Hero Motors IPO Review: Price Band, Dates, Lot Size, Financials and RisksHero Motors IPO Review: Price Band, Dates, Lot Size, Financials and Risks

The Hero Motors IPO opens on September 16 and closes on September 18, 2026. Hero Motors is an automotive technology company that designs and supplies powertrain solutions (including transmissions, electric motors and gear sets) to global OEMs like BMW, Ducati and e-bike manufacturers. The company is raising ₹1,000 crore through a fresh issue of ₹600 crore and an offer for sale of ₹400 crore by promoters.

IPO Snapshot

Event	Date
IPO Opens	September 16, 2026
IPO Closes	September 18, 2026
Allotment Date	September 21, 2026
Refund	September 22, 2026
Shares Credited to Demat	September 22, 2026
Listing Date (BSE, NSE)	September 23, 2026

Price Band and Lot Size

Detail	Value
Price Band	₹79 to ₹84 per share
Face Value	₹10 per share
Lot Size	178 shares
Minimum Investment	₹14,062 to ₹14,952
Retail Maximum	13 lots, or 2,314 shares (₹1,94,376)
Fresh Issue	₹600 crore
Offer for Sale	₹400 crore
Total Issue Size	₹1,000 crore
Listing	BSE and NSE

Pre-issue shareholding stood at 3,82,78,705 shares, rising to 4,54,21,557 shares post-issue. The fresh issue will bring new capital into Hero Motors, while the offer for sale of ₹400 crore will go to promoters O.P. Munjal Holdings (₹395 crore) and Hero Cycles Ltd. (₹5 crore). The company will not receive any proceeds from the offer-for-sale portion.

What Does Hero Motors Actually Do

Hero Motors, incorporated in April 1998, is an automotive technology company that designs, develops, manufactures and supplies engineered powertrain solutions to automotive original equipment manufacturers (OEMs) across the United States, Europe, India and ASEAN regions. Powertrains are the systems in vehicles that generate power and deliver it to the wheels, including transmissions, electric motors, gear sets and integrated drive units.

The company provides both electric and non-electric powertrain solutions for two-wheelers, performance cars, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and even eVTOL (electric vertical take-off and landing) aircraft. It is recognized for its expertise in continuously variable transmissions (CVT), EV transmissions, electric motors, and integrated drive units.

Hero Motors operates in two segments:

• Powertrain Solutions: Gears and Transmissions (G&T) for automotive and mobility applications, and Bike Powertrain (BPT) for micro-mobility and e-bike manufacturers.
• Alloys and Metallics (A&M): Sheet metal and tubular assemblies and components for automotive OEMs.

The company has long-term relationships with global customers including BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV and HWA, along with leading global e-bike manufacturers. It holds a first-mover position in the global e-bike powertrain market and is the only manufacturer in India producing and exporting CVT hubs and integrated electric powertrain products for e-bikes.

As of March 31, 2026, Hero Motors had 1,388 permanent employees and 707 contract labourers.

The Money Numbers

Metric	FY24	FY25	FY26
Total Income (₹ Crore)	1,083.42	1,111.23	1,188.35
Profit After Tax (₹ Crore)	17.04	32.80	41.17
Net Worth (₹ Crore)	385.44	423.95	482.45

Total income grew from ₹1,083.42 crore in FY24 to ₹1,188.35 crore in FY26, a rise of about 7% between FY25 and FY26. Profit after tax more than doubled from ₹17.04 crore to ₹41.17 crore over the same period, up 26% between FY25 and FY26. Net worth increased from ₹385.44 crore to ₹482.45 crore.

EBITDA rose from ₹86.28 crore in FY24 to ₹114.00 crore in FY25 and ₹147.78 crore in FY26, with EBITDA margin improving from 7.96% to 12.44%. Total borrowings stood at ₹400.79 crore in FY26, slightly down from ₹407.62 crore in FY25. Debt-to-equity improved from 0.79 to 0.83 over the period.

Return ratios were moderate: ROE stood at 8.56% and ROCE at 19.77% in FY26, with RoNW at 8.53% and NAV of ₹12.72 per share. Basic EPS for FY26 was ₹1.08 pre-issue and ₹0.91 post-issue. At the upper price band of ₹84, this implies a pre-issue P/E of 77.78 times and a post-issue P/E of 92.31 times. Price-to-book value at the offer price works out to 6.60 times.

Objects of the Issue

Purpose	Amount (₹ Crore)
Repayment or prepayment of certain outstanding borrowings	190.00
Capital expenditure for capacity expansion at Gautam Buddha Nagar, Uttar Pradesh facility	200.00
Funding inorganic growth through acquisitions and general corporate purposes	Balance amount
Total identified objects	390.00

Strengths

• Long-standing relationships with premium global OEMs like BMW and Ducati, providing revenue visibility and credibility.
• First-mover advantage in the global e-bike powertrain market, with a unique position as the only Indian manufacturer exporting CVT hubs and integrated electric powertrains for e-bikes.
• Diversified product portfolio spanning gears, transmissions, electric motors, integrated drive units, and sheet metal components across multiple vehicle segments.
• Strong R&D and engineering capabilities, with in-house design, prototyping and validation facilities.
• Consistent revenue and profit growth, with total income up 7% and PAT up 26% between FY25 and FY26.
• Improving EBITDA margin from 7.96% in FY24 to 12.44% in FY26.
• Experienced management team with strong corporate governance practices.
• Growing presence in high-growth segments like electric bikes and premium two-wheelers.

Risks

• The IPO is valued at a post-issue P/E of 92.31 times, which is significantly higher than recently listed auto-component peers like Dhoot Transmission (41.36x), Tenneco Clean Air (28.97x) and Studds Accessories (33.06x), making it a premium valuation.
• PAT margin remains low at 3.46% in FY26, indicating thin profitability despite revenue scale.
• Debt-to-equity stood at 0.83 times in FY26, which is moderate but still indicates reliance on debt financing.
• The offer includes a meaningful offer-for-sale component (₹400 crore) by promoters, representing a partial exit alongside the primary capital raise.
• Promoter shareholding will decline from 84.67% pre-issue to 61.63% post-issue, reflecting the combined effect of the fresh issue and the promoters’ OFS.
• The company operates in a highly competitive global automotive supply chain, with exposure to cyclicality in automotive demand, raw material price volatility, and geopolitical risks.
• A significant portion of the fresh-issue proceeds (about ₹210 crore) is earmarked for “unidentified acquisitions and strategic initiatives,” which introduces uncertainty about deployment.
• The business is capital intensive, with total assets of ₹1,371.83 crore and total borrowings of ₹400.79 crore as of FY26.

How to Apply

You can apply through Alice Blue by selecting your investor category, choosing the number of lots, and submitting your bid between September 16 and September 18.

If you do not want to track subscription numbers throughout the bidding window, Alice Blue’s IPO feature can apply on your behalf. Choose your category and lot size, confirm your UPI ID, and set a subscription trigger, such as below 1x, between 1x and 5x, or above 5x. The system tracks Hero Motors’ live subscription numbers and submits the application once the selected condition is met. You then receive a UPI payment request to approve. Funds are not deducted until shares are allotted.

Frequently Asked Questions