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News Topical, Digital Desk : Auto components maker Hero Motors has resubmitted the Draft Red Herring Prospectus (DRHP) for its IPO to market regulator SEBI. The company has increased the IPO size from Rs 900 crore to Rs 1,200 crore. In this IPO, shares will be issued at a face value of Rs 10, which includes a fresh issue of up to Rs 800 crore and an offer for sale (OFS) of up to Rs 400 crore by the promoters.
According to the DRHP, the OFS includes shares worth Rs 390 crore from OP Munjal Holdings and Rs 5 crore each from Bhagyoday Investments and Hero Cycles. Hero Motors' customers include companies like BMW and Ducati.
Where will the money raised from the IPO be used?
The company said that the money raised from the IPO will be used to reduce debt and purchase equipment to expand its facility in Uttar Pradesh. The company can also do a pre-IPO placement of Rs 160 crore. If this placement happens, the size of the fresh issue will be reduced.
How much equity reserve for whom in the IPO
- Up to 50% of the share will be for Qualified Institutional Buyers (QIB).
- 15% for non-institutional investors (NIIs).
- 35% for retail individual investors.
Hero Motors: What is the company's position
Currently, promoters of Hero Motors hold 91.65% stake in the company. Hero Motors manufactures engine and transmission components for 2-wheelers and its global customers include companies like BMW, Ducait and Harley-Davidson.
Read More: Stock Market News: Company receives Warning Letter from US FDA, shares fall
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