Hero Motors IPO is a ₹1,000 crore mainboard book-built issue comprising a ₹600 crore fresh issue and a ₹400 crore offer for sale (OFS). The Hero Motors IPO is scheduled to open on September 16, 2026, and close on September 18, 2026, with the price band fixed at ₹79 to ₹84 per equity share. Hero Motors is an automotive technology company focused on powertrain solutions for electric and non-electric vehicles, with customers across India, the United States, Europe and the ASEAN region.
The company has reported improving revenue and profitability, with revenue from operations rising from ₹1,064.39 crore in FY2024 to ₹1,188.35 crore in FY2026 and profit after tax increasing from ₹17.04 crore to ₹41.17 crore. However, high customer concentration, relatively low PAT margins, debt, losses at several subsidiaries and the valuation implied by the IPO price are key factors investors need to consider.
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Table of Contents
- Hero Motors IPO Details
- What Does Hero Motors Do?
- How Does Hero Motors Make Money?
- Hero Motors IPO Financial Performance
- Hero Motors Revenue Growth
- Hero Motors Profit Growth
- Hero Motors IPO Debt Position
- How Will Hero Motors Use the IPO Money?
- Hero Motors IPO Valuation
- Hero Motors IPO Growth Drivers
- What Are the Major Risks in Hero Motors IPO?
- Hero Motors IPO Strengths vs Risks
- Hero Motors IPO Review: Should You Apply?
- Hero Motors IPO: Key Things Investors Should Track
- Hero Motors IPO: Key Takeaway
- Hero Motors IPO Verdict
- Hero Motors IPO FAQs
Hero Motors IPO is a ₹1,000 crore mainboard book-built issue consisting of a ₹600 crore fresh issue and a ₹400 crore offer for sale. The fresh issue proceeds will be received by the company, while the proceeds from the OFS will go to the selling shareholders. The equity shares are proposed to be listed on both BSE and NSE.
The RHP dated September 9, 2026 confirms the IPO structure, bidding period and proposed listing details.
| Particular |
Details |
| Company |
Hero Motors Limited |
| IPO issue size |
₹1,000 crore |
| Fresh issue |
₹600 crore |
| Offer for sale |
₹400 crore |
| Price band |
₹79 to ₹84 per share |
| Face value |
₹10 per share |
| IPO date |
September 16 to September 18, 2026 |
| Anchor bidding |
September 15, 2026 |
| Minimum lot |
178 shares |
| Minimum investment at upper band |
₹14,952 |
| Listing |
BSE and NSE |
| Book running lead managers |
ICICI Securities, DAM Capital Advisors and JM Financial |
| Registrar |
KFin Technologies |
The Hero Motors IPO price is fixed at ₹79 to ₹84 per equity share. At the upper price band of ₹84, the minimum investment for one lot of 178 shares is ₹14,952.
The IPO will open for subscription on September 16, 2026, and close on September 18, 2026. Anchor investor bidding is scheduled for September 15, 2026.
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Get the latest updates on the Hero Motors IPO, including the issue size, price band, lot size, dates and other key offer details.
Hero Motors is an automotive technology company that designs, develops, manufactures and supplies engineered powertrain solutions to automotive original equipment manufacturers (OEMs).
Its products are used across several mobility applications, including two-wheelers, performance vehicles, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and other automotive applications.
The company operates through two principal segments:
-
Powertrain Solutions
-
Alloys & Metallics
The Powertrain Solutions segment includes gears and transmission systems, bike powertrain products and electric mobility-related products. Hero Motors also provides design, prototyping, validation and development capabilities.
The company has customers and business relationships with companies including BMW, Ducati, enviolo and Hero MotoCorp, along with other global mobility companies.
Its business is geographically diversified across domestic and international markets. In FY2026, international customers contributed 41.36% of revenue from operations, while domestic customers contributed 58.64%.
Hero Motors generates revenue primarily by supplying automotive components, systems and powertrain solutions to OEM customers. Its revenue is divided between Powertrain Solutions and Alloys & Metallics.
In FY2026, Powertrain Solutions generated ₹637.75 crore, accounting for 53.67% of revenue from operations. Alloys & Metallics contributed ₹550.60 crore, or 46.33%.
| Segment |
FY2026 Revenue |
| Powertrain Solutions |
₹637.75 crore |
| Alloys & Metallics |
₹550.60 crore |
| Total revenue from operations |
₹1,188.35 crore |
The Powertrain Solutions segment has become increasingly important to Hero Motors. Its contribution to revenue increased from 48.88% in FY2024 to 53.67% in FY2026.
Within Powertrain Solutions, gears and transmission products remained the largest contributor. The EV portion of gears and transmission revenue increased significantly from ₹25.90 crore in FY2024 to ₹119.81 crore in FY2026.
This indicates that EV-related products are becoming a larger part of the company's powertrain business, although the overall business continues to include both electric and non-electric vehicle applications.
Hero Motors reported an improvement in revenue, EBITDA, and PAT between FY2024 and FY2026. Revenue from operations increased from ₹1,064.39 crore in FY2024 to ₹1,188.35 crore in FY2026.
EBITDA increased from ₹86.28 crore to ₹147.78 crore over the same period, while adjusted EBITDA rose from ₹125.74 crore to ₹160.24 crore. Profit after tax increased from ₹17.04 crore in FY2024 to ₹41.17 crore in FY2026.
Financial Performance FY2024
| Financial Metric |
FY2024 |
| Revenue from operations |
₹1,064.39 crore |
| EBITDA |
₹86.28 crore |
| Adjusted EBITDA |
₹125.74 crore |
| PAT |
₹17.04 crore |
| EBITDA margin |
8.11% |
| PAT margin |
1.60% |
| ROE |
4.54% |
| ROCE |
23.23% |
Financial Performance FY2025
| Financial Metric |
FY2025 |
| Revenue from operations |
₹1,089.59 crore |
| EBITDA |
₹114.00 crore |
| Adjusted EBITDA |
₹128.82 crore |
| PAT |
₹32.80 crore |
| EBITDA margin |
10.46% |
| PAT margin |
3.01% |
| ROE |
7.70% |
| ROCE |
18.84% |
Financial Performance FY2026
| Financial Metric |
FY2026 |
| Revenue from operations |
₹1,188.35 crore |
| EBITDA |
₹147.78 crore |
| Adjusted EBITDA |
₹160.24 crore |
| PAT |
₹41.17 crore |
| EBITDA margin |
12.44% |
| PAT margin |
3.46% |
| ROE |
8.56% |
| ROCE |
19.77% |
One of the key positives in Hero Motors IPO financial performance is the improvement in operating margins. EBITDA margin increased from 8.11% in FY2024 to 12.44% in FY2026.
However, the PAT margin remained relatively low at 3.46% in FY2026. In simple terms, Hero Motors generated around ₹3.46 of net profit for every ₹100 of revenue during the year.
The difference between EBITDA growth and PAT growth is also important. Finance costs, depreciation and taxes affect the final profit available to shareholders, so investors need to assess the company's net earnings alongside its operating performance.
Hero Motors' revenue from operations increased from ₹1,064.39 crore in FY2024 to ₹1,188.35 crore in FY2026. Revenue growth was modest in FY2025 but accelerated in FY2026.
Based on the company's disclosed KPIs, revenue growth was 0.93% in FY2024, 2.37% in FY2025 and 9.06% in FY2026.
The improvement in FY2026 was accompanied by higher gross profit and EBITDA. Gross margin also increased from 39.40% in FY2024 to 41.69% in FY2026.
Therefore, the financial performance shows improvement not only in revenue but also in operating profitability.
The Powertrain Solutions segment has also increased its contribution to the business, rising from 48.88% of revenue in FY2024 to 53.67% in FY2026. This shift is relevant to the Hero Motors IPO because powertrain products are a central part of the company's automotive technology strategy.
Hero Motors' PAT increased from ₹17.04 crore in FY2024 to ₹32.80 crore in FY2025 and ₹41.17 crore in FY2026.
This represents a substantial improvement in profit over the two-year period. EBITDA also increased from ₹86.28 crore in FY2024 to ₹147.78 crore in FY2026.
The increase in EBITDA was accompanied by an expansion in EBITDA margin from 8.11% to 12.44%.
The company's profitability has therefore improved faster than its revenue. However, investors should distinguish between operating profit and net earnings because finance costs, depreciation and taxes determine the final PAT.
The FY2026 PAT margin of 3.46% remains an important metric to monitor, particularly because the IPO valuation is relatively high compared with current earnings.
Hero Motors had total borrowings of ₹400.79 crore as of March 31, 2026, compared with ₹407.62 crore in FY2025 and ₹304.00 crore in FY2024.
Adjusted net debt stood at approximately ₹358.40 crore as of March 31, 2026. The company's net debt to adjusted EBITDA ratio improved to 2.24 times in FY2026 from 2.79 times in FY2025.
Debt Position FY2024
| Debt Metric |
FY2024 |
| Total borrowings |
₹304.00 crore |
| Net debt / Adjusted EBITDA |
1.72x |
| ROCE |
23.23% |
Debt Position FY2025
| Debt Metric |
FY2025 |
| Total borrowings |
₹407.62 crore |
| Net debt / Adjusted EBITDA |
2.79x |
| ROCE |
18.84% |
Debt Position FY2026
| Debt Metric |
FY2026 |
| Total borrowings |
₹400.79 crore |
| Net debt / Adjusted EBITDA |
2.24x |
| ROCE |
19.77% |
The IPO is partly intended to reduce the company's debt. Hero Motors plans to use ₹190 crore from the fresh issue towards repayment, prepayment or redemption of certain outstanding borrowings.
Debt reduction could reduce finance costs and strengthen the balance sheet. However, investors should monitor the actual reduction in borrowings and its impact on finance costs after the IPO.
Hero Motors will receive the proceeds from the ₹600 crore fresh issue. The company has identified debt repayment, capacity expansion, acquisitions, strategic initiatives and general corporate purposes as the principal uses of the proceeds.
| Use of Funds |
Amount / Limit |
| Repayment/prepayment of borrowings |
₹190 crore |
| Capacity expansion at Gautam Buddha Nagar facility |
₹200 crore |
| Acquisitions, strategic initiatives and general corporate purposes |
Balance amount, subject to stated limits |
The company plans to invest ₹200 crore in equipment required for capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh.
Another portion of the fresh issue has been earmarked for unidentified acquisitions, strategic initiatives and general corporate purposes. According to the RHP, the combined amount for inorganic growth and general corporate purposes cannot exceed 35% of the gross proceeds from the fresh issue.
The use of proceeds therefore has two relatively identifiable components, namely debt reduction and capacity expansion, while the acquisition and strategic initiative component carries greater uncertainty because specific acquisition targets have not been identified.
Hero Motors IPO valuation is an important consideration because the issue price implies a relatively high P/E multiple based on FY2026 earnings.
The company had 38.28 crore equity shares outstanding before the offer. The fresh issue will increase the number of shares because new equity shares are being issued.
At the upper price band of ₹84, the implied post-issue market capitalisation is approximately ₹3,815 crore.
Hero Motors reported FY2026 diluted EPS of ₹1.14. Based on this EPS, the IPO price of ₹84 implies a P/E multiple of approximately 73.7 times. At ₹79, the implied P/E is approximately 69.3 times.
| Valuation Metric |
Hero Motors |
| FY2026 diluted EPS |
₹1.14 |
| FY2026 NAV per share |
₹12.72 |
| IPO price band |
₹79 to ₹84 |
| P/E at ₹79 |
~69.3x |
| P/E at ₹84 |
~73.7x |
| FY2026 RoNW |
8.53% |
The valuation needs to be viewed alongside the company's profitability. FY2026 RoNW was 8.53%, while PAT margin stood at 3.46%.
The RHP identifies CIE Automotive India, Endurance Technologies and Sona BLW Precision Forgings as listed industry peers. Based on the RHP's reference date of September 7, 2026, their P/E ratios ranged from 17.68 times for CIE Automotive India to 40.84 times for Endurance Technologies and 76.50 times for Sona BLW Precision Forgings.
The disclosed peer-group average P/E was 50.20 times.
Therefore, at the upper price band of ₹84, Hero Motors' implied P/E of approximately 73.7 times is above the disclosed industry-peer average of 50.20 times.
This means the IPO valuation places considerable importance on future earnings growth. Investors need to assess whether the company's expected growth in powertrain, EV-related products, capacity and profitability can support the valuation.
Hero Motors IPO Valuation vs Peers
Hero Motors IPO is priced at a relatively high valuation compared with the average P/E multiple of its listed peers. At the upper price band of ₹84, Hero Motors is valued at around 73.7 times its FY2026 diluted EPS of ₹1.14.
| Company |
P/E Ratio |
| CIE Automotive India |
17.68x |
| Endurance Technologies |
40.84x |
| Sona BLW Precision Forgings |
76.50x |
| Peer Average |
50.20x |
| Hero Motors at ₹84 |
73.7x |
At ₹79, Hero Motors' implied P/E is around 69.3x, while at ₹84 it rises to approximately 73.7x. Both are above the peer average of 50.20x. While Sona BLW Precision Forgings has a higher P/E of 76.50x, CIE Automotive India and Endurance Technologies trade at considerably lower multiples.
This suggests that Hero Motors' IPO valuation already reflects a significant level of future growth. Investors may therefore need to assess whether the company's expected growth in EV powertrain solutions, international business and capacity can support the premium valuation.
Want to benchmark Hero Motors against other recent market listings? Use the IPO dashboard to compare issue pricing, valuation trends and key offer parameters across different sectors.
Hero Motors has several potential growth drivers, including its Powertrain Solutions business, increasing EV-related revenue, international customers, long-standing OEM relationships, planned capacity expansion and investment in technology and R&D.
Growing EV Powertrain Exposure
Hero Motors has increased its exposure to EV-related products.
Revenue from EV gears and transmission products increased from ₹25.90 crore in FY2024 to ₹119.81 crore in FY2026.
The company is also developing integrated electric powertrain products, electric motors, drive units and transmission systems.
The increasing contribution from EV-related products is therefore an important part of the company's powertrain growth strategy.
International Customer Base
International customers contributed 41.36% of Hero Motors' revenue from operations in FY2026, while domestic customers contributed 58.64%.
The geographical mix gives Hero Motors exposure to international automotive and mobility markets alongside its domestic business.
The company serves OEMs across India, the United States, Europe and the ASEAN region.
Long-Term Customer Relationships
Hero Motors states that the average tenure of its relationships with its top five customers was more than 12 years as of March 31, 2026.
Long-standing relationships with OEM customers can provide business visibility. However, these relationships do not eliminate the risk arising from customer concentration, as a relatively small number of customers still account for a significant portion of revenue.
Capacity Expansion
Hero Motors plans to use ₹200 crore from the fresh issue for equipment required to expand capacity at its Gautam Buddha Nagar facility.
Additional capacity could support higher customer volumes if it is effectively utilised. Investors should therefore track capacity utilisation and incremental revenue after the expansion.
Technology and R&D
Hero Motors spent ₹89.59 crore on research and development in FY2026, equivalent to 7.54% of revenue from operations.
The company is positioning itself around powertrain technology, e-mobility and engineering capabilities rather than only conventional component manufacturing.
Its ability to develop products aligned with changing automotive technology will remain relevant to its future growth.
The Hero Motors IPO carries several risks that investors should evaluate alongside the company's growth opportunities. These include high customer concentration, losses at subsidiaries, automotive industry cyclicality, technology risks, working-capital requirements, debt and valuation risk.
High Customer Concentration
Customer concentration is one of the most significant risks disclosed in the RHP.
In FY2026, the top 10 customers accounted for 72.89% of revenue from operations. The top five customers contributed 61.42%, while the largest customer alone accounted for 35.57%.
This means a substantial portion of Hero Motors' revenue depends on a relatively small number of customers.
The company did not lose any of its top 10 customers during the three fiscal years covered by the RHP. However, a loss of business, reduction in orders or changes in production schedules from a major customer could materially affect revenue and profitability.
Subsidiary Losses
Several Hero Motors subsidiaries reported losses in FY2026.
| Subsidiary |
FY2026 Loss |
| Hero Motors Thai Limited |
₹6.67 crore |
| HYM Drive Systems Private Limited |
₹4.91 crore |
| Spur Technologies |
₹1.69 crore |
| Hero EDU Systems |
₹4.74 crore |
| Hewland Engineering |
₹3.74 crore |
| Munjal STP Industries |
₹0.15 crore |
Hero Motors had invested ₹125.88 crore in its subsidiaries as of March 31, 2026.
Continued losses at subsidiaries could require additional capital infusion by the parent company and may affect consolidated profitability.
Automotive Industry Cyclicality
Hero Motors supplies products to automotive OEMs. Its performance is therefore linked to vehicle production, customer demand, production schedules and broader automotive industry conditions.
A slowdown in two-wheelers, passenger vehicles, commercial vehicles, performance automotive or other relevant markets could affect orders and revenue.
Technology Risk
Automotive technology is changing rapidly, particularly with the development of electrification, software integration and new powertrain architectures.
Hero Motors identifies the risk that it may not anticipate or respond quickly enough to changing technology and market trends.
If the company fails to develop competitive products, its ability to win or retain OEM programmes could be affected.
Working Capital Requirements
Hero Motors operates a capital-intensive manufacturing business, making working-capital management important.
Receivable days increased from 67 days in FY2024 to 78 days in FY2026, while inventory days stood at 64 days in FY2026.
Higher receivable requirements can tie up cash and increase working-capital funding requirements.
Investors should therefore track whether receivable and inventory days remain under control as the company grows.
Valuation Risk
Hero Motors IPO valuation is another key risk.
At the upper price band of ₹84, the IPO implies a P/E of approximately 73.7 times based on FY2026 diluted EPS of ₹1.14.
This is higher than the disclosed industry-peer average P/E of 50.20 times.
The valuation therefore places significant importance on future earnings growth. If earnings growth does not match the expectations reflected in the IPO price, valuation could become a concern for investors.
Hero Motors has several business strengths, including increasing powertrain contribution, EV exposure, international customers, improving EBITDA margins and planned capacity expansion. At the same time, the company faces concentration, debt, subsidiary and valuation risks.
| Strengths |
Risks |
| Growing Powertrain Solutions segment |
High dependence on top customers |
| Increasing EV-related revenue |
Several subsidiaries reported losses |
| International customer exposure |
Automotive industry cyclicality |
| Improving EBITDA margin |
High IPO valuation |
| Long-standing customer relationships |
Significant debt and working-capital requirements |
| R&D and engineering capabilities |
Technology and product-development risk |
| IPO proceeds partly used for debt reduction |
Unidentified acquisitions carry execution risk |
| Capacity expansion planned |
Low FY2026 PAT margin |
The balance between these factors is important when evaluating the Hero Motors IPO. Improving operating performance provides a positive factor, but the current valuation and customer concentration increase the level of risk investors need to consider.
Hero Motors IPO presents a mixed investment case. The company has shown improvement in operating profitability, an increasing contribution from Powertrain Solutions, growth in EV-related revenue and a presence across international markets. However, its valuation, customer concentration and subsidiary losses remain key concerns.
Hero Motors' EBITDA margin improved from 8.11% in FY2024 to 12.44% in FY2026, while Powertrain Solutions' contribution to revenue increased from 48.88% to 53.67%. Revenue from EV gears and transmissions also increased from ₹25.90 crore in FY2024 to ₹119.81 crore in FY2026.
At the upper price band of ₹84, the IPO implies a P/E of around 73.7x based on FY2026 diluted EPS of ₹1.14. This is above the listed peer average of 50.20x. The company's FY2026 PAT margin was 3.46%, while RoNW stood at 8.53%.
Customer concentration is another consideration, with the top 10 customers contributing 72.89% of revenue and the largest customer accounting for 35.57%. Several subsidiaries also reported losses in FY2026.
Overall, Hero Motors IPO offers exposure to EV powertrain solutions, international customers and capacity expansion, but the valuation leaves limited room for execution risks. Investors should assess whether future earnings growth can justify the IPO valuation, along with the company's ability to reduce customer concentration, improve subsidiary performance, manage debt and utilise its expanded capacity effectively.
The post-listing performance of Hero Motors can be assessed through several operating and financial indicators.
-
Revenue growth: Whether the acceleration seen in FY2026 continues.
-
Powertrain contribution: Whether Powertrain Solutions continues to increase its share of revenue.
-
EV revenue: Whether EV-related products become a larger contributor to overall revenue.
-
EBITDA margin: Whether the improvement from 8.11% in FY2024 to 12.44% in FY2026 is sustained.
-
PAT margin: Whether net profitability improves beyond the FY2026 level of 3.46%.
-
Customer concentration: Whether dependence on the top 10 customers decreases.
-
Debt reduction: Whether the planned ₹190 crore debt repayment leads to lower borrowings and finance costs.
-
Capacity utilisation: Whether the new Gautam Buddha Nagar capacity generates sufficient incremental revenue.
-
Subsidiary performance: Whether loss-making subsidiaries move towards profitability.
-
Cash flow: Whether accounting profits translate into stronger operating cash generation.
-
Working capital: Whether receivable and inventory days remain under control.
-
Valuation: Whether earnings growth catches up with the high IPO valuation.
These indicators can help investors assess whether the operating performance after the IPO is developing in line with the factors reflected in the issue valuation.
Hero Motors IPO combines improving operating performance with a demanding valuation. The company reported FY2026 revenue of ₹1,188.35 crore and PAT of ₹41.17 crore, while its EBITDA margin improved to 12.44%.
Growth in EV-related revenue, a higher contribution from Powertrain Solutions, international customers and planned capacity expansion are key positives. However, customer concentration, subsidiary losses and an implied P/E of around 69.3x to 73.7x at the IPO price band remain important concerns.
The key consideration for investors is whether Hero Motors can deliver sufficient future earnings growth to support its IPO valuation while improving customer diversification, subsidiary profitability, debt levels and capacity utilisation.
Hero Motors IPO offers exposure to an automotive technology business with a growing Powertrain Solutions segment, increasing EV exposure, international customers and improving operating margins.
The company plans to use ₹200 crore of fresh issue proceeds for capacity expansion at its Gautam Buddha Nagar facility and ₹190 crore for repayment, prepayment or redemption of borrowings. These uses could support capacity growth and balance-sheet improvement.
At the same time, the IPO carries material risks. Customer concentration remains high, several subsidiaries reported losses in FY2026, working-capital requirements are significant and the IPO valuation is high relative to current earnings.
At the upper price band of ₹84, the issue implies a P/E of approximately 73.7 times FY2026 diluted EPS, compared with the 50.20-times average P/E of the listed peer group disclosed in the RHP.
The attractiveness of Hero Motors IPO therefore depends heavily on the company's ability to deliver future earnings growth that supports the valuation. Investors should closely monitor EV and powertrain growth, customer diversification, capacity utilisation, subsidiary profitability, debt reduction and the efficiency with which the IPO proceeds are deployed.
1. What is the price band of Hero Motors IPO?
The Hero Motors IPO price band is fixed at ₹79 to ₹84 per share. The issue size is ₹1,000 crore, comprising a ₹600 crore fresh issue and a ₹400 crore offer for sale.
2. When will Hero Motors IPO open and close?
Hero Motors IPO will open for subscription on 16 September 2026 and close on 18 September 2026. Anchor bidding will take place on 15 September 2026.
3. What is the valuation of Hero Motors IPO?
At ₹79 per share, Hero Motors IPO implies a P/E of around 69.3x based on FY2026 diluted EPS of ₹1.14. At ₹84 per share, the implied P/E is approximately 73.7x, compared with a peer average of 50.20x.
4. What are the key risks of Hero Motors IPO?
The key risks include high customer concentration, subsidiary losses, dependence on the automotive industry, technology and product development risks, working capital requirements, debt levels, and the relatively high IPO valuation.
5. Should you apply for Hero Motors IPO?
Hero Motors IPO presents both growth opportunities and risks. Its improving margins, EV powertrain business, international customer base and planned capacity expansion are positives. However, the high valuation, customer concentration and subsidiary losses require careful consideration. Investors should assess whether the company's future earnings growth can justify the IPO valuation before making an investment decision.