Daijiworld Media Network – New Delhi
New Delhi, Sep 16: The initial public offering (IPO) of auto parts maker Hero Motors Ltd opened for subscription on Wednesday, with the company seeking to raise Rs 1,000 crore through the public issue.
Ahead of the IPO, Hero Motors raised Rs 300 crore from anchor investors. According to data available on the BSE website, the company allotted 3.57 crore equity shares to anchor investors at Rs 84 per share.
The price band for the IPO has been fixed at Rs 79 to Rs 84 per share. The issue comprises a fresh issue of equity shares worth up to Rs 600 crore and an offer-for-sale (OFS) of shares worth up to Rs 400 crore by promoters.
ICICI Prudential Life Insurance Company Ltd, 3P India Equity Fund 1M, Edelweiss Life Insurance Company Ltd, Societe Generale and ASAS Global Fund Incorporated VCC Sub Fund were among the investors that participated in the anchor round.
In the grey market, Hero Motors shares were reportedly commanding a premium of Rs 19, according to Investorgain. At the upper price band of Rs 84, this indicates an expected listing price of around Rs 103 based on the reported GMP.
The three-day subscription window will close on September 18, while the basis of allotment is expected to be finalised on September 21. The shares are expected to be listed on the NSE and BSE on September 23.
Of the fresh issue proceeds, Rs 190 crore will be used for repayment, prepayment or redemption of certain outstanding borrowings. Another Rs 200 crore is proposed to be utilised for capital expenditure, including the purchase of equipment to expand capacity at the company's facility in Gautam Buddha Nagar, Uttar Pradesh.
The company also plans to use the proceeds to fund potential acquisitions and other strategic initiatives, besides meeting general corporate requirements.
Hero Motors is an automotive technology company involved in designing, developing, manufacturing and supplying engineered powertrain solutions to automotive original equipment manufacturers in the US, Europe, India and the ASEAN region.