Hero Motors Limited
Munjal-family powertrain systems supplier — listed on NSE and BSE on September 23, 2026; opened below the issue price before moving to the upper circuit
Hero Motors is not a venture-style company built around a single founder. It is a multi-generational auto-components franchise of the Munjal family, whose group traces to Hero Cycles in 1956. Per Economic Times reporting, the company’s own lineage begins in 1987 as a division of Majestic Auto Limited, formed in collaboration with Austria’s Steyr Daimler Puch. Two court-approved reorganizations (2015 and 2022) produced the current ownership structure. In our assessment, this section is therefore best read through the lens of family governance and succession continuity rather than a founder narrative.
Son of the late O.P. Munjal. Trained in automotive manufacturing at Kettering University (formerly GM Institute) and completed executive programs at London Business School and Harvard. Per public profiles (secondary sources), he joined Hero Cycles in 1988, drove the Hero Puch moped launch, and became Chairman and MD of Hero Motors in July 2015. The RHP lists him as Non-Executive, Non-Independent Chairman.
Third-generation executive serving as whole-time director and disclosed as a promoter. We were unable to verify detailed career history from primary sources within the scope of this research; in our assessment he represents the operating-side succession axis.
O P Munjal Holdings is the family partnership, with Pankaj Munjal (80%) and Charu Munjal (20%) as partners. It is selling ₹395cr of the ₹400cr offer for sale. Per the RHP cover page as cited in secondary analysis, its weighted average cost of acquisition is roughly ₹0.03 per share.
Held 97.58% of Hero Motors before the 2022 scheme of arrangement. It is selling approximately ₹5cr in the OFS. Related-party transactions in FY26 are disclosed at roughly 1–2% of revenue.
• Ticker: The “HERT.NS” symbol supplied in the request could not be confirmed against exchange or broker sources within our search scope. What we can verify is a simultaneous NSE and BSE listing; the symbol should be reconfirmed against exchange disclosure. This entity is distinct from Hero MotoCorp (HEROMOTOCO).
• Promoter holding: Promoters collectively held 73.46% on a fully diluted basis as of the RHP date (per Economic Times), versus 84.67% for promoter and promoter group combined (secondary analysis). We attribute this to definitional scope but have not resolved it. The roughly 61% post-issue holding follows the latter basis.
• Title: “Chairman and MD” (2015, public profile) differs from “Non-Executive Chairman” (Economic Times, per RHP); this may reflect a change over time.
Hero Motors is an engineered powertrain supplier to OEMs, not a vehicle maker. It designs, manufactures and delivers system- and component-level solutions for electric and non-electric applications to customers in the US, Europe, India and ASEAN. As of March 31, 2026, it operated six manufacturing facilities across India, the UK and Thailand (Business Standard).
Gears, gearboxes, electric motors and integrated drive units. The e-bike CVT hub and integrated electric powertrain are the core; per a company-commissioned CRISIL report, it is the only Indian exporter of CVT hubs (a self-reported claim). Named customers include BMW, Ducati, enviolo and Hero MotoCorp.
Sheet-metal and tubular components and assemblies, operating since 2001. This is the more commoditized half of the business, and its revenue appears to have declined modestly in FY26.
UK-based Hewland (motorsport transmissions, 51% subsidiary), a Thailand gearbox plant at Samut Prakan, a motor JV with Yamaha, and plants in Uttar Pradesh and Punjab. Revenue by region: India 58.6%, Europe 33.6%, US 3.9%.
Financial snapshot (secondary analysis of RHP financials): FY26 revenue of ₹1,188cr (+9.1%; two-year CAGR 5.7%), EBITDA of ₹148cr (margin up from 8.11% to 12.44%), PAT of ₹41cr (3.46% margin), borrowings of ₹401cr (₹302cr due within one year), and return on equity of 8.56%. In our assessment, margin expansion reflects a genuine mix shift toward powertrain and EV, but the improvement is large relative to top-line growth, and a decline in the FY24 share-based payment charge (₹39.5cr) accounts for a meaningful part of the profit increase.
FY26 revenue appears as ₹1,188cr (revenue from operations, most outlets) and ₹1,216.74cr (IPO Watch, likely total income); FY25 likewise shows ₹1,090cr versus ₹1,111.23cr. EBITDA margin is reported as 12.44% and 13.5% (likely an adjusted basis). This report standardizes on revenue from operations and reported EBITDA.
Within the scope we could verify, Hero Motors has no disclosed external VC or PE rounds. It is a family-controlled company whose growth capital appears to have come from retained earnings, borrowings, court-approved reorganizations and strategic JV and equity purchases. Per secondary analysis, the RHP records the weighted average cost of shares transacted by promoters and selling shareholders over the last one year, eighteen months and three years as NIL, so there is no pre-IPO price anchor. The nearest reference is an employee stock option exercise on September 4, 2026 at ₹69.14.
Joint-venture agreement with Yamaha for e-bike hub motors signed in 2021 (operational in 2022). In 2022, a 32% stake in UK-based Hewland Engineering was acquired. On November 4, 2022, the NCLT Chandigarh Bench approved the scheme of arrangement with Hero Cycles, transferring its auto-components business to Hero Motors.
An additional 19% of Hewland in 2023 made it a 51% subsidiary, and the Samut Prakan transmission plant in Thailand began operations. In 2025, a forging-components JV (Munjal STP Industries) was formed with the STP Group. The DRHP was filed with SEBI on June 30, 2025.
RHP dated September 9, anchor book September 15, bidding September 16–18, price band ₹79–84 with the issue price fixed at ₹84. Book-running lead managers: ICICI Securities, DAM Capital and JM Financial. Fresh proceeds are earmarked for ₹190cr of debt repayment and ₹200cr of equipment at the Uttar Pradesh plant, with the balance for unidentified acquisitions and general corporate purposes. Category subscription was QIB 1.49x, NII 9.86x and retail 8.23x, indicating comparatively soft institutional demand.
The stock opened at ₹82 on NSE (₹82.10 on BSE), in line with grey-market expectations, then reportedly hit the 20% upper circuit intraday (Business Standard). At that level market capitalization is approximately ₹4,469cr. We have not verified the final closing price.
• Composition: Fresh issue of 7.14 crore shares (₹600cr) plus an offer for sale of up to 4.76 crore shares (₹400cr; O P Munjal Holdings ₹395cr, Hero Cycles ₹5cr)
• Allocation: QIB 50% / NII 15% / Retail 35%; minimum lot of 178 shares (₹14,952)
• Valuation (secondary analysis): P/E of 73.7x on reported EPS at the issue price, about 88x on post-issue share count, versus a peer average of 50.2x
• Use of funds: The ₹400cr OFS does not reach the company; 40% of the issue is a promoter liquidity event
• Subscription: 6.66x (BSE data, final) and 7.01x (day-three intraday and some brokers) both circulate. We attribute the gap to differences in whether anchor allocation is included and use the final BSE figure.
• Anchor proceeds: ₹300cr (3.57 crore shares) versus ₹244.98cr (2.91 crore shares, 16 anchors) across outlets. We have not resolved this.
• DRHP versus RHP size: The 2025 DRHP was reported at ₹1,200cr (₹800cr fresh, ₹285cr debt repayment, ₹237cr equipment; single source), versus ₹1,000cr in the RHP. We could not confirm the reason for the reduction.
• Hewland timing: Some 2021 reports (The Statesman, Wikipedia) describe an initial stake in early 2021, while RHP-derived sources describe 32% in 2022 and 51% in 2023. Staged acquisition is possible, so we show both.
• Reuters source: The supplied link was blocked and the article body could not be read; only the URL headline (about $104M, weaker debut) was used. Direction is consistent with other outlets.
We locate Hero Motors’ competitive position in niche technology and customer stickiness rather than scale. Against its RHP peer set (Sona BLW, Endurance, UNO Minda, CIE Automotive India, Varroc), it is the smallest and most leveraged company, which is the central valuation question.
Per a company-commissioned CRISIL report, it is the only Indian exporter of e-bike CVT hubs and the only Indian maker of integrated electric powertrains for e-bikes. Independent verification is limited, so we treat this as directional support only.
Average tenure with the top five customers is reported at over 12 years. The top five customers account for 61.4% of revenue and the top ten for 72.9%, so lock-in and concentration risk coexist.
EBITDA margin improved by 433bp as EV revenue share rose from 12.0% to 23.0%. Several products (e.g., gears) are powertrain-neutral, which limits the firm’s exposure to the pace of electrification.
Hewland’s design and test capability supports a shift from make-to-print supplier to systems provider. However, Hewland’s FY26 revenue reportedly fell from ₹160.5cr to ₹134.9cr with a swing to a loss, which requires verification.
(1) Cumulative three-year free cash flow of roughly -₹53cr; about ₹96cr of FY26’s ₹144cr operating cash flow stems from higher factoring balances (secondary analysis). (2) Low utilization: Thailand 3.9%, Yamaha JV 14.6%, UK 24.2%. (3) A criminal complaint by the UP Pollution Control Board and the liquidation of promoter-group entity Nipman Fastener (cited from the RHP). (4) A high multiple against a 5.7% revenue CAGR.
(1) 60% of proceeds reach the company, with ₹190cr for debt repayment. (2) The Uttar Pradesh plant runs at 88.3% utilization, supporting the ₹200cr expansion. (3) Strong forecast growth in electric-drive motors (Master Capital Services cites a 28–32% CAGR through CY31). (4) The listing-day rebound suggests a functioning bid from institutional and retail flows.
Assessment: We view the quality of the margin improvement and the niche technology position favorably. However, a post-issue P/E of roughly 88x and ROE of 8.56% offer limited support for a premium to peers. The upper-circuit move on day one is likely flow-driven, and we would monitor cash conversion, customer concentration and overseas utilization in subsequent quarterly results.