The shares of the world’s largest two-wheeler manufacturer opened on a positive note, reaching an intraday high of ₹5,186.65 per share, following the board’s approval of a ₹4,000 crore IPO for its subsidiary.
On Thursday, at 11:30 a.m., Hero MotoCorp Ltd shares were trading at ₹5,135 per share, down 0.13 percent from the previous close price on the National Stock Exchange, and the company has a market capitalization of ₹1,03,284.41 crores.
According to the company’s exchange filing, the Board of Directors of Hero FinCorp Limited (“Hero FinCorp”), a subsidiary of Hero MotoCorp Limited (NS:HROM) (“Company”), approved plans for an initial public offering (IPO) at their meeting on May 29, 2024.
The Company’s Board of Directors has approved to undertake an IPO of equity shares with a face value of ₹10 each. This IPO will include a fresh issue of equity shares amounting to up to ₹40,000 million, along with an offer for sale of equity shares by certain existing and eligible shareholders.
Hero FinCorp, a non-banking financial company, primarily provides financing to retail and corporate customers through various products, including two-wheeler financing, term loans, working capital loans, loans against property, bill discounting, and leasing.
Hero MotoCorp shares have gained 35 percent in the last six months and 85 percent in a year.
Hero MotoCorp (HMCL) is the world’s largest two-wheeler manufacturer by volume, boasting a domestic market share of 30.2% as of FY24. Its popular models include Splendor, Passion, Glamour, and many more.
The company manufactures and sells motorized two-wheelers, spare parts, and related services. It has an annual production capacity of over 9.50 million units across eight manufacturing facilities—six in India, one in Colombia, and one in Bangladesh.
Hero MotoCorp Ltd reported a consolidated net profit of ₹943 crores for the quarter ending March 2024 (Q4FY24), a 16% increase from ₹810 crores in Q4FY23. The company’s total revenue for the same quarter grew by 13% to ₹9,794 crores, up from ₹8,671 crores in the corresponding quarter of the previous year.
In Q4 FY24, the company saw significant sales, with 1.392 million units of motorcycles and scooters sold, up from 1.27 million units in the same period of FY23.
Additionally, Hero MotoCorp achieved impressive financial performance with an EBITDA of ₹1,359 crores for Q4 FY24, marking a substantial 25% growth.
The company management aims for double-digit revenue growth in FY25, with a long-term EBITDA margin guidance of 14%-16%. Capex for FY25 is expected to be between ₹1,000 to ₹1,500 crores. Furthermore, the company plans to launch the Xoom 125 and Xoom 160 scooters in H1FY25.
Hero MotoCorp is also expanding the capacity of its premium offerings, including Mavrick, Harley, and Karizma, to 10,000 units per month, with commissioning expected in the next two months.
Written by Omkar Chitnis
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