Hero Motors Limited: A Powertrain Giant Prepares for the Public Markets

Hero Motors isn’t just another auto component maker—it’s a global powertrain specialist straddling ICE, EVs, and next-gen mobility, now heading towards a ₹1,200 crore public issue.

Hero Motors Limited (HML) is a technology-led automotive component company focused on advanced powertrain solutions. Unlike traditional auto ancillaries that depend heavily on ICE vehicles, Hero Motors has built a powertrain-neutral portfolio, serving:

• ICE vehicles

• Electric vehicles (EVs)

• Hybrid platforms

• Emerging mobility categories like e-bikes, micro-mobility, and eVTOLs

Its customers span India, Europe, the US, and ASEAN, making it a genuinely global auto-tech supplier rather than a domestic ancillary player.

What Exactly Does Hero Motors Make?

Hero Motors operates across the entire powertrain value chain—from precision gears to fully integrated electric drive systems.

1️⃣ Powertrain Solutions – Gears & Transmissions (G&T)

This is the company’s traditional backbone.

• End-to-end transmission systems

• Applications across:

  • Two-wheelers

  • Passenger cars

  • Commercial vehicles

  • Aerospace & marine

  • Off-road and specialty EVs

• Entry into motorsport and high-performance segments via global partnerships

2️⃣ Powertrain Solutions – Bike Powertrain (BPT)

This is where Hero Motors pivots sharply toward electrification.

• Focused exclusively on EVs

• Products include:

  • CVT / CVP hubs

  • Electric motors

  • Integrated Electric Drive Units (EDUs)

Strategic edge:

• First Indian company to manufacture and export CVT hubs and integrated e-bike powertrains

• Partnerships with enviolo and a JV with Yamaha Motors (Japan)

Since 2019, this segment has positioned Hero Motors as a first-mover in global e-bike powertrains.

3️⃣ Alloys & Metallics (A&M)

A quieter but crucial business.

• Manufactures high-precision alloy components

• Serves both ICE and EV platforms

• Capabilities include: Welding , Machining, Painting 

Strategic role:

• Lightweight components

• Premium OEM relationships

• Cost optimization support for global customers

👉 Importantly, this segment is powertrain-neutral, protecting revenues during the EV transition.

Global Footprint: Built for Exports

Hero Motors operates 6 manufacturing facilities and 2 technology centers across 3 countries.

Manufacturing Plants (6)

• GB Nagar, India

• Ludhiana, India (3 plants)

• Samut Prakan, Thailand

• Maidenhead, United Kingdom

Technology Centers (2)

• GB Nagar, India

• Southam, United Kingdom

Why this matters:

• Customer proximity for global OEMs

• Faster product co-development

• Cost-efficient manufacturing with global quality standards

Subsidiaries & Strategic JVs: The Hidden Strength

Hero Motors isn’t operating alone—it has built a tightly integrated group structure.

• Hewland Engineering (UK) – High-performance & motorsport gearboxes

• Hero Motors Thai Ltd – ASEAN-focused gearbox assembly hub

• HYM Drive Systems (JV with Yamaha) – Advanced electric motors with Japanese-grade quality systems

• Hero EDU Systems – Integrated EDUs under the ‘ESYNC’ brand

• Spur Technology – Components for premium bikes and e-bikes

👉 These entities push Hero Motors up the value chain—from components to systems and solutions.

Financial Snapshot: Stable Revenues, Uneven Profits

Revenue (₹ Cr)

• FY23: 1,055

• FY24: 1,064

• FY25: 1,090

👉 Revenue growth has been steady but modest.

Profitability Volatility

• EBITDA margin fell sharply in FY24 (5.9%) before recovering to 8.1% in FY25

• PAT dropped from ₹40 Cr (FY23) to ₹17 Cr (FY24), then rebounded to ₹33 Cr (FY25)

What happened?

• Heavy investments

• D&A Rise upto 38 Cr from 29 Cr last year

• New facilities ramp-up

• EV and global expansion costs

Balance Sheet: Growth Fueled by Capital

• Fixed assets jumped from ₹261 Cr (FY23) to ₹510 Cr (FY25)

• Borrowings increased from ₹270 Cr to ₹408 Cr

👉 This tells a clear story: capacity expansion funded largely by debt.

Cash flows reflect this:

• Strong but volatile operating cash flows

• Consistently negative investing cash flows due to capex

The IPO Structure: Who Gets the Money?

🔹 Fresh Issue – ₹800 Crore

Money goes to the company for:

• Debt repayment

• Capacity expansion at GB Nagar

• Inorganic acquisitions

• General corporate purposes

🔹 Offer for Sale – ₹400 Crore

Money goes to selling shareholders, mainly:

• O P Munjal Holdings

• Bhagyoday Investments

• Hero Cycles

👉 Important: OFS does not strengthen the company’s balance sheet.

Shareholding: Promoters Still in Control

• Promoter Group: ~76%

• Institutional Investor (South Asia Growth Invest): ~7%

• Others: ~10%

Post-IPO, promoters are expected to retain majority control.

The UnlistedZone Take

What’s working:

• Strong positioning in EV + ICE

• First-mover advantage in e-bike powertrains

• Global manufacturing and R&D footprint

• High entry barriers due to system-level capabilities

What to watch:

• Rising debt levels

• Profitability volatility

• Execution risk in EV and overseas expansion

 Hero Motors is not a cyclical auto ancillary—it’s a long-term mobility technology play. The IPO is less about growth today and more about funding the next decade of electrified and global powertrain expansion.