Hero Motors raises Rs 300 Cr from anchor investors ahead of IPO

Hero Motors has raised Rs 299.99 crore from anchor investors ahead of its initial public offering (IPO) which opens for public subscription today.

In a communication to the exchanges, Hero Motors said it had allocated 57,14,284 equity shares at Rs 84 per share to anchor investors. The automotive technology company has priced its IPO in the range of Rs 79-84 per share.

Institutions who participated in the anchor include ICICI Prudential Life Insurance Company Limited, 3P India Equity Fund 1M, Edelweiss Life Insurance Company Limited, Societe Generale – ODI, and ASAS Global Fund Incorporated VCC Sub Fund.

Amongst equity-oriented schemes, the company has allocated shares to ICICI Prudential Smallcap Fund, Kotak Mahindra Trustee Co Ltd A/C Kotak MNC Fund and JM Financial Mutual Fund – JM Flexi Cap Fund, among others.

Out of the total allocation of 3,57,14,284 equity shares to anchor investors, 2,91,64,441 were allocated to 7 domestic mutual funds through 16 schemes.

The IPO is a combination of a fresh issue of up to Rs 600 crore and an offer-for-sale of equity shares up to Rs 400 crore by promoters O P Munjal Holdings and Hero Cycles Limited.

Of the proceeds from the fresh issue, Rs 190 crore will be used for repayment/prepayment/redemption in full or in part, of certain outstanding borrowings availed by the company, while Rs 200 crore will be allotted for capital expenditure, including purchase of equipment for capacity expansion at the company's facility in Gautam Buddha Nagar, Uttar Pradesh. Funds will be also allocated for inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.

Hero Motors is engaged in designing, developing, manufacturing and supplying engineered powertrain solutions to automotive original equipment manufacturers (OEMs) in United States, Europe, India and ASEAN.