Hero Motors, an auto component manufacturer led by Pankaj Munjal, is planning to raise as much as Rs 1,500 crore through initial public offering (IPO) and has chosen three investment banks for it, according to a The Economic Times report.

ICICI Securities is likely to lead manage the proposed public issue.

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Hero Motors makes engine and transmission components for two wheelers and has a global clientele that includes the likes of BMW, Ducati and Harley Davidson.

Hero Motors’s CEO Pankaj Munjal is the first cousin of Hero MotoCorp chairman Pawan Munjal. Hero Motors was spun off from Hero Cycles, a company helmed by Pankaj Munjal's father Om Prakash Munjal for decades before the latter passed away in 2015. Hero MotoCorp's Pawan Munjal is the son of Brij Mohan Lall Munjal, a sibling of Om Prakash Munjal.

The ET report further revealed that the preparations for IPO have been going on for over 18 months at Hero Motors. The company appointed Deloitte Haskins and Sells as its auditors, sources were quoted as saying.

The company had raised around Rs 144 crore from GEF Partners to set a valuation mark before it goes public. 

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It has also projected that it will garner sales of around Rs 1,200 crore by the close of the current financial year, people aware of the matter were quoted as saying by ET.

The IPO activity had continued despite lower growth prospects. From January 2023 till date, India’s BSE and NSE witnessed 14 listings raising a total of $ 1.61 Bn. This surge reflects the bullish orientation of the Indian stock market and the resilience and vibrance of the entrepreneurial activity in the country, according to a report by Indian Venture and Alternative Capital Association (IVCA).

“While FII buying activity has majorly been driven by global cues, continued support from domestic investors gives us a lot of confidence in the real depth of capital markets. We expect IPOs worth USD 50-60 billion to tap the Indian markets by 2028,”  said Gaurav Sood, Managing Director and Head, Equity Capital Markets, Avendus Capital.