Hero Motors IPO: Munjal Group Company Opens for Subscription Tomorrow; Check the GMP
Hero Motors has launched its Initial Public Offering (IPO) today. The company plans to use the proceeds for capital expenditure, repayment of debt, funding inorganic growth, and general corporate purposes.
The IPO is a book-built issue of Rs. 1,000 crore. The issue comprises a fresh issue of 7.14 crore shares aggregating to Rs. 600 crore and an offer for sale (OFS) of 4.76 crore shares aggregating to Rs. 400 crore.
Hero Motors IPO opens for subscription on September 16, 2026, and closes on September 18, 2026. The allotment for the Hero Motors IPO is expected to be finalized on September 21, 2026. The IPO is proposed to list on September 23, 2026.
This IPO has set its issue price band at Rs. 79 to Rs. 84 per share. The lot size for an application is 178 shares. The minimum amount of investment required by a retail individual investor is Rs. 14,952 for 178 shares, based on the upper price band of Rs. 84 per share.
As of September 15th, 2026, the shares of Hero Motors in the grey market were trading at a 26.19 percent premium. The shares in the Grey Market traded at Rs. 106. This gives it a premium of Rs. 22 per share over the cap price of Rs. 84.00.
About the Company
Hero Motors Limited, incorporated in April 1998, is an automotive technology company engaged in designing, developing, and manufacturing engineered powertrain solutions for automotive OEMs across the US, Europe, India, and ASEAN markets. The company caters to both electric and non-electric mobility applications.
The company’s product range comprises CVTs, EV transmissions, electric motors, drive modules & gearing. The company offers these products for a wide range of mobility segments that include two-wheelers, e-bikes, electric & hybrid cars, off-road vehicles, trucks & others.
There are two main divisions in which the business works: Powertrain Solutions Division and Alloys and Metals (A&M) Division. The Powertrain Solutions division comprises Gears & Transmissions (G&T) and Bike Powertrain (BPT), and the A&M division comprises the production of sheet metal and tubular assemblies.
Hero Motors is in collaboration with international companies such as BMW, Ducati, Enviolo, Formula Motorsport, Hummingbird EV, and HWA. Hero Motors' areas of technology and innovation are in the company's design and engineering and collaborations with international technology firms.
As of March 31, 2026, Hero Motors had 1,388 permanent employees and 707 contract labourers. The company continues to focus on expanding its powertrain capabilities across automotive and emerging mobility applications.
Promoters of Hero Motors Limited
The promoters of Hero Motors Limited are Pankaj Munjal, Charu Munjal, Abhishek Munjal and O.P. Munjal Holdings, with expertise in automotive manufacturing, powertrain solutions, engineering, technology, business operations and strategic management, and experience across the automotive and mobility industry.
Offer for Sale of Hero Motors
The Offer for Sale (OFS) comprises shares offered by O.P. Munjal Holdings, a promoter selling shareholder, aggregating up to Rs. 395 crore, with a weighted average cost of acquisition of Rs. 0.03 per equity share. Hero Cycles Limited, a promoter group selling shareholder, will offer shares aggregating up to Rs. 5 crore, with a weighted average cost of acquisition of Rs. 10.07 per equity share.
Lead Managers of Hero Motors Limited IPO
The Book Running Lead Managers to the issue are ICICI Securities Limited, DAM Capital Advisors Limited and JM Financial Limited. KFin Technologies Limited has been appointed as the Registrar to the Issue. The Registrar will handle IPO-related activities such as application processing, allotment, and investor services.
Objectives of the IPO Offer
The company plans to utilise Rs. 190 crore of the net proceeds towards the repayment, prepayment, or redemption of certain outstanding borrowings. It will also use Rs. 200 crore for capital expenditure, primarily for purchasing equipment to expand the capacity of its facility in Gautam Buddha Nagar, Uttar Pradesh.
The remaining proceeds will be used to fund inorganic growth through unidentified acquisitions and other strategic initiatives, along with general corporate purposes. The total amount allocated towards the stated IPO objects is Rs. 390 crore.
Financial Analysis of Hero Motors Limited
Coming to the financial performance, Hero Motors Ltd. reported total income of Rs. 1,083.42 crore in FY24, which increased to Rs. 1,111.23 crore in FY25 and further to Rs. 1,216.74 crore in FY26, reflecting steady growth in income over the period.
The company’s profit after tax rose from Rs. 17.04 crore in FY24 to Rs. 32.80 crore in FY25 and further to Rs. 41.17 crore in FY26, indicating a significant improvement in profitability alongside the growth in total income.
Hero Motors Vs Peers
Compared with its listed peers, Hero Motors Limited reported revenue from operations of Rs. 1,188.35 crore in FY26. This was significantly lower than Endurance Technologies at Rs. 14,595.88 crore, UNO Minda at Rs. 19,657.59 crore, and CIE Automotive India at Rs. 9,406.47 crore.
Hero Motors reported an EPS of Rs. 1.15 in FY26, compared with Rs. 21.69 for CIE Automotive India, Rs. 67.66 for Endurance Technologies, Rs. 10.30 for Sona BLW Precision Forgings and Rs. 20.78 for UNO Minda.
On valuation, Hero Motors has a Net Asset Value (NAV) of 12.72, which is lower than CIE Automotive India at 164.65, Endurance Technologies at 442.54, Sona BLW at 93.93, UNO Minda at 113.77, and Varroc Engineering at 80.45.
In terms of return on net worth, Hero Motors recorded 8.53%, compared with 13.18% for CIE Automotive India, 15.29% for Endurance Technologies, 10.77% for Sona BLW, 19.59% for UNO Minda, and 18.70% for Varroc Engineering.
Strengths of Hero Motors
Strong R&D and engineering capabilities.
Long-term relationships with global OEMs.
Strong presence in the global e-mobility industry.
Diversified powertrain product and service offerings.
Experienced management and strong corporate governance.
Growing presence in electric bikes and premium two-wheelers.
Weaknesses of Hero Motors
Geographical Concentration: Europe contributed 33.59% of revenue in FY26, making the company vulnerable to adverse economic, regulatory, or industry developments in the region.
Industry Dependence: The company depends on the performance of the e-bike and two-wheeler industries in India and overseas markets, making it exposed to changes in demand and market conditions.
Supplier Dependence: Dependence on a limited set of suppliers for critical raw materials, along with the absence of definitive supply agreements with all suppliers, could create supply disruptions and affect operations.
Customer Requirements: The company is subject to strict customer requirements relating to quality and delivery. Failure to meet these standards could result in recalls, warranty claims, reduced business, or order cancellations.
Conclusion
Hero Motors’ IPO provides investors with an opportunity to participate in an automotive technology company with a diversified powertrain portfolio and established relationships with global OEMs. The company benefits from its engineering capabilities, presence across electric and non-electric mobility segments, and improving financial performance, with total income and profitability increasing between FY24 and FY26.
However, investors should consider key risks, including dependence on the e-bike and two-wheeler industries, significant revenue contribution from Europe, reliance on a limited set of suppliers, and stringent customer quality requirements. While Hero MotoCorp has demonstrated growth and improving profitability, investors should carefully evaluate the IPO valuation, growth prospects, financial performance, and associated risks before making an investment decision.