Hero Motors Charts IPO Growth Roadmap, ₹1,000-Crore Issue To Fund Debt Reduction And Expansion

Mumbai: Hero Motors Limited plans to use its public issue to cut debt, expand capacity and pursue new opportunities as the automotive company prepares for its next growth phase.

In an exclusive interview with Shipra Rana - The Free Press Journal, Chairman Pankaj M. Munjal and Managing Director and Chief Executive Officer Amit Gupta discussed the company’s strategy, electric mobility plans and international ambitions.

How funds will be used?

The Rs 1,000-crore IPO comprises a Rs 600-crore fresh issue and a Rs 400-crore offer for sale. The company plans to allocate about Rs 190 crore towards debt reduction, Rs 200 crore for capital expenditure and nearly Rs 200 crore for general corporate purposes, including acquisitions and emerging opportunities.

Management said lower debt and fresh investment would give Hero Motors flexibility to accelerate development and build capacity.

Technology drives expansion

Hero Motors operates technology centres in India and the UK. Its UK centre focuses on gears and transmission systems for automotive, aviation, marine and performance vehicles, while the Indian centre develops products for two-wheelers, electric bikes, three-wheelers and micromobility.

The company has designed and validated transmission systems for all-terrain vehicles, lawnmowers and aviation applications. Several projects have reached advanced stages and are expected to begin contributing to revenue.

EV opportunity expands

Electric mobility is central to the growth strategy. Hero Motors develops integrated electric drive units covering motors, gearboxes, axles, batteries and sensors. EV products contributed about 40 percent–45 percent of its bike powertrain business last year, according to management.

Around 60 percent–70 percent of its current development focus spans electric two-wheelers, three-wheelers, marine, aviation and performance automotive applications.

Long contracts limit risks

Hero Motors spends 7 percent of revenue on design, development and research. Management said its customer base has expanded from four or five companies five years ago to around 10–20 customers.

Orders typically run for eight to 10 years, offering revenue visibility. The company now plans to follow customers across India and overseas while maintaining investment discipline and improving utilisation at subsidiaries.