The big listing this morning – Hero Motors made a quiet debut on D’Street today. It listed at Rs 82 per share. This is nearly 2.38% discount to the the issue price. The issue price was fixed at Rs 84 per share for the Rs 1,000 crore issue.
The Hero Motors IPO was subscribed 7.01 times overall, with the retail category seeing 8.62 times subscription. The QIB section was subscribed 1.59 times, and the NII category saw 10.47 times subscription. The issue was a mix of OFS and fresh issuance.
Hero Motors: Business fundamentals
Hero Motors is an automotive technology company engaged in designing, developing, manufacturing and supplying highly
engineered powertrain solutions to automotive original equipment manufacturers (OEMs) across the United States, Europe, India and ASEAN.
The company offers integrated system-level and component-level solutions covering both electric and non-electric powertrains, with applications across two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and electric vertical take-off and landing (eVTOL) platforms.
The company boasts of several marquee names in its customer base including BMW, Ducati, enviolo, Formula Motorsport, Hummingbird EV and HWA, along with leading global e-bike manufacturers. The company focuses on high-performance and premium powertrain applications requiring high torque handling and lightweight components.
Hero Motors: Expert take
The Hero Motors issue did not just see string participation from retail segment but also from market observers. Anand Rathi rated the issue ‘Subscribe for long-term’ and highlighted that the “company benefits from design, engineering, prototyping, validation and manufacturing capabilities, enabling it to provide system-level and component-level solutions to automotive OEMs.”
According to them, its portfolio includes CVTs, EV transmissions, electric motors, drive units and gear sets, providing exposure to ICE, performance automotive and electric mobility segments. The company holds a position in the e-bike powertrain market, being the only player manufacturing and exporting CVT hubs to e-bike OEMs from India.
They believe that “its investment in Hewland has strengthened transmission design and prototyping capabilities, while its Yamaha Motors Japan joint venture supports electric motor capabilities. With facilities across India, the UK and Thailand, Hero Motors has a global footprint.”