IPO will list on 23 Sep'26
Hero Motors Limited
Minimum Investment
₹ 14,952 / 178 shares
Our Verdict:
Neutral
- Hero Motors is a powertrain solutions and alloy & metallics components manufacturer, part of the Munjal/Hero Group promoter family, supplying transmissions, gear systems and alloy/sheet metal components to automotive OEMs in India and internationally; revenue from operations grew from ₹1,064.39 crore (FY24) to ₹1,188.35 crore (FY26), and PAT more than doubled from ₹17.04 crore to ₹41.17 crore over the same period.
- Valuation is a central consideration: at the upper end of the price band, the issue has been priced at a post-issue P/E of approximately 92x and price-to-book of approximately 6.6x on FY26 earnings, against a PAT margin of only around 3.5% and ROE of around 8.6% — a demanding valuation relative to the current profitability and return profile.
- Revenue is meaningfully international: Europe alone contributed 33.59% of FY26 revenue from operations, giving the Company real currency, geopolitical and regional-demand exposure beyond the Indian market, alongside customer concentration where the top 10 customers made up 72.89% of FY26 revenue.
- Leverage has fluctuated rather than trended cleanly: total borrowings rose from ₹304.00 crore (FY24) to ₹407.62 crore (FY25) before easing slightly to ₹400.79 crore (FY26), broadly tracking the Company's revenue and capacity growth.
- § Consistent revenue and profit growth, an improving EBITDA base, and genuine international manufacturing and customer diversification (UK, Thailand, Europe) support the operating story, but the valuation is rich relative to current margins and returns, and the business carries real customer, supplier and European-market concentration — considerations that matter more here than in a business priced closer to its earnings power.
About the company
Founded in
1 Jan'98
Managing director
Amit Gupta
- Hero Motors is a powertrain solutions and alloy & metallics components manufacturer, operating across two business segments — Powertrain Solutions and Alloy & Metallics — supplying transmissions, gear systems, electric drive units and alloy/sheet metal/tubular assemblies primarily to automotive OEMs.
- The Company's products serve the two-wheeler, e-bike, passenger vehicle and other automotive segments in India and internationally, with Europe contributing 33.59% of FY26 revenue from operations.
- Operations run through manufacturing facilities and technology centres in India and abroad, including subsidiaries Hewland Engineering Limited (UK) and Hero Motors Thai Limited (Thailand), alongside other group entities supporting the Company's powertrain and alloy component businesses.
- Promoters: Pankaj Munjal, Charu Munjal, Abhishek Munjal and O P Munjal Holdings, part of the wider Munjal family associated with the Hero Group of companies; the Company is led operationally by Managing Director & CEO Amit Gupta.
STRENGTHS
- Diversified Powertrain and Alloy Components Manufacturer: Operates across Powertrain Solutions and Alloy & Metallics business segments, supplying components including transmissions, gear systems and alloy/sheet metal/tubular assemblies to automotive OEMs.
- Revenue and Profit Growth: Revenue from operations grew from ₹1,064.39 crore (FY24) to ₹1,188.35 crore (FY26); PAT grew from ₹17.04 crore to ₹41.17 crore over the same period, more than doubling.
- Improving EBITDA: EBITDA grew from ₹86.28 crore (FY24) to ₹147.78 crore (FY26), reflecting improving operating performance alongside revenue growth.
- International Manufacturing and Customer Footprint: Operates through subsidiaries including Hewland Engineering (UK) and Hero Motors Thai Limited, serving customers across India, Europe and other international markets.
- § Backed by the Munjal/Hero Group Promoter Family: Promoted by Pankaj Munjal, Charu Munjal, Abhishek Munjal and O P Munjal Holdings, part of the wider Munjal family associated with the Hero Group of companies.
RISK FACTORS
- European Revenue Dependency: Europe contributed 33.59% of FY26 revenue from operations (28.45% FY25, 29.33% FY24); adverse developments in these markets could materially affect results.
- Customer Concentration: Top 10 customers contributed 72.89% of FY26 revenue from operations (₹866.14 crore), down from 78.03% in FY25; loss of any of these customers could have a material adverse effect on the business.
- Limited Supplier Base Without Definitive Agreements: The Company depends on a limited set of suppliers for critical raw materials and does not have definitive supply agreements with all of them; interruptions in supply could adversely affect operations.
- Strict Customer Performance Requirements: The Company is subject to strict quality and delivery requirements from customers; failure to comply could lead to recalls, warranty claims, reduced share of business or order cancellations.
- Two-Wheeler and E-Bike Industry Dependency: The business depends significantly on the performance of the e-bike and two-wheeler industries in India and overseas; adverse changes in these industries could materially affect results.
Financials
All Values are in Cr.
Issue details
Issue type
Mainboard
Issue size
₹ ₹1,000 crore
Fresh Issue
₹ ₹600 crore
OFS
₹ ₹400 crore
Price range
₹ 79 - 84
Lot size
178 shares
Issue Objective
- Net Proceeds from the Fresh Issue (₹600 crore) are proposed to be used primarily for capital expenditure, repayment/prepayment of certain borrowings, and general corporate purposes; specific allocation details are set out in the Objects of the Offer section of the Red Herring Prospectus.
Dates
Bidding open
16 Sep'26
Bidding close
18 Sep'26
Allotment date
21 Sep'26
Refund date
22 Sep'26
Listing
23 Sep'26
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document (PDF)
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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