Hero Motors withdraws draft papers for IPO

Mumbai: Auto component maker Hero Motors has withdrawn its draft red herring prospectus (DRHP) for the proposed ₹900 crore initial public offering. The draft papers filed in August were withdrawn by the company on October 5, according to the processing status available on the SEBI website.

According to investment bankers, there were some technical issues with the draft papers and Sebi requested the company to make necessary revisions. As a result, the company decided to withdraw and refile the DRHP, they said. "The withdrawal of the DRHP has nothing to do with the weak secondary market. The company is expected to submit the revised DRHP within a month," said one of the bankers.

The IPO was intended to consist of a fresh issue of up to ₹500 crore and an offer for sale (OFS) of ₹400 crore. The OFS consists of shares worth ₹250 crore from OP Munjal Holdings and ₹75 crore each from Bhagyoday Investments and Hero Cycles.


About ₹200 crore from the net proceeds from the fresh issue will be used for the repayment of certain borrowings, ₹124 crore for funding capital expenditure on equipment for expanding capacity at the Gautam Buddha Nagar, facility in Uttar Pradesh , and the remainder will be allocated for general corporate purposes.

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