Hero Motors, backed by South Asia Growth Invest, submitted its draft papers for an initial public offering (IPO) on August 23. The flagship auto components firm of the Hero Motors Company (HIC) Group filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on Friday, the official DRHP revealed.
The firm plans to raise Rs 900 crore via the maiden offer, reported Moneycontrol. The public listing is a mix of a fresh issue of equity shares worth Rs 500 crore and an offer-for-sale (OFS) worth Rs 400 crore shares. Amongst the promoters, O P Munjal Holdings is offloading shares worth Rs 250 crore in the OFS, while others like Bhagyoday Investments and Hero Cycles are selling shares worth Rs 75 crore each in the issue.
O P Munjal accounts for a 71.55 per cent share (on a fully diluted basis) in the company, while Bhagyoday Investments owns 6.28 per cent of the firm and Hero Cycles holds a 2.03 per cent stake in the entity. South Asia Growth Invest has ownership of 12.27 per cent in Hero Motors.
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The firm could also look into a pre-IPO placement of Rs 100 crore before it files the Red Herring Prospectus with the Registrar of Companies (ROC). The report noted that if it manages to conclude the pre-IPO placement, the funds generated from it would be slashed from the amount set aside for general corporate purposes of the fresh issue.
The issue has ICICI Securities, JM Financial, and DAM Capital Advisors as the book running lead managers. Notably, the firm is amongst the leaders in automotive technology sector and provides electric and non-electric powertrain solutions to automotive original equipment manufacturers (OEMs) in the United States, India, Europe, and the Association of Southeast Asian (ASEAN) region.
It logged a profit of Rs 17 crore in the 2023-24 fiscal year (FY24), declining by 58 per cent against Rs 40.5 crore recorded in the preceding financial year.