Hero Motors Limited

Red Herring Prospectus dated 9 September 2026

Summary

Hero Motors Limited is proposing to raise ₹1,000.00 crore through the IPO: ₹600.00 crore from a fresh issue of shares and ₹400.00 crore through an offer for sale by existing shareholders. The document does not yet state the price.

About 33% of the fresh issue proceeds go to capital expenditure of the company through purchase of equipment required for expansion in capacity of its Gautam Buddha Nagar, Uttar Pradesh facility, and about 32% to repayment/prepayment/redemption, in full or in part, of certain outstanding borrowings availed by the company. The amount for funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes is not yet stated.

The review found 7 points to read closely and 15 worth checking.

Read closely

1. Criminal proceedings against the company, its directors or individual promoters
2. Finance and compliance heads are new or have turned over
3. Past regulatory actions against the company or its directors
4. A large object depends on a single vendor's quotation
5. Physical capital expenditure rests on quotations with no orders placed
6. Other income is material to profit
7. Licences and approvals pending, expired or not renewed

How the capital was built

• The last priced issue of shares was on 23 Nov 2010: 44,75,000 shares to the promoter group at ₹80 each (1 allottee, including people linked to the promoters); it came about 16 years before this prospectus.

Conclusion

Of the 7 points to read closely, 3 concern the promoters, management and their dealings (criminal proceedings against the company, its directors or individual promoters; finance and compliance heads are new or have turned over; past regulatory actions against the company or its directors), 2 concern how the IPO money will be spent, 1 concerns the financial statements and 1 concerns the business, the valuation or the quality of disclosure. These could not be scored automatically and need reading: group entities in the same business; contingent liabilities; guarantees given for group entities. These wait for the price and the final share count: shares issued shortly before the IPO at a deep discount to the issue price; low promoter holding after the issue; issue price is a large multiple of promoters' cost. The pages to read are 43, 115, 333, 335 and 479.