Is Hero Motors IPO Good or Bad – Detailed Review

Hero Motors Limited’s IPO is set to open its initial public offering from September 16, 2026, to September 18, 2026. When considering applying for this IPO, potential investors might have questions about whether the Hero Motors IPO is a good investment and if it's worth subscribing to.

This article provides a comprehensive analysis of the Hero Motors IPO, covering its business operations and a fundamental analysis of its RHP to help you make an informed investment decision.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.

Hero Motors IPO Review

Hero Motors Limited's IPO is open for subscription from September 16, 2026, to September 18, 2026, with the company proposing to list its equity shares on NSE and BSE.

They bring over two decades of precision automotive engineering heritage as part of the renowned HMC Group led by Chairman Pankaj Munjal.

Headquartered in Ludhiana, Punjab, with its corporate office in Noida, the company operates an international footprint spanning six manufacturing facilities (4 in India, 1 in the UK, and 1 in Thailand) alongside 2 specialized technology and R&D centers in Southam (UK) and Gautam Buddha Nagar (India).

The company operates across two core business segments:

• Powertrain Solutions (53.67% of FY26 Revenue)

• Alloys & Metallics (46.33% of FY26 Revenue)

Consolidated revenue from operations grew from Rs 1,064.39 crore in FY24 to Rs 1,089.59 crore in FY25 and reached Rs 1,188.35 crore in FY26 (5.66% CAGR).

Profit After Tax (PAT) stood at Rs 17.04 crore in FY24, Rs 32.80 crore in FY25, and surged to Rs 41.17 crore in FY26 (55.46% CAGR).

Operating margins have witnessed consistent strength, with EBITDA margins standing at 8.11% in FY24, 10.46% in FY25, and 12.44% in FY26.

Key strengths include a high-moat global e-mobility presence as the sole Indian exporter of CVT  (Continuously Variable Transmission) hubs to e-bike OEMs, Tier-1 partnerships with marquee brands (BMW AG, Ducati, enviolo, Yamaha), full-stack R&D and co-engineering capabilities via UK-based Hewland Engineering, and expanding EV portfolio.

Main risks include severe customer concentration (top 10 customers contribute 72.89%, and the largest client accounts for 35.57%), losses and low capacity utilization in newer operating subsidiaries, pending intellectual property and trademark litigation regarding the 'HERO' brand, raw material price volatility (steel and alloy blanks), and substantial working capital leverage.

The IPO consists of a fresh issue of up to Rs 600 crore and an offer for sale valued at Rs 400 crore.

Shares are priced in the Hero Motors IPO price band of Rs 79 to Rs 84 per share, with a minimum lot size of 178 shares.

Company Overview of Hero Motors IPO

Hero Motors has evolved from a basic build-to-print parts maker into a full-service co-engineering partner. 

It assists clients from early design and computer simulation to prototyping, testing, and high-volume serial production.

The company’s operations are built on two divisons:

• Powertrain Solutions: It Includes Gears & Transmissions (G&T) and Bike Powertrain (BPT).

- G&T manufactures manual, automatic, and EV transmissions for performance cars and luxury motorcycles through UK-based Hewland Engineering. 

- BPT manufactures stepless CVT hubs with enviolo, hub motors through a joint venture with Yamaha (HYM Drive Systems), and complete electric drive units under the 'ESYNC' brand.

• Alloys & Metallics (A&M): Produces structural parts such as swing arms, chassis frames, engine guards, and cycle rims. It is expanding into precision steel forgings through Munjal STP Industries, a joint venture with Germany’s STP Group.

As of March 31, 2026, Hero Motors produced over 27.41 million parts annually and employed 1,388 permanent staff, including 84 dedicated R&D engineers. International sales across 23 countries made up 41.36% of total revenue, with Europe being the largest overseas market at 33.59%.

Longstanding customer partnerships provide high revenue visibility, with the average relationship tenure across its top five customers exceeding 12 years.

Industry Overview of Hero Motors IPO

The global and domestic automotive and personal micro-mobility sectors are experiencing multi-year tailwinds driven by rapid powertrain electrification, premiumization across two-wheelers, and expanding adoption of electric bicycles across urban centers.

Source: CRISIL Intelligence Report included in the Hero Motors Limited RHP.

• Low Noise Needs in EVs: Electric motors are silent, so gears must meet strict tolerance levels to minimize vibration and gear whine, increasing part values.

• Rising E-Bike Demand: European e-bike demand is projected to hit 8 to 10 million units by 2031, with internal gearboxes and CVT hubs replacing traditional chain derailleurs.

• Premium Bikes in India: Motorcycles above 110cc expanded their market share from 46.3% in FY21 to 54.8% in FY26, supporting demand for multi-speed transmissions and alloy frames.

Financial Overview of Hero Motors IPO

Note: Financial figures are derived from the Restated Consolidated Financial Information in the Hero Motors Limited RHP.

• Revenue from Operations: Revenue stood at Rs 1,064.39 crore in FY24, grew to Rs 1,089.59 crore in FY25, and reached Rs 1,188.35 crore in FY26, driven by a 19.37% YoY surge in the Powertrain Solutions segment during FY26 as EV drivetrain adoption accelerated.

• Operating EBITDA Margin: Operating EBITDA margin expanded steadily from 8.11% in FY24 to 10.46% in FY25, and reached 12.44% in FY26, aided by raw material procurement efficiencies, higher share of high-margin EV powertrains, and operating leverage.

• Profit After Tax (PAT): PAT increased from Rs 17.04 crore in FY24 to Rs 32.80 crore in FY25 and reached Rs 41.17 crore in FY26 (delivering a 55.46% 2-year CAGR). Net profit reflects pre-tax non-cash ESOP charges of Rs 10.50 crore in FY26, Rs 14.82 crore in FY25, and Rs 39.46 crore in FY24.

• Return Metrics: Hero Motors delivered improving capital efficiency, with reported RoE expanding from 4.54% in FY24 to 8.56% in FY26, while RoCE stood at a strong 19.77% in FY26.

Strengths and Risks of Hero Motors IPO

Let's examine the strengths and weaknesses to determine whether the Hero Motors IPO is good or bad for investors.

Strengths

• Global E-Mobility Pioneer: India's sole exporter of e-bike CVT hubs. E-mobility revenue expanded to Rs 273.29 crore (23% of FY26 revenue) from Rs 128.09 crore in FY24.

• Marquee OEM Partnerships: Longstanding supply ties with BMW, Ducati, enviolo, and Hero MotoCorp; top 5 customer tenure averages over 12 years with rigorous 14–33 month qualification barriers.

• High-Tech R&D & Co-Engineering: In-house UK/India tech centers and Hewland enable end-to-end "concept-to-validation" capabilities; FY26 R&D spend was Rs 89.59 crore (7.54% of revenue).

• Geographically Balanced Footprint: International exports contribute 41.36% (Europe 33.59%) and domestic sales 58.64% of FY26 revenue, effectively hedging regional downturns.

• Institutional Governance: Led by HMC Group promoters with institutional governance backing from marquee ESG investor South Asia Growth Invest (GEF Capital).

Risks

• Severe Customer Concentration: Top 10 customers accounted for 72.89% of FY26 revenue; single largest customer alone contributed 35.57% (Rs 422.74 crore).

• Subsidiary Losses & Low Utilization: Key operating subsidiaries incurred FY26 net losses (Thai: Rs 6.67 Cr; HYM: Rs 4.91 Cr; Hero EDU: Rs 4.74 Cr), with plant utilization at HYM (14.56%) and Thailand (3.87%) remaining subdued.

• Working Capital Debt & Interest Burden: Consolidated debt stood at Rs 400.79 crore (Net Debt/Adjusted EBITDA of 2.24x) as of FY26, with annual finance costs absorbing Rs 40.84 crore.

• Brand Ownership & Trademark Litigation: Continued use of the 'Hero' brand requires the promoter family to hold at least 26%; related trademark and monogram disputes remain pending before courts.

• Raw Material Price Volatility: Material inputs comprised 54.99% of FY26 revenue; lag in contractual price pass-throughs for steel and alloy blanks can compress operating margins.

Strategies of Hero Motors IPO

• Complete Systems and Powertrain Solutions for E-Mobility: Expand high-performance EV gearboxes, e-transmissions, and complete 'ESYNC' electric drive units (motor, battery, controller) to increase vehicle content value.

• Expansion into New Segments and Geographies: Diversify beyond two-wheelers into hybrid passenger cars, eVTOL, marine, and lawnmowers, while ramping up the Thailand facility to capture ASEAN demand.

• Leveraging Hewland’s Design-to-Cost Expertise: Utilize UK and Indian technology centers to deliver end-to-end design, simulation, and testing services, monetizing high-margin engineering consultancy.

• Strengthening Strategic Global Technology Partnerships: Deepen technology collaborations with enviolo for economical CVT hubs, Yamaha Motor for e-bike hub motors, and European partners for DCT systems.

• Pursuing Targeted Inorganic Growth Opportunities: Selectively evaluate acquisitions and strategic parterships across precision forging, gearing, and motor control software to expand customer reach and technical capabilities.

Hero Motors IPO vs. Peers

Hero Motors competes with specialized precision automotive component and powertrain manufacturers. Benchmarking against listed industry peers provides context for FY26:

Note: Source: Hero Motors Limited RHP. Peer figures are consolidated FY26 data.

Objectives of Hero Motors IPO

Hero Motors' IPO consists of a fresh issue of up to Rs 600 crore and an offer for sale (OFS) valued at up to Rs 400 crore.

The net proceeds from the Fresh Issue are proposed to be utilized as follows:

• Repayment/prepayment, in full or in part, of certain borrowings: Rs 190 crore

• Capital expenditure for capacity expansion at Gautam Buddha Nagar facility: Rs 200 crore

• Funding inorganic growth through unidentified acquisitions and general corporate purposes: (35% of gross proceeds).

Hero Motors IPO Details

IPO Dates

Hero Motors IPO will be open for subscription from September 16, 2026, to September 18, 2026. The allotment of shares to investors will take place on September 21, 2026, and the company is expected to be listed on the NSE and BSE on September 23, 2026.

IPO Issue Price

Hero Motors is offering its shares in the price band of Rs 79 to Rs 84 per share. This means you would require an investment of Rs 14,952 per lot (178 shares) if you are bidding for the IPO at the upper price band.

IPO Size

Hero Motors is launching a total issue of Rs 1,000 crore, comprising a fresh issue of up to Rs 600 crore, with an offer for sale of up to Rs 400 crore.

IPO Allotment Status

Investors who applied for the IPO can check their IPO allotment status on September 21, 2026, through the registrar's website, Kfin Technologies Limited, BSE, NSE, or a stockbroker platform.

IPO Listing Date

The shares of Hero Motors are expected to be listed on the NSE and BSE on September 23, 2026.

IPO Application Link

Open demat account with Rupeezy today and enjoy a seamless experience when applying for the IPO. With an easy-to-use platform, Rupeezy makes the IPO application process quick and hassle-free.

Apply for Hero Motors IPO