revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company may not be able to anticipate and respond swiftly to changing technological and market trends, as well as to develop new products aligned with customer demands in the automotive sector, which could have an adverse impact on its financial condition.
- The company may not be able to compete effectively in the global powertrain solutions industry which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The company's inability to maintain and protect its brand and business reputation could adversely affect the company's business, prospects and financial performance.
- The company's manufacturing facilities and technology centres are subject to operating risks. Any shutdown of its existing technology centres and manufacturing facilities or future technology centres and manufacturing facilities or any other operational problems caused by unforeseen events may reduce sales, market share and adversely affect the company's business, cash flows, results of operations and financial condition.
- The Company may not be successful in implementing its strategies, including increasing focus on providing complete systems and powertrain solution for e-mobility segment, expanding into other market segments and geographies which may adversely affect the company's business, cash flows, results of operations and future prospects.
- The Company has availed exemption from SEBI in respect of the requirement of complying with statutory lock-in under SEBI ICDR Regulations in respect of certain Equity Shares, which requires it to comply with certain conditions including submissions/undertakings provided by its. Any failures by the company to comply with these conditions may lead to non-compliance with the exemption granted by SEBI.
- Certain of its Subsidiaries have suffered losses in the last three Fiscals. There can be no assurance that the company's Subsidiaries will be profitable in future, or that its will be able to benefit from the funds the company has infused in them.
- The company has substantial capital expenditure and working capital requirements and may requires additional capital and financing in the future and its operations could be curtailed if the company is unable to obtain the required additional capital and financing when needed.
- If the company experience a cyber security breach or other security incident or unauthorised parties otherwise obtain access to its customers data, the company may be perceived as not being secure, its reputation may be harmed, demand for the company's platform and products may reduce and its may incur significant liabilities.
- The Company, Subsidiaries, Promoters, Directors, Key Managerial Personnel and members of the Senior Management are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its senior management and other personnel with technical expertise, and if the company is unable to recruit and retain qualified and skilled personnel, its business and the company's ability to operates or grow its business may be adversely affected.
- The company derives a certain portion of its revenue from operations from the company's Material Subsidiary, Hewland Engineering Limited ("HEL"). In the event there is any adverse impact on the business operations of HEL, its business, results of operations, cash flows and financial condition may be adversely affected.
- There have been delays in payment of statutory dues by the Company and its Subsidiaries in Fiscal 2026, Fiscal 2025 and Fiscal 2024. Inability to make timely payment of the company's statutory dues could result it into paying interest on the delay in payment of statutory dues which could adversely affect the company's business, its results of operations and financial condition.
- The company has provided guarantee and standby letters of credit to lenders for three of its Subsidiaries and any failures to repay such loans, may affect the company's business, results of operations and financial condition.
- The company is subject to risks associated with expansion into new geographic regions.
- Its may undertake acquisitions, investments, joint ventures, technical collaborations or other strategic alliances, which may have a material adverse effect on the company's ability to manage its business, and such undertakings may be unsuccessful.
- Its Promoters and Directors are interested in the Company in addition to their remuneration and reimbursement of expenses and the Company has acquired and is in the process of acquiring land from certain related parties in the last five years.
- Its may be unable to adequately protect the company's intellectual property and may be subject to risks of infringement claims.
- Its may not be able to sustain growth in the company's revenue from operations and profit for the year in future periods which could have an adverse impact on its financial condition and results of operation.
- The company's Promoter is involved in certain Group Companies which are empowered to engage in similar line of businesses as the company.
- The company has received queries/ requests from certain erstwhile shareholders holding physical share certificates, in relation to entitlement to shares and dividend, conversion of their physical share certificates into dematerialised form and the status of shares held in physical form. Its may continue receiving such requests in the future.
- While the company's business is not seasonal, however, its business prospects and future financial performance depends on the demand for the company's products. Any decrease in demand for such products could adversely affect its business, results of operations and cash flows.
- Any disruption to power or fuel sources could increase the company's production costs and adversely affect its business, financial condition, cash flows and results of operations.
- The company's business and profitability are substantially dependent on the availability of steel, its primary raw material and any disruption to the timely and adequate supply of steel, may adversely impact the company's business, results of operations, cash flows and financial condition.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company's business, results of operations, cash flows and financial condition.
- The company funding requirements and the proposed deployment of Net Proceeds are not appraised by any bank, financial institution, or any other independent agency, which may affect its business and results of operations. Further, the schedule of the implementation of the Objects for which funds are being raised in the Offer, is subject to risk of unanticipated delays in implementation and cost overruns.
- Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders approval. While the Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for Sale.
- If the company's Net Proceeds to be utilised towards inorganic growth through unidentified acquisitions are insufficient for the cost of its proposed inorganic acquisition, the company may have to seek alternative forms of funding.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company had applied for incentives under certain government schemes in the past for which its did not qualify. Any inability to obtain such incentives in the future could adversely affect the company's results of operations and financial condition.
- The company is dependent on third parties for the transportation and timely delivery of its products to customers. Any failures by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect the company's business.
- Certain of the company's properties, including its Registered Office and Corporate Office, are located on leased premises. If these leases and license agreements are terminated or not renewed and the company is not able to identify alternative premises on terms acceptable to the company, it could adversely affect the company's business, financial condition, results of operations, and cash flows.
- The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. The company's inability to successfully implement such capacity expansion or any future capacity expansion plans could have a material adverse effect on its business, prospects, operations, prospects or financial results.
- A portion of the land where the company's Mangli Facility in Ludhiana, Punjab is located is yet to be registered in the favour of the Company.
- The company is unable to trace some of its historical corporate and secretarial records and there has been a delay in filing of statutory forms with the RoC with respect to the appointment of an independent director. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in in this regard which may impact its financial condition and reputation.
- One of the company's Promoter Group entities, namely Nipman Fastener Industries Private Limited, is currently under the corporate insolvency resolution process under liquidation under the Insolvency and Bankruptcy Code, 2016. Additionally, insolvency proceedings have been initiated against one of its Promoter Group members, Priyanka Malhotra under the Insolvency and Bankruptcy Code, 2016.
- Certain of the company's Directors was on the board of directors of companies which were struck off in the past.
- The loss of certain independent certification and accreditation of its products and the manufacturing practices that the company has adopted could harm its business.
- The company's inability to accurately forecast demand for products that its manufacture and supply to the company's customers and manage its inventory may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- The company's insurance coverage may not be adequate or its may incur uninsured losses or losses in excess of the company's insurance coverage which may impact on its financial condition, cash flows and results in operations.
- Exchange rate fluctuations may adversely affect the company's business, financial conditions, cash flows and results of operations.
- The company has certain contingent liabilities that have been disclosed in its financial statements, which if they materialize, may adversely affect the company's results of operations, cash flows and financial condition.
- The company enters into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- Fraud, theft, employee negligence or similar incidents may adversely affect the company's results of operations and cash flows.
- Any disruption to the steady and regular supply of workforce for the company operations, including due to strikes, work stoppages or increased wage demands by its workforce or any other kind of disputes with the company's workforce or its inability to control the composition and cost of the company's workforce could adversely affect its business, cash flows and results of operations.
- The company engage contract labour for carrying out certain of its operations and the company is responsible for paying the wages of such workers. If the independent contractors through whom such workers are hired default on their obligations, this could have an adverse effect on its results of operations and financial condition.
- Technology failures could disrupt the company operations and adversely affect its business operations and financial performance.
- The company import machinery and raw materials from foreign countries and the same is subject to certain risks which may adversely affect its business, results of operations, financial condition and cash flows.
- Uncertain and lengthy vendor selection process with the company's customers may have an adverse impact on its business, cash flows, financial conditions and results of operations.
- Information relating to the company's annual installed capacity, annual average available capacity, actual production and the capacity utilization of its manufacturing facilities included in this Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- Under-utilization of the company's manufacturing capacities and an inability to effectively utilize its expanded and proposed manufacturing capacities could have an adverse effect on the company's business, prospects, financial performance and cash flows.
- The company's Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Red Herring Prospectus disclose information from the CRISIL Report which is a paid report and commissioned and paid for by the company exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company has entered into a joint venture agreement between Vermogensverwaltung Plettenberg GmbH and CO KG along with its group companies ("STP Group"), to establish the company's subsidiary MSIPL under which STP Group holds 49% of the share capital of MSIPL.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company's access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- The company may not successfully protect its technical know-how, which may result in the loss of the company's competitive advantage.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of certain loans availed by the Company from ICICI Bank Limited which is an affiliate of ICICI Securities Limited, one of the BRLMs.
- The company has in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the powertrains industry, alloys and metallics and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.
- The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.
- The Company may not be able to pay dividends in the future. Its ability to pay dividends in the future will depends on the company's earnings, financial condition, working capital requirements, capital expenditures, and restrictive covenants of its financing arrangements.
- Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider them material to their assessment of the company's financial condition.
Hero Motors Ltd Peer Comparison
Understand the company’s industry standing
Hero Motors Ltd
CIE Automotive India Ltd
Endurance Technologies Ltd
Face Value
10
10
10
Standalone / Consolidated
Consolidated
Consolidated
Consolidated
Total Income Rs. Cr.
1188.35
9406.47
14595.88
EPS-Basis
1.15
21.69
67.66
EPS-Diluted
1.14
21.69
67.66
NAV Per Share
12.72
164.65
442.54
P/E-Basic EPS
---
17.68
40.84
P/E-Diluted EPS
---
---
---
RONW(%)
8.53
13.18
15.29
Latest NAV Period
---
---
---
Latest NAV
---
---
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The IPO opens on 16 Sept 2026 & closes on 18 Sept 2026.
Hero Motors Limited was incorporated in the name of Hero Briggs & Stratton Auto Private Limited' as a Private Limited Company, dated April 30, 1998. Thereafter, the Company changed the name to Hero Auto Private Limited' and a fresh Certificate of Incorporation dated April 10, 2003 was issued by the Registrar of Companies, Delhi and Haryana. Again, the name changed to Hero Auto Limited' upon conversion to a Public Limited Company on October 30, 2003 and pursuant to fresh Certificate of Incorporation dated September 15, 2004 issued by the Registrar of Companies, Delhi and Haryana, the Company name was changed to Hero Motors Limited'.
Hero Motors Limited is a fully integrated powertrain systems provider offering comprehensive solutions for designing, prototyping, validating, developing, and delivering system-level transmission solutions for electric as well as nonelectric powertrains. Their operations are organized into: Powertrain Solutions; and Alloys and Metallics (A&M) business segments. Powertrains are integrated systems designed to propel a vehicle by converting energy into motion. They include the engine or motor, energy storage systems, the transmission, driveshaft, and other related components that work together to deliver power to the vehicle's wheels.
The Company commenced operations in 2001 with the A&M segment, focusing on sheet metal component manufacturing, machining of casting products and other sheet metal components. It entered into powertrain solutions segment in G&T and subsequently partnered with a US-based technology company, Enviolo, which owns patented technology known as continuous variable planetary transmission (CVP) or continuous variable transmission (CVT) in the automotive sector to grow the powertrain business further. The Company formed a joint venture with 'Yamaha Motors-Japan' in 2021 to manufacture electric motors which commenced operations in 2022.
In 2023, the Company launched a transmission manufacturing facility at Samut Prakan, Thailand, expanding gearbox supply within the ASEAN region. In 2023, the Company acquired STPL, a company focusing in manufacturing components for high-end bikes and e-bikes and further ventured into the electric drive unit (EDU) division for micro-mobility.
The Company is planning to raise funds from public through Initial Public Offering aggregating upto Rs 900 Crore Equity Shares, comprising a Fresh Issue of Rs 500 Crore and Offer for Sale upto Rs 400 Crore.
Hero Motors Ltd IPO will close on 18 Sept 2026.
- Among India's Leading Solutions Provider to Global E-Mobility Industry backed by Diversified Product and Service Offerings.
- Growing Market Presence in the Electric Bikes and Premium Two-Wheelers Segments.
- Longstanding Relationships with Premier Global Original Equipment Manufacturers and Expertise in Delivering Solutions.
- Advanced Infrastructure with Geographically Diverse Operations.
- Strong Research and Development Capabilities and Long-Term Partnerships.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | O P Munjal Holdings | 273123055 | 70.6 | 226099246 | 49.78 |
| 2 | Pankaj Munjal | 9400436 | 2.43 | 9400436 | 2.07 |
| 3 | Charu Munjal | 942425 | 0.24 | 942425 | 0.21 |
| 4 | Abhishek Munjal | 706210 | 0.18 | 706210 | 0.16 |
| 5 | Hero Cycles Limited | 7752750 | 2 | 7157512 | 1.58 |
| 6 | Aditya Munjal | 707022 | 0.18 | 707022 | 0.16 |
| 7 | Pankaj Munjal (on behalf of Mu | 392344 | 0.1 | 392344 | 0.09 |
| 8 | Bhagyoday Investments Private | 23978804 | 6.2 | 23978804 | 5.28 |
| 9 | Pankaj Munjal (on behalf of Om | 10537140 | 2.72 | 10537140 | 2.32 |
- The company generates a portion of its revenue from operations from jurisdictions outside India, in particular, from Europe which contributed 26.27%, 29.33%, 32.47% and 29.34% of the company's revenue from operations, in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively. Any adverse events affecting these jurisdictions could have an adverse impact on its revenue from operations.
- The company's business is dependent on the performance of certain industries particularly e-bikes and two wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company depends on a certain limited set of suppliers for the supply of critical raw materials. Further, the company does not have definitive supply agreements with all the company's suppliers for the supply of raw materials. Interruptions in the supply of raw materials could adversely affect its business, financial condition, results of operations and cash flows.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to recalls or warranty liability claims, reduction of share of business or the cancellation of existing or future orders, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company's business largely depends upon its top 10 customers. In the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022 the company's revenue from operations from top 10 customers was Rs. 6,010.73 million, Rs. 8,191.86 million, Rs. 9,369.23 million, and Rs. 7,859.23 million, representing 74.46%, 76.96%, 88.84%, and 85.97% of its revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company may not be able to anticipate and respond swiftly to changing technological and market trends, as well as to develop new products aligned with customer demands in the automotive sector, which could have an adverse impact on its financial condition.
- The company may not be able to compete effectively in the global powertrain solutions industry which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company's inability to maintain and protect its brand and business reputation could adversely affect the company's business, prospects and financial performance.
- The company's manufacturing facilities and technology centres are subject to operating risks. Any shutdown of its existing technology centres and manufacturing facilities or future technology centres and manufacturing facilities or any other operational problems caused by unforeseen events may reduce sales, market share and adversely affect its business, cash flows, results of operations and financial condition.
- The Company may not be successful in implementing its strategies, including increasing focus on providing complete systems and powertrain solution for e-mobility segment, expanding into other market segments and geographies which may adversely affect its business, cash flows, results of operations and future prospects.
- The Company has availed exemption from SEBI in respect of the requirement of complying with statutory lock-in under SEBI ICDR Regulations in respect of certain Equity Shares, which requires the company to comply with certain conditions including submissions/undertakings provided by the Company. Any failures by the Company to comply with these conditions may lead to non-compliance with the exemption granted by SEBI.
- Certain of its Subsidiaries have suffered losses in the nine months ended December 31, 2024 and the last three Fiscals. There can be no assurance that its Subsidiaries will be profitable in future, or that the company will be able to benefit from the funds the company has infused in them.
- The company has substantial capital expenditure and working capital requirements and may require additional capital and financing in the future and its operations could be curtailed if the company is unable to obtain the required additional capital and financing when needed.
- If the company experience a cyber security breach or other security incident or unauthorised parties otherwise obtain access to its customers data, the company may be perceived as not being secure, the company's reputation may be harmed, demand for its platform and products may reduce and the company may incur significant liabilities.
- The Company, Subsidiaries, Promoters, Directors, Key Managerial Personnel and members of the Senior Management are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its senior management and other personnel with technical expertise, and if the company is unable to recruit and retain qualified and skilled personnel,the company's business and its ability to operate or grow the company's business may be adversely affected.
- The company derives a certain portion of its revenue from operations from the company's Material Subsidiary, Hewland Engineering Limited ("HEL"). In the event there is any adverse impact on the business operations of HEL, the company's business, results of operations, cash flows and financial condition may be adversely affected.
- There have been delays in payment of statutory dues by the Company and its Subsidiaries in the nine months ended December 31, 2024, Fiscal 2024, 2023 and 2022. Inability to make timely payment of the company's statutory dues could result us into paying interest on the delay in payment of statutory dues which could adversely affect its business, the company's results of operations and financial condition.
- The company has provided guarantee and standby letters of credit to lenders for three of its Subsidiaries and any failures to repay such loans, may affect its business, results of operations and financial condition.
- The company's previous statutory auditors have included certain emphasis of matters in their audit reports on the consolidated financial statements as at and for the year ended March 31, 2022. The company cannot assure you that any similar emphasis of matters, will not form part of its financial statements for the future fiscal periods, which could have an adverse effect on the company's reputation, the trading price of the Equity Shares, results of operations, cash flows and financial condition.
- The company is subject to risks associated with expansion into new geographic regions.
- The company may undertake acquisitions, investments, joint ventures, technical collaborations or other strategic alliances, which may have a material adverse effect on its ability to manage the company's business, and such undertakings may be unsuccessful.
- The company may be unable to adequately protect its intellectual property and may be subject to risks of infringement claims.
- The company may not be able to sustain growth in the company's revenue from operations and profit for the year in future periods which could have an adverse impact on its financial condition and results of operation.
- The company's Promoter is involved in certain Group Companies which are empowered to engage in similar line of businesses as the company's.
- The company has received queries/ requests from certain erstwhile shareholders holding physical share certificates, in relation to entitlement to shares and dividend, conversion of their physical share certificates into dematerialised form and the status of shares held in physical form. the company may continue receiving such requests in the future.
- While its business is not seasonal, however, the company's business prospects and future financial performance depend on the demand for its products. Any decrease in demand for such products could adversely affect its business, results of operations and cash flows.
- Any disruption to power or fuel sources could increase its production costs and adversely affect the company's business, financial condition, cash flows and results of operations.
- The company's business and profitability are substantially dependent on the availability of steel, the company's primary raw material and any disruption to the timely and adequate supply of steel, may adversely impact its business, results of operations, cash flows and financial condition.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in the company's financing agreements could adversely affect its business, results of operations, cash flows and financial condition.
- The company's funding requirements and the proposed deployment of Net Proceeds are not appraised by any bank, financial institution, or any other independent agency, which may affect its business and results of operations. Further, the schedule of the implementation of the Objects for which funds are being raised in the Offer, is subject to risk of unanticipated delays in implementation and cost overruns.
- Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders' approval. While the Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for Sale.
- If the company's Net Proceeds to be utilised towards inorganic growth through unidentified acquisitions are insufficient for the cost of its proposed inorganic acquisition, the company may have to seek alternative forms of funding.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. The company's inability to successfully implement such capacity expansion or any future capacity expansion plans could have a material adverse effect on its business, prospects, operations, prospects or financial results.
- The company is dependents on third parties for the transportation and timely delivery of its products to customers. Any failures by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect the company's business.
- Certain of the company properties, including the company's Registered Office and Corporate Office, are located on leased premises. If these leases and license agreements are terminated or not renewed and the company is not able to identify alternative premises on terms acceptable to the company, its could adversely affect its business, financial condition, results of operations, and cash flows.
- A portion of the land where its Mangli Facility in Ludhiana, Punjab is located is yet to be registered in the favour of the Company
- The company is unable to trace some of its historical corporate and secretarial records and there has been a delay in filing of statutory forms with the RoC with respect to the appointment of an independent director. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in in this regard which may impact its financial condition and reputation.
- One of its Promoter Group entities, namely Nipman Fastener Industries Private Limited, is currently under the corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016. Additionally, insolvency proceedings have been initiated against one of the company's Promoter Group members, under Insolvency and Bankruptcy Code, 2016.
- One of its Directors was on the board of directors of companies which were struck off in the past.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company's operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The loss of certain independent certification and accreditation of its products and the manufacturing practices that the company has adopted could harm the company's business.
- The company's inability to accurately forecast demand for products that the company manufacture and supply to its customers and manage the company's inventory may have an adverse effect on its business, results of operations, financial condition and cash flows.
- The company's insurance coverage may not be adequate or the company may incur uninsured losses or losses in excess of its insurance coverage which may impact on the company's financial condition, cash flows and results in operations.
- Exchange rate fluctuations may adversely affect its business, financial conditions, cash flows and results of operations.
- The company has certain contingent liabilities that have been disclosed in the company's financial statements, which if they materialize, may adversely affect its results of operations, cash flows and financial condition.
- The company enters into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and cash flows.
- Any disruption to the steady and regular supply of workforce for its operations, including due to strikes, work stoppages or increased wage demands by its workforce or any other kind of disputes with the company's workforce or its inability to control the composition and cost of the company's workforce could adversely affect its business, cash flows and results of operations.
- The company engages contract labour for carrying out certain of its operations and the company is responsible for paying the wages of such workers. If the independent contractors through whom such workers are hired default on their obligations, this could have an adverse effect on its results of operations and financial condition.
- The company has applied for benefits under a production linked incentive scheme. In the event its application is rejected or there are any changes in the incentives under the PLI scheme, the company's revenue from operations and cash flows will be impacted.
- Technology failures could disrupt its operations and adversely affect the company's business operations and financial performance.
- The company imports machinery and raw materials from foreign countries and the same is subject to certain risks which may adversely affect its business, results of operations, financial condition and cash flows.
- Uncertain and lengthy vendor selection process with the company's customers may have an adverse impact on its business, cash flows, financial conditions and results of operations.
- Information relating to the company's annual installed capacity, annual average available capacity, actual production and the capacity utilization of its manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- Under-utilization of its manufacturing capacities and an inability to effectively utilize the company's expanded and proposed manufacturing capacities could have an adverse effect on its business, prospects, financial performance and cash flows.
- The company's Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Draft Red Herring Prospectus disclose information from the CRISIL Report which is a paid report and commissioned and paid for by the company exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company's Promoters and Directors are interested in the Company in addition to their remuneration and reimbursement of expenses and the Company has acquired and is in the process of acquiring land from certain related parties in the last five years.
- The company has entered into a joint venture agreement with Yamaha Motor Co. Ltd to establish its Subsidiary, HYM Drive Systems Private Limited ("HYM") which provides a right to Mitsui & Co. Ltd. ("Mitsui") to acquire 20% of the share capital of HYM.
- The company has entered into a joint venture agreement between Vermogensverwaltung Plettenberg GmbH and CO KG along with its group companies ("STP Group"), to establish our subsidiary MSIPL under which STP Group holds 49% of the share capital of MSIPL.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company's access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- The company may not successfully protect its technical know-how, which may result in the loss of the company's competitive advantage.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of a loan availed by the Company from ICICI Bank Limited which is an affiliate of ICICI Securities Limited, one of the BRLMs.
- The company has in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the powertrains industry, alloys and metallics and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.
- The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.
- The Company may not be able to pay dividends in the future. The company's ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures, and restrictive covenants of the company's financing arrangements.
- Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider them material to their assessment of its financial condition.
- The company generates a portion of its revenue from operations from jurisdictions outside India, in particular, from Europe which contributed 33.59%, 28.45% and 29.33%, of the company's revenue from operations, in Fiscal 2026, 2025 and 2024, respectively. Any adverse events affecting these jurisdictions could have an adverse impact on its revenue from operations.
- The company's business is dependent on the performance of certain industries particularly e-bikes and two wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.
- The company depends on a certain limited set of suppliers for the supply of critical raw materials. Further, the company does not have definitive supply agreements with all its suppliers for the supply of raw materials. Interruptions in the supply of raw materials could adversely affect the company's business, financial condition, results of operations and cash flows.
- The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to recalls or warranty liability claims, reduction of share of business or the cancellation of existing or future orders, which could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company's business largely depends upon its top 10 customers. In Fiscals 2026, 2025 and 2024 the company's revenue from operations from top 10 customers was Rs. 8,661.40 million, Rs. 8,501.96 million and Rs. 8,191.86 million, representing 72.89%, 78.03% and 76.96% of its revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.
- The company may not be able to anticipate and respond swiftly to changing technological and market trends, as well as to develop new products aligned with customer demands in the automotive sector, which could have an adverse impact on its financial condition.
- The company may not be able to compete effectively in the global powertrain solutions industry which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- The company operations involve activities and materials which are hazardous in nature and could result in a suspension of operations and/or the imposition of civil or criminal liabilities which could adversely affect its business, results of operations, cash flow and financial condition.
- The company's inability to maintain and protect its brand and business reputation could adversely affect the company's business, prospects and financial performance.
- The company's manufacturing facilities and technology centres are subject to operating risks. Any shutdown of its existing technology centres and manufacturing facilities or future technology centres and manufacturing facilities or any other operational problems caused by unforeseen events may reduce sales, market share and adversely affect the company's business, cash flows, results of operations and financial condition.
- The Company may not be successful in implementing its strategies, including increasing focus on providing complete systems and powertrain solution for e-mobility segment, expanding into other market segments and geographies which may adversely affect the company's business, cash flows, results of operations and future prospects.
- The Company has availed exemption from SEBI in respect of the requirement of complying with statutory lock-in under SEBI ICDR Regulations in respect of certain Equity Shares, which requires it to comply with certain conditions including submissions/undertakings provided by its. Any failures by the company to comply with these conditions may lead to non-compliance with the exemption granted by SEBI.
- Certain of its Subsidiaries have suffered losses in the last three Fiscals. There can be no assurance that the company's Subsidiaries will be profitable in future, or that its will be able to benefit from the funds the company has infused in them.
- The company has substantial capital expenditure and working capital requirements and may requires additional capital and financing in the future and its operations could be curtailed if the company is unable to obtain the required additional capital and financing when needed.
- If the company experience a cyber security breach or other security incident or unauthorised parties otherwise obtain access to its customers data, the company may be perceived as not being secure, its reputation may be harmed, demand for the company's platform and products may reduce and its may incur significant liabilities.
- The Company, Subsidiaries, Promoters, Directors, Key Managerial Personnel and members of the Senior Management are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.
- The company depends on its senior management and other personnel with technical expertise, and if the company is unable to recruit and retain qualified and skilled personnel, its business and the company's ability to operates or grow its business may be adversely affected.
- The company derives a certain portion of its revenue from operations from the company's Material Subsidiary, Hewland Engineering Limited ("HEL"). In the event there is any adverse impact on the business operations of HEL, its business, results of operations, cash flows and financial condition may be adversely affected.
- There have been delays in payment of statutory dues by the Company and its Subsidiaries in Fiscal 2026, Fiscal 2025 and Fiscal 2024. Inability to make timely payment of the company's statutory dues could result it into paying interest on the delay in payment of statutory dues which could adversely affect the company's business, its results of operations and financial condition.
- The company has provided guarantee and standby letters of credit to lenders for three of its Subsidiaries and any failures to repay such loans, may affect the company's business, results of operations and financial condition.
- The company is subject to risks associated with expansion into new geographic regions.
- Its may undertake acquisitions, investments, joint ventures, technical collaborations or other strategic alliances, which may have a material adverse effect on the company's ability to manage its business, and such undertakings may be unsuccessful.
- Its Promoters and Directors are interested in the Company in addition to their remuneration and reimbursement of expenses and the Company has acquired and is in the process of acquiring land from certain related parties in the last five years.
- Its may be unable to adequately protect the company's intellectual property and may be subject to risks of infringement claims.
- Its may not be able to sustain growth in the company's revenue from operations and profit for the year in future periods which could have an adverse impact on its financial condition and results of operation.
- The company's Promoter is involved in certain Group Companies which are empowered to engage in similar line of businesses as the company.
- The company has received queries/ requests from certain erstwhile shareholders holding physical share certificates, in relation to entitlement to shares and dividend, conversion of their physical share certificates into dematerialised form and the status of shares held in physical form. Its may continue receiving such requests in the future.
- While the company's business is not seasonal, however, its business prospects and future financial performance depends on the demand for the company's products. Any decrease in demand for such products could adversely affect its business, results of operations and cash flows.
- Any disruption to power or fuel sources could increase the company's production costs and adversely affect its business, financial condition, cash flows and results of operations.
- The company's business and profitability are substantially dependent on the availability of steel, its primary raw material and any disruption to the timely and adequate supply of steel, may adversely impact the company's business, results of operations, cash flows and financial condition.
- The company has incurred indebtedness and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company's business, results of operations, cash flows and financial condition.
- The company funding requirements and the proposed deployment of Net Proceeds are not appraised by any bank, financial institution, or any other independent agency, which may affect its business and results of operations. Further, the schedule of the implementation of the Objects for which funds are being raised in the Offer, is subject to risk of unanticipated delays in implementation and cost overruns.
- Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders approval. While the Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for Sale.
- If the company's Net Proceeds to be utilised towards inorganic growth through unidentified acquisitions are insufficient for the cost of its proposed inorganic acquisition, the company may have to seek alternative forms of funding.
- The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its business, financial condition, cash flows and results of operations.
- The company requires certain licenses, permits and approvals in the ordinary course of business, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
- The company had applied for incentives under certain government schemes in the past for which its did not qualify. Any inability to obtain such incentives in the future could adversely affect the company's results of operations and financial condition.
- The company is dependent on third parties for the transportation and timely delivery of its products to customers. Any failures by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect the company's business.
- Certain of the company's properties, including its Registered Office and Corporate Office, are located on leased premises. If these leases and license agreements are terminated or not renewed and the company is not able to identify alternative premises on terms acceptable to the company, it could adversely affect the company's business, financial condition, results of operations, and cash flows.
- The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. The company's inability to successfully implement such capacity expansion or any future capacity expansion plans could have a material adverse effect on its business, prospects, operations, prospects or financial results.
- A portion of the land where the company's Mangli Facility in Ludhiana, Punjab is located is yet to be registered in the favour of the Company.
- The company is unable to trace some of its historical corporate and secretarial records and there has been a delay in filing of statutory forms with the RoC with respect to the appointment of an independent director. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in in this regard which may impact its financial condition and reputation.
- One of the company's Promoter Group entities, namely Nipman Fastener Industries Private Limited, is currently under the corporate insolvency resolution process under liquidation under the Insolvency and Bankruptcy Code, 2016. Additionally, insolvency proceedings have been initiated against one of its Promoter Group members, Priyanka Malhotra under the Insolvency and Bankruptcy Code, 2016.
- Certain of the company's Directors was on the board of directors of companies which were struck off in the past.
- The loss of certain independent certification and accreditation of its products and the manufacturing practices that the company has adopted could harm its business.
- The company's inability to accurately forecast demand for products that its manufacture and supply to the company's customers and manage its inventory may have an adverse effect on the company's business, results of operations, financial condition and cash flows.
- The company's insurance coverage may not be adequate or its may incur uninsured losses or losses in excess of the company's insurance coverage which may impact on its financial condition, cash flows and results in operations.
- Exchange rate fluctuations may adversely affect the company's business, financial conditions, cash flows and results of operations.
- The company has certain contingent liabilities that have been disclosed in its financial statements, which if they materialize, may adversely affect the company's results of operations, cash flows and financial condition.
- The company enters into certain related party transactions in the ordinary course of its business and the company cannot assure you that such transactions will not have an adverse effect on its results of operation and financial condition.
- Fraud, theft, employee negligence or similar incidents may adversely affect the company's results of operations and cash flows.
- Any disruption to the steady and regular supply of workforce for the company operations, including due to strikes, work stoppages or increased wage demands by its workforce or any other kind of disputes with the company's workforce or its inability to control the composition and cost of the company's workforce could adversely affect its business, cash flows and results of operations.
- The company engage contract labour for carrying out certain of its operations and the company is responsible for paying the wages of such workers. If the independent contractors through whom such workers are hired default on their obligations, this could have an adverse effect on its results of operations and financial condition.
- Technology failures could disrupt the company operations and adversely affect its business operations and financial performance.
- The company import machinery and raw materials from foreign countries and the same is subject to certain risks which may adversely affect its business, results of operations, financial condition and cash flows.
- Uncertain and lengthy vendor selection process with the company's customers may have an adverse impact on its business, cash flows, financial conditions and results of operations.
- Information relating to the company's annual installed capacity, annual average available capacity, actual production and the capacity utilization of its manufacturing facilities included in this Red Herring Prospectus is based on various assumptions and estimates and future production and capacity utilization may vary.
- Under-utilization of the company's manufacturing capacities and an inability to effectively utilize its expanded and proposed manufacturing capacities could have an adverse effect on the company's business, prospects, financial performance and cash flows.
- The company's Promoters and members of its Promoter Group will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.
- Certain sections of this Red Herring Prospectus disclose information from the CRISIL Report which is a paid report and commissioned and paid for by the company exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
- The company has entered into a joint venture agreement between Vermogensverwaltung Plettenberg GmbH and CO KG along with its group companies ("STP Group"), to establish the company's subsidiary MSIPL under which STP Group holds 49% of the share capital of MSIPL.
- The company's ability to access capital at attractive costs depends on its credit ratings. Non-availability of credit ratings or a poor rating may restrict the company's access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.
- The company may not successfully protect its technical know-how, which may result in the loss of the company's competitive advantage.
- A portion of the Net Proceeds may be utilized for repayment or pre-payment of certain loans availed by the Company from ICICI Bank Limited which is an affiliate of ICICI Securities Limited, one of the BRLMs.
- The company has in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the powertrains industry, alloys and metallics and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.
- The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.
- The Company may not be able to pay dividends in the future. Its ability to pay dividends in the future will depends on the company's earnings, financial condition, working capital requirements, capital expenditures, and restrictive covenants of its financing arrangements.
- Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider them material to their assessment of the company's financial condition.
The Issue type of Hero Motors Ltd is Book Building.
The minimum application for shares of Hero Motors Ltd is 178.
The total shares issue of Hero Motors Ltd is 119047619.
Initial public offer of up to 119,047,619 equity shares of face value of Rs. 10 each ("Equity Shares") of Hero Motors Limited ("Company" or "Issuer") for cash at a price of Rs. 84 per equity share ( including a share premium of Rs. 74 per equity share) ("Offer Price") aggregating up to Rs. 1000.00 Crores comprising a fresh issue of up to 71,428,571 equity shares aggregating up to Rs. 600.00 Crores by the company ("Fresh Issue") and an offer for sale of up to 47,619,048 equity shares aggregating up to Rs.400.00 Crores ("Offered Shares") by the selling shareholders, comprising up to 47,023,809 equity shares aggregating up to Rs.395.00 Crores by O P Munjal Holdings ("Promoter Selling Shareholder") and up to 595,238 equity shares aggregating up to Rs.5.00 Crores by Hero Cycles Limited (the "Promoter Group Selling Shareholder" and together with the promoter selling shareholder, the "Selling Shareholders" ), and such offer for sale, the "Offer For Sale", and together with the fresh issue, the "Offer". The offer shall constitute [*] % of the post-offer paid-up equity share capital of the company.
Price Band: Rs. 79 to Rs. 84 per equity share of face value of Rs. 10 each.
The floor price is 7.9 times the face value of the equity shares and the cap price is 8.4 times the face value of the equity shares.
Bids can be made for a minimum of 178 equity shares of face value of Rs. 10 each and in multiples of 178 equity shares of face value of Rs. 10 each thereafter.