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.

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.