Hero Motors Raises Rs 300 Cr From Anchor Investors Ahead Of IPO

Hero Motors, the automotive technology arm of the Hero Group, has raised Rs 299.99 crore from anchor investors a day before its initial public offering opened for public subscription on September 16.

The Anchor Round

The company allotted 3,57,14,284 equity shares to 24 anchor investors at Rs 84 apiece, the upper end of its IPO price band. Anchor investors are institutional buyers who commit to a chunk of shares one day before an IPO opens, a mechanism regulators use to signal institutional confidence to retail investors before the wider issue goes live.

Domestic mutual funds dominated the anchor book. Seven mutual fund houses, spread across 16 separate schemes, picked up 2,91,64,441 shares, or roughly 81.7% of the total anchor allocation, worth close to Rs 245 crore. Participating schemes included ICICI Prudential Smallcap Fund, Kotak Mahindra Trustee Company’s Kotak MNC Fund, and JM Financial Mutual Fund’s JM Flexi Cap Fund, among others.

The remaining allocation went to insurers and other institutional investors, including ICICI Prudential Life Insurance Company, Edelweiss Life Insurance Company, Societe Generale under an offshore derivative instrument structure, ASAS Global Fund Incorporated VCC Sub Fund, and 3P India Equity Fund, the vehicle run by veteran fund manager Prashant Jain. The two life insurers together picked up 23,81,640 shares, about 6.67% of the anchor portion.

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The Wider IPO

The anchor allocation sits inside a larger Rs 1,000 crore initial public offering, priced in a band of Rs 79 to Rs 84 per share, that opened for public subscription on September 16 and closes on September 18. The issue combines a fresh issue of up to Rs 600 crore with an offer for sale of up to Rs 400 crore by promoter entities O P Munjal Holdings and Hero Cycles.

Investors can bid for a minimum of 178 shares and in multiples of 178 thereafter, which works out to a minimum application size of roughly Rs 14,952 for retail investors at the upper end of the price band. The offer reserves 50% for qualified institutional bidders and 15% for non-institutional investors, with the balance set aside for retail applicants.

Of the fresh issue proceeds, the company has said Rs 190 crore will go toward repaying, prepaying, or redeeming existing borrowings, while Rs 200 crore is earmarked for capacity expansion at its manufacturing facility in Gautam Buddha Nagar, Uttar Pradesh.

What Hero Motors Does

Hero Motors positions itself as an automotive technology company rather than a two-wheeler brand in its own right. It is a components and powertrain supplier with a growing electric vehicle business, operating separately from the listed Hero MotoCorp, though both trace back to the broader Hero Group and its promoter family.

For the financial year ended March 31, 2026, the company reported revenue of Rs 1,216.74 crore and net profit of Rs 41.17 crore, up from revenue of Rs 1,111.23 crore and profit of Rs 32.80 crore in FY2024-25. At the upper end of its IPO price band, the company is expected to command a market capitalisation of a little over Rs 3,815 crore, implying a price-to-earnings multiple of roughly 93 times trailing earnings.

The Road to This IPO

Hero Motors’ path to listing has run longer than most. The company first filed draft papers with SEBI for a Rs 900 crore issue, then refiled its draft red herring prospectus in mid-2025 to raise the planned issue size to Rs 1,200 crore, before ultimately launching at Rs 1,000 crore. ICICI Securities, DAM Capital Advisors, and JM Financial are the book-running lead managers, with KFin Technologies as registrar.

Frequently Asked Questions

How much did Hero Motors raise from anchor investors? Rs 299.99 crore, through the allotment of 3,57,14,284 equity shares at Rs 84 per share.

Who were the key anchor investors? Domestic mutual funds accounted for the bulk of the allocation, alongside ICICI Prudential Life Insurance Company, Edelweiss Life Insurance Company, Societe Generale, ASAS Global Fund, and 3P India Equity Fund.

What is the size and price band of the Hero Motors IPO? The IPO is sized at up to Rs 1,000 crore, with a price band of Rs 79 to Rs 84 per share, comprising a Rs 600 crore fresh issue and a Rs 400 crore offer for sale.

When does the Hero Motors IPO open and close? It opened for public subscription on September 16, 2026, and closes on September 18, 2026.

What will Hero Motors do with the IPO proceeds? Rs 190 crore will go toward repaying or prepaying existing borrowings, and Rs 200 crore will fund capacity expansion at its Gautam Buddha Nagar facility.

What does Hero Motors do? It is an automotive technology and components supplier under the Hero Group, with a growing electric vehicle and powertrain business, distinct from the listed Hero MotoCorp.

What is the minimum investment for retail investors? The minimum lot size is 178 shares, working out to roughly Rs 14,952 at the upper end of the price band.

This article reports on publicly disclosed IPO and anchor allocation information as of September 2026 and does not constitute investment advice or a recommendation to subscribe to any IPO.