About the Business
Incorporated in April 1998, Hero Motors Limited is a high-precision automotive technology company specializing in the design, development, manufacturing, and supply of advanced powertrain solutions for automotive original equipment manufacturers (OEMs) across the United States, Europe, India, and the ASEAN region.
The company delivers comprehensive system-level and component-level powertrain architectures covering electric, hybrid, and internal combustion drivetrains across two-wheelers, performance cars, e-bikes, off-road vehicles, heavy-duty mobility, and emerging eVTOL applications. Hero Motors holds a commanding first-mover position in the global e-bike drivetrain space and is the only manufacturer in India producing and exporting Continuously Variable Transmission (CVT) hubs and integrated electric powertrain units.
- Two Diversified Operating Segments: Powertrain Solutions (comprising Gears & Transmissions for automotive applications and Bike Powertrain for micro-mobility/e-bikes) alongside Alloys and Metallics (A&M) (providing structural sheet metal and tubular assemblies).
- Deep Technological Expertise: In-house engineering capabilities spanning EV transmissions, electric motors, integrated drive units, gear sets, and CVT hubs.
- Marquee Global OEM Clientele: Entrenched tier-1 relationships with elite global automotive and mobility brands including BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV, and HWA, in addition to leading global e-bike manufacturers.
- Engineering & Operational Scale: Supported by a dedicated workforce of 1,388 permanent professionals and 707 contract personnel as of March 31, 2026.
The company’s promoters are Pankaj Munjal, Charu Munjal, Abhishek Munjal, and O P Munjal Holdings.
Financial Overview
Hero Motors Ltd. has sustained consistent top-line and operating profit momentum, with total income expanding to ₹1,216.74 Cr in FY26 and profit after tax (PAT) advancing by 26% year-on-year.
| Metric (₹ Cr) | FY 2026 | FY 2025 | FY 2024 |
|---|---|---|---|
| Total Income | ₹1,216.74 | ₹1,111.23 | ₹1,083.42 |
| Operating EBITDA | ₹147.78 | ₹114.00 | ₹86.28 |
| PAT (Profit After Tax) | ₹41.17 | ₹32.80 | ₹17.04 |
| Net Worth | ₹482.45 | ₹423.95 | ₹385.44 |
| Reserves & Surplus | ₹116.32 | ₹67.71 | ₹32.26 |
| Total Borrowings | ₹400.79 | ₹407.62 | ₹304.00 |
| Total Assets | ₹1,371.83 | ₹1,164.62 | ₹1,059.86 |
Restated Consolidated Figures | Source: RHP Filings
Key Financial Metrics (FY26)
Issue Reservation
| Investor Category | Allocation Limit |
|---|---|
| QIB Shares Offered | Not more than 50% of the Offer |
| Retail (RII) Shares Offered | Not less than 35% of the Offer |
| NII (HNI) Shares Offered | Not less than 15% of the Offer |
Objects of the Issue
The net proceeds from the ₹600.00 Cr fresh issue segment are earmarked for the following strategic objectives:
- Repayment, prepayment, or redemption, in full or in part, of certain outstanding borrowings ₹190.00 Cr
- Capital expenditure for equipment purchases to expand capacity at the Gautam Buddha Nagar (UP) facility ₹200.00 Cr
- Funding inorganic growth via strategic acquisitions and general corporate purposes Balance
Hero Motors Limited brings together strong corporate pedigree from the Pankaj Munjal branch of the Hero enterprise with high-value technical manufacturing capabilities. The company has built significant moats around precision powertrain manufacturing, emerging as a sole domestic exporter of integrated e-bike CVT transmissions while supplying tier-1 platforms like BMW and Ducati.
Proceeds from the ₹600 Cr primary tranche will immediately reduce balance sheet risk by paying down ₹190 Cr in borrowings (bringing Debt/Equity well below the current 0.83x level) while allocating ₹200 Cr toward capacity expansion in Uttar Pradesh. At the upper price band of ₹84, the issue commands a post-issue P/E of 92.31x against a market capitalization of ₹3,815.41 Cr. While this represents a high premium compared to traditional auto component peers, the scarcity value of global micro-mobility drivetrains and EV supply contracts makes Hero Motors an attractive proposition for long-term growth investors.
