Is Hero Motors’ Profit Decline a Cause for Concern?
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Synopsis
Hero Motors is facing significant challenges as its profits slump drastically. With an updated IPO on the horizon, investors are left wondering about the company's future. Can they rebound from this downturn? Read on for an in-depth analysis of their financial state and IPO strategy.
Key Takeaways
- Hero Motors' profit has declined by 60%.
- The company aims to raise Rs 1,200 crore through its IPO.
- Net revenue increased marginally to Rs 1,083.41 crore.
- Shares will be listed on NSE and BSE.
- The IPO includes both fresh shares and an offer for sale.
Mumbai, July 10 (NationPress) Hero Motors Limited (HML) has recently uploaded its updated IPO document on the capital market regulator SEBI’s official site. As per the document, the company's profit has dropped by approximately 60%, amounting to Rs 17.03 crore for the fiscal year ending March 31, 2024, down from Rs 40.50 crore in the previous fiscal year (FY23).
The company is targeting to raise Rs 1,200 crore by issuing equity shares at a face value of Rs 10 each, an increase from the Rs 900 crore initially proposed in its earlier filing.
Originally, the company had filed its Draft Red Herring Prospectus (DRHP) in August of last year but later retracted the application.
The updated IPO document indicates that the profit for the nine months of FY25, ending December 2024, was Rs 22.39 crore.
On the revenue front, net revenue (which includes revenue from operations plus other income) rose slightly to Rs 1,083.41 crore in FY24, compared to Rs 1,069.9 crore in FY23. For the nine months of FY25, the net revenue stood at Rs 823.8 crore.
The public offering comprises both fresh shares and an offer for sale, with the company issuing fresh shares worth Rs 800 crore while promoters will offload stakes valued at Rs 400 crore.
Among those in the promoter group selling stakes are OP Munjak Holdings, Bhagyoday Investment, and Hero Cycles.
The company plans to list its shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Leading the book-running management of the offering are ICICI Securities, DAM Capital Advisors, and JM Financials, with KFin Tech serving as the registrar for the IPO.
Hero Motors was founded as ‘Hero Briggs and Stratton Auto Private Limited’ under the Companies Act, 1956, on April 30, 1998. It was later renamed to ‘Hero Briggs & Stratton Auto Limited’ on August 25, 1998, after becoming a deemed public company.
Point of View
The financial struggles of Hero Motors highlight a broader trend in the market. Despite a notable decline in profits, the company's strategy to raise funds through an IPO is a bold move. It will be crucial for investors to assess the potential risks versus rewards, especially in the current economic climate. NationPress believes in providing transparent coverage to help audiences make informed decisions.
NationPress
15/08/2025
Frequently Asked Questions
What led to the decline in Hero Motors' profits?
The decline in profits can be attributed to various market conditions and operational challenges faced by the company in the fiscal year.
How much is Hero Motors aiming to raise through its IPO?
Hero Motors is looking to raise Rs 1,200 crore through the sale of equity shares.
When was Hero Motors founded?
Hero Motors was incorporated on April 30, 1998.
Where will Hero Motors' shares be listed?
The shares are set to be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Who are the lead managers for the IPO?
The book-running lead managers for the IPO include ICICI Securities, DAM Capital Advisors, and JM Financials.
