Hero Motors targets ₹400 crore incremental revenue from IPO-funded EV capacity expansion

Hero Motors plans to use ₹200 crore of its ₹1,000 crore IPO toward manufacturing expansion, targeting 1.5-2x revenue output from the investment. It will also allocate ₹190 crore to debt repayment as global EV powertrain projects enter production from 2027.

— Source publishedWed, 16 Sept, 2026, 11:29 IST·First seen Wed, 16 Sept, 2026, 11:29 IST·Source CNBC-TV18 · Companies

What happened

Hero Motors plans to deploy IPO proceeds toward Indian EV powertrain capacity, debt reduction and potential acquisitions. The Hero Group company expects EV

Key facts

  • ₹1,000 crore IPO
  • ₹600 crore fresh issue
  • ₹400 crore offer for sale
  • ₹79-84 per share price band
  • ₹200 crore for manufacturing-capacity expansion
  • ₹190 crore for debt repayment
  • EVs contribute 23% of overall revenue
  • EV share exceeds 40% of powertrain solutions revenue
  • Powertrain margins: 20-22%
  • Alloys business margins: 6-7%
  • Current debt: around ₹400 crore
  • Post-repayment debt: nearly ₹210 crore
  • 70-80% of business from premium mobility segments
  • Expected revenue output versus CapEx: 1.5-2x

Why this matters

Hero Motors is using public capital to secure scale in premium EV powertrains ahead of production launches, potentially making it a more capable partner or competitor in global electrified-mobility supply chains.

What to watch

  • IPO completion, final use-of-proceeds disclosures, and timing of the ₹200 crore manufacturing deployment.
  • Confirmed order book, customer wins, and SOP dates for global EV powertrain projects.
  • Capacity utilization, revenue-per-capex progress, and whether the ₹400 crore incremental revenue objective is reiterated.
  • Net debt reduction and interest-cost savings following the ₹190 crore repayment.
  • Global EV two-wheeler and premium mobility demand trends, especially in export markets.
  • Gross-margin movement as EV components become a larger share of sales.
  • Accelerate customer nominations and long-term supply agreements for powertrain programs scheduled to enter production from 2027.
  • Prioritize modular capacity deployment so capex can be paced against confirmed order intake and utilization.
  • Use lower leverage to improve working-capital capacity for export-led EV component contracts.
  • Increase localization of motors, controllers, gears, and subcomponents to defend margins as OEMs demand cost reductions.