Hero Motors’ ₹1,000-crore initial public offering (IPO) received a strong response on its opening day, with the issue fully subscribed on Wednesday, September 16. Retail investors led the early demand as the auto components maker opened its three-day share sale.
The IPO, which opened on September 16, will remain available for subscription until September 18. The company has fixed a price band of ₹79 to ₹84 per share, with a lot size of 178 shares. At the upper end of the price band, retail investors need ₹14,952 to apply for one lot.
The issue comprises a fresh share sale worth ₹600 crore and an offer for sale (OFS) of ₹400 crore. The fresh issue proceeds are planned to be used for debt repayment, capital expenditure, capacity expansion and strategic initiatives, including potential acquisitions.
The strong opening-day response comes as investor interest in the Indian automobile and auto components sector remains high. Hero Motors is seeking a valuation of around $401 million through the public issue.
Hero Motors is an automotive technology company that develops and manufactures powertrain solutions for vehicle manufacturers. Its products cover both traditional internal combustion engine vehicles and newer electric and hybrid platforms.
The company supplies components and powertrain systems for two-wheelers, e-bikes, performance vehicles, off-road vehicles, heavy-duty vehicles and electric vertical take-off and landing aircraft, or eVTOLs. Its customer base includes global names such as BMW and Ducati.
Hero Motors operates through two main businesses — Powertrain Solutions and Alloys & Metallics. Its technology portfolio includes continuously variable transmissions, electric vehicle transmissions, electric motors, integrated drive units and gear sets.
The company has also been expanding its presence in electric mobility. Revenue from its electric vehicle segment increased to 23% of total revenue in FY26, compared with 12% in FY24. Around 41% of its revenue comes from international markets, giving the business exposure beyond India.
Its manufacturing network spans India, the UK and Thailand. As of March 31, 2026, Hero Motors had six manufacturing facilities and technology centres in the UK and Uttar Pradesh. It is also setting up additional facilities in Ludhiana and Bengaluru.
The company has reported improvement in its financial performance over the past three years. Revenue from operations increased from ₹1,064.39 crore in FY24 to ₹1,089.59 crore in FY25 and ₹1,188.35 crore in FY26.
Profit after tax also rose from ₹17.04 crore in FY24 to ₹32.80 crore in FY25 and ₹41.17 crore in FY26. EBITDA increased to ₹147.78 crore in FY26 from ₹114 crore a year earlier, while the EBITDA margin improved to 12.44% from 10.46%. Operating cash flow stood at ₹144.04 crore in FY26.
The company plans to use about ₹190 crore from the fresh issue to repay, prepay or redeem certain borrowings. Another ₹200 crore is earmarked for capital expenditure, including equipment for capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh. Some funds will also be available for unidentified acquisitions and other strategic initiatives.
Hero Motors’ IPO has also been closely watched in the grey market. The grey market premium, or GMP, was around ₹19 on September 16, compared with ₹24 on September 12 and 13. At the upper IPO price of ₹84, a ₹19 GMP indicates an unofficial estimated price of about ₹103. GMP, however, is not an official market indicator and does not guarantee the actual listing price.
The company also faces risks that investors will be watching as the IPO progresses. Customer concentration is one concern, with the top 10 customers accounting for nearly 73% of revenue in FY26. Overseas exposure, particularly to Europe, also leaves the business exposed to changes in international demand and economic conditions.
Raw material costs are another factor. Steel is a key input, and changes in its price or availability can affect manufacturing costs and margins. The company has also identified dependence on a limited number of suppliers as a potential operational risk.
The IPO has reserved 50% of the issue for qualified institutional buyers, 15% for non-institutional investors and 35% for retail investors. Shares are expected to be allotted on September 21, refunds are scheduled for September 22, and Hero Motors shares are expected to list on September 23.
The first-day subscription gives the ₹1,000-crore Hero Motors IPO a strong start, but the final subscription figures will depend on demand across investor categories during the remaining bidding period. The IPO will remain open until September 18.
