Hero Motors Ltd, the auto-components arm of the Hero Motors Company (HMC) Group, has submitted preliminary documents to the Securities and Exchange Board of India (Sebi) to raise Rs 9 billion through an initial public offering (IPO). According to the draft red herring prospectus (DRHP), the IPO will consist of a fresh issue of equity shares worth Rs 5 billion and an Offer-For-Sale (OFS) of shares valued at Rs 4 billion by the company's promoters.

The OFS will include Rs 2.5 billion worth of shares from O P Munjal Holdings and Rs 750 million each from Bhagyoday Investments and Hero Cycles.

The company is considering a pre-IPO placement of Rs 1 billion. If this placement occurs, the size of the fresh issue will be reduced accordingly.

The proceeds from the fresh issue will be allocated as follows: Rs 2.02 billion for debt repayment and Rs 1.24 billion for purchasing equipment needed to expand the company's facility in Gautam Buddha Nagar, Uttar Pradesh.

Hero Motors is a leading automotive technology company in India, specialising in designing, developing, manufacturing, and supplying advanced powertrain solutions to automotive OEMs in the United States, Europe, India, and the ASEAN region. The company offers both electric and non-electric powertrains for various vehicle categories, including two-wheelers, e-bikes, off-road vehicles, electric and hybrid cars, and heavy-duty vehicles.

Operating in two segments "powertrain solutions and alloys and metallics" Hero Motors has six manufacturing facilities across India, the United Kingdom, and Thailand. The company reported a revenue of Rs 10.64 billion from operations in the fiscal year 2024.

ICICI Securities, DAM Capital Advisors, and JM Financial are the book-running lead managers for the IPO. (ET)