Hero Motors IPO subscribed 3.37 times on Day 2; retail portion subscribed over 5 times

The initial public offering (IPO) of Hero Motors Ltd was subscribed 3.37 times on the second day of bidding on Thursday, according to data available on the stock exchanges. The issue opened for subscription on September 16 and will close on Friday, September 18.

The IPO received bids for 29,81,70,648 equity shares against the 8,86,07,596 shares on offer.

The retailers' portion was subscribed 5.02 times, while the non-institutional investors' (NIIs) quota was subscribed 3.9 times. The qualified institutional buyers' (QIBs) segment saw a subscription of 0.07 times.

Brokerage views

Brokerages including Anand Rathi, BP Wealth and Ventura Securities have recommended subscribing to the IPO.

Anand Rathi said Hero Motors is an India-based automotive technology company engaged in designing, developing, manufacturing and supplying highly engineered powertrain solutions to automotive original equipment manufacturers (OEMs) across the US, Europe, India and ASEAN.

At the upper end of the IPO price band, the brokerage said the company is valued at a price-to-earnings (P/E) multiple of 92.6 times and an enterprise value-to-EBITDA (EV/EBITDA) multiple of 34.38 times based on FY26 earnings. It has recommended "Subscribe - Long Term".

BP Wealth said the company primarily operates as a B2B supplier to OEMs, with capabilities across the powertrain value chain, including design, development, prototyping, validation and manufacturing.

At the upper price band, BP Wealth said the stock is valued at a P/E multiple of 73.7 times FY26 earnings, based on diluted earnings per share (EPS) of Rs 1.1. The brokerage has recommended 'SUBSCRIBE', citing the company's expanding e-mobility portfolio, global OEM relationships, investments in technology and manufacturing capabilities, and improvement in profitability.

IPO details

Hero Motors has fixed a price band of Rs 79-84 per equity share, with a face value of Rs 10 per share. The minimum bid is 178 equity shares and in multiples of 178 shares thereafter.

The IPO comprises a fresh issue of up to Rs 600 crore and an offer for sale (OFS) of equity shares worth up to Rs 400 crore by promoters O P Munjal Holdings and Hero Cycles Limited.

Of the fresh issue proceeds, Rs 190 crore will be used for repayment, prepayment or redemption of certain outstanding borrowings. Another Rs 200 crore will be used for capital expenditure, including equipment required for capacity expansion at the company's Gautam Buddha Nagar, Uttar Pradesh facility.

The company will also use the proceeds for inorganic growth through unidentified acquisitions and other strategic initiatives, as well as general corporate purposes.