Hero Motors IPO review: Why are analysts rating it 'Neutral'? GMP at 28%

Hero Motors IPO review: Analysts have assigned a 'Neutral' rating to the Hero Motors IPO despite the company reporting strong profit growth, even as revenue expansion remains modest.

Hero Motors IPO review: Auto parts maker Hero Motors Ltd's IPO will open for subscription today. The company has fixed a price band of ₹79-84 per equity share for its ₹1,000 crore IPO, which will remain open for subscription till September 18.

The public issue comprises a fresh issue of equity shares aggregating up to ₹600 crore and an OFS of shares worth up to ₹400 crore by promoters.

Under the OFS, OP Munjal Holdings will divest shares worth ₹395 crore, while Hero Cycles Ltd will sell shares worth ₹5 crore.

Analysts have assigned a ‘Neutral’ rating to the Hero Motors IPO despite the company reporting strong profit growth, even as revenue expansion remains modest.

According to SBI Securities, Hero Motors delivered revenue/Ebitda/PAT CAGR of 5.7 per cent/34.3 per cent/55.5 per cent, respectively, during FY24-FY26.