Hero Motors
What they do: The company operates in the automotive sector, focusing on manufacturing and selling motor vehicles and related components. It has a strategic approach to asset acquisition and operational efficiency, as evidenced by its recent land purchase and lease termination.
By IPO Milega Research · Published · Updated
Hero Motors Limited shows strong financial fundamentals with consistent revenue growth, improving profit margins, and a solid return on equity.
- Listing gain
- -2.38%
- Listed at ₹82
- Subscribed
- 7.01x
- Total
- Retail odds
- 12%
- 1 in 8.6
GMP is an unofficial grey market indication. GMP updated 23 Sept, 14:44 IST.
- Price band
- ₹79-84
- Lot size
- 178 shares
- Min. investment
- ₹14,952
- Issue size
- 1000 Cr.
- Open16 Sept 2026
- Close18 Sept 2026
- Allotment21 Sept 2026
- Listing23 Sept 2026
Overview
Estimated from the current subscription figures. Tap a category to work it out for your application size.
- QIB
- 1.59x
- NII
- 10.47x
- Retail
- 8.62x
₹84 (+0.00%)
GMP trend
Unofficial grey market quotes, times in IST
Where the money goes
- To the company
- ₹600 Cr
- Fresh issue
- To selling shareholders
- ₹400 Cr
- Offer for sale
- Repayment/prepayment/redemption, in full or in part, of certain outstanding borrowings availed by our Company₹190 Cr24%
- Capital expenditure of our Company through purchase of equipment for expansion in capacity of our Gautam Buddha Nagar, Uttar Pradesh facility₹200 Cr25%
- Funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposesNot stated
- Offer for sale: goes to selling shareholders₹400 Cr51%
Outer ring: estimated gain
How the score adds up
The overall score is the average of these five, nudged by QIB demand once bidding closes.
- Financials8.0
- Performance8.0
- Flexibility8.0
- Timing7.0
- Risk4.0
The expected gains are based on the current Grey Market Premium (GMP) of 5.95%, indicating moderate investor interest and potential for listing gains. The company's strong financial fundamentals, consistent revenue growth, and strategic positioning in the e-mobility sector further support this potential.
Strengths2
- Increased revenue from ₹10,643.86 million in Fiscal 2024 to ₹11,883.51 million in Fiscal 2026.
- Expanded operations across multiple regions including the US, Europe, and India.
Concerns5
- Dependence on top customers for 72.89% of revenue, risking revenue loss if any are lost.
- Reliance on limited suppliers for critical raw materials, with 54.99% of expenses on raw materials.
- Criminal litigation for environmental violations could impact financials and reputation.
- High debt level of ₹4,270.17 million could strain financial resources.
- Compliance with strict performance requirements may lead to costly recalls or warranty claims.
Who gets shares
- QIB50%
- NII15%
- Retail35%
- Retail Minimum14,9521 lots, 178 shares
- Retail Maximum1,94,37613 lots, 2314 shares
- S-HNI Minimum2,09,32814 lots, 2492 shares
- S-HNI Maximum9,86,83266 lots, 11748 shares
- B-HNI Minimum10,01,78467 lots, 11926 shares
| Application | Lot size | Shares | Amount |
|---|---|---|---|
| Retail Minimum | 1 | 178 | 14,952 |
| Retail Maximum | 13 | 2314 | 1,94,376 |
| S-HNI Minimum | 14 | 2492 | 2,09,328 |
| S-HNI Maximum | 66 | 11748 | 9,86,832 |
| B-HNI Minimum | 67 | 11926 | 10,01,784 |
Timing
7.0/10The timing of Hero Motors' IPO appears favorable. The company has a robust cash position and its contingent liabilities, while present, are not expected to materially affect its financial health. The strategic partnerships and related party transactions indicate a stable operational environment, which could attract investors. The market conditions seem conducive for a successful IPO, although external economic factors should also be considered.
- Time to market
- Hero Motors' strong financial position and strategic partnerships suggest that the company is well-prepared for the IPO. The timing is likely advantageous given the company's ability to leverage its cash reserves and manage its liabilities effectively.
- How allotment works
- Basis of allotment finalized and shares credited to demat
- Market timing
- Favourable
- Time to market
- 8.0
- Listing on
- BSE & NSE
Key milestones
- 16 Sept 2026IPO Opens
- 18 Sept 2026IPO Closes
- 21 Sept 2026Basis of Allotment
- 22 Sept 2026Refunds Initiated
- 22 Sept 2026Credit to Demat Account
- 23 Sept 2026Listing Date
Financials
8.0/10- Revenue
- ₹1,217 Cr
- +9.5%
- Profit after tax
- ₹41.17 Cr
- +25.5%
- Net margin
- 3.4%
- +0.4 pts
- Assets
- ₹1,372 Cr
- +17.8%
- Return on equity
- 8.56%
- Revenue CAGR
- 4.12%
- ROCE
- 19.77%
- Return on net worth
- 8.53%
- NAV per share (₹)
- 12.72
Financial performance trend
Amount ₹ in croresHero Motors Limited shows strong financial fundamentals with consistent revenue growth, improving profit margins, and a solid return on equity. The company has managed to maintain a healthy EBITDA and adjusted EBITDA, indicating efficient operational management. The financial ratios suggest good liquidity and profitability, although the debt-to-equity ratio is not provided, which could impact the overall financial risk assessment.
Risk
4.0/10Read this score as a safety rating: 10/10 means the lowest risk, 1/10 the highest.
Where the risks sit
- Financial risks3
- Market risks1
- Operational risks2
- Regulatory risks1
High reliance on few customers and suppliers, regulatory compliance issues, and significant debt pose substantial risks to financial stability and operations.
How the company offsets these
Diversifying customer base and suppliers, enhancing compliance measures, and reducing debt could mitigate risks.
Financial risks3
- High debt level of ₹4,270.17 million could strain financial resources.
- Dependence on top customers for 72.89% of revenue, risking revenue loss if any are lost.
- Reliance on limited suppliers for critical raw materials, with 54.99% of expenses on raw materials.
Market risks1
- Significant portion of revenue from Europe exposes company to geopolitical and currency risks.
Operational risks2
- Loss of key management personnel could impair operations and customer relations.
- Compliance with strict performance requirements may lead to costly recalls or warranty claims.
Regulatory risks1
- Criminal litigation for environmental violations could impact financials and reputation.
Performance
8.0/10Hero Motors is a leading automotive technology company in India, focusing on powertrain solutions for EVs and ICEs. The company has shown consistent revenue growth and profitability, with a strong presence in key markets like the US, Europe, and India. However, it faces risks from market fluctuations, competition, and regulatory changes.
- Historical growth
- consistent, moderate
- Market comparison
- Hero Motors is well-positioned in the automotive technology sector, particularly in powertrain solutions for EVs and ICEs, competing effectively against peers in the US, Europe, and India.
- Future potential
- The company is expected to continue growing, driven by increasing demand for EVs and advancements in powertrain technology.
- Operational consistency
- The company has maintained stable revenue growth over the past three fiscal years, indicating operational consistency and effective execution of its business model.
- Experience
- The management team has significant experience in the automotive industry, particularly in powertrain solutions.
- Track record
- The management has successfully led the company through consistent growth and expansion into international markets.
Key achievements
- 01Increased revenue from ₹10,643.86 million in Fiscal 2024 to ₹11,883.51 million in Fiscal 2026.
- 02Expanded operations across multiple regions including the US, Europe, and India.
Flexibility
8.0/10Hero Motors has effectively capitalized on the global e-bike powertrain opportunity, establishing a strong presence in the e-mobility sector. Its strategic acquisitions and partnerships, such as with Hewland Engineering and Yamaha Motors, enhance its adaptability to market trends.
The company shows consistent revenue growth and improving gross margins, indicating financial stability. However, the net debt to adjusted EBITDA ratio suggests some leverage, which could impact flexibility.
Hero Motors has demonstrated operational agility through its strategic geographic dispersion of facilities and advanced manufacturing capabilities, allowing it to meet diverse market demands efficiently.
Hero Motors demonstrates strong flexibility and adaptability, driven by its strategic positioning in the e-mobility sector, diversified product offerings, and robust international presence.
- Product diversification
- Hero Motors offers a diversified product portfolio catering to both electric and internal combustion engine vehicles, including powertrain solutions and alloys and metallics components.
- Future adaptability
- Hero Motors is well-positioned to adapt to future market changes due to its strong R&D capabilities, strategic partnerships, and focus on e-mobility solutions.
Latest on Hero Motors IPO
The data on this page has been reviewed manually by the IPO Milega research team. It is not investment advice, and IPO Milega accepts no responsibility for losses arising from any investment decision. Investments in the securities market are subject to market risks. Read all the related documents, including the full prospectus, carefully before investing.