🚫 Avoid
Listed
Auto Components & Equipments
Hero Motors Limited IPO
₹1000 Cr · Fresh Issue & OFS · Auto Components & Equipments
Price Band
₹79 – ₹84
GMP (Grey Market)
—
No GMP data yet
Issue Size
₹1000 Cr
Fresh Issue & OFS
Market Cap
₹3815.41 Cr
At upper band
P/E Ratio
92.7x
P/S: 3.2x
Listing Date
23 Sep 2026
BSE & NSE
IPO Timeline
✓
Opens
16 Sep 2026
✓
Closes
18 Sep 2026
✓
Allotment
21 Sep 2026
✓
Refund
22 Sep 2026
✓
Listing
23 Sep 2026
IPO India Hub: Strong Avoid
Conviction
2/10
The company is priced at 92.7x earnings, or 4.64× the auto components sector midpoint of 20×, making it severely overvalued even after accounting for strong PAT growth. While the 55.4% two-year PAT CAGR is notable, the 3.4% net margin and 6% revenue CAGR reveal a business with thin profitability and slowing top-line momentum that cannot justify a near-5× premium.
Listing Performance
Issue Price
₹84
Allotment price
Listing Price
₹82.1
-2.26% on listing day
Current Price (CMP)
₹111.05
+32.2% vs issue
Listed On
23 Sep 2026
BSE & NSE
Our Analysis — Key Points
✓ Strength
Strong profit growth trajectory
Net profit has grown at 55.4% CAGR over two years, from ₹17.0 Cr (FY-2) to ₹41.2 Cr (FY0), demonstrating operational leverage. This growth rate exceeds the sector baseline and suggests improving cost control or operational efficiency.
✓ Strength
Healthy balance sheet and returns
Debt-to-equity ratio of 0.83× is conservative for auto components, and ROCE of 19.77% indicates efficient capital deployment. Promoter holding remains strong at 61.63% post-issue, signaling continued founder commitment.
⚠ Risk
Severe valuation premium unjustified
At 92.7× P/E, the company trades at 4.64× the sector midpoint (20×), the highest multiple in the auto components space. No margin expansion or growth rate in the data supports a premium of this magnitude; the 3.4% NPM is below-average for the sector.
⚠ Risk
Revenue growth significantly lagging
Two-year revenue CAGR of only 6% is well below the 20%+ threshold for conviction and below sector growth norms. This slow top-line expansion, combined with thin margins, raises questions about the company's competitive position and pricing power.
₹ Valuation
Extreme P/E multiple vs sector
The 92.7× P/E ratio is 4.64× the auto components sector midpoint of 20× (range 15–25×). Even the P/S ratio of 3.2× is elevated. No profitability margin (3.4% NPM) or growth rate (6% revenue CAGR) justifies entry at this price band.
👁 Watch
Monitor margin sustainability post-listing
Investors must track whether the 12.44% EBITDA margin can be maintained as the company deploys ₹200 Cr in capex expansion. Any margin compression would further expose the valuation risk.
Top Analyst Reviews
| Analyst / Firm | Rating | Known For | Review |
|---|---|---|---|
| IPO India Hub Our independent review |
Original analysis based on DRHP & public financials | This page | |
| Dilip Davda Chittorgarh.com |
India's most followed independent IPO analyst | Search on Chittorgarh → | |
| Capital Market (CM Rating) CapitalMarket.com |
Widely-cited "New Issue Monitor" reports | Search on CapitalMarket → | |
| ICICI Securities ICICIdirect Research |
SEBI-registered broker research desk | Visit ICICIdirect → | |
| IPO Guru Analyst Leaderboard ipoguru.in |
Ranks 49 analysts by real IPO outcome accuracy | View leaderboard → |
External links go to each platform's IPO section — search for "Hero Motors Limited" to find the specific review. IPO India Hub does not represent the accuracy of third-party ratings.
Company Snapshot
Revenue
₹1188.35 Cr
Net Profit
₹41.17 Cr
Industry
Auto Components & Equipments
Issue Type
Fresh Issue & OFS
Promoters
PANKAJ MUNJAL, CHARU MUNJAL, ABHISHEK MUNJAL AND O P MUNJAL HOLDINGS
Lead Managers
ICICI Securities, DAM Capital Advisors and JM Financial
Quick Actions
Frequently Asked Questions
Avoid. The company is priced at 92.7x earnings, or 4.64× the auto components sector midpoint of 20×, making it severely overvalued even after accounting for strong PAT growth. While the 55.4% two-year PAT CAGR is notable, the 3.4% net margin and 6% revenue CAGR reveal a business with thin profitability and slowing top-line momentum that cannot justify a near-5× premium.
GMP data is not yet available for this IPO. Check our GMP Live page for the latest updates closer to the listing date.
Lot size details will be updated when the DRHP is filed. The price band is ₹79 – ₹84.
The IPO opens on 16 Sep 2026. It closes on 18 Sep 2026. Allotment is expected on 21 Sep 2026. Refunds initiate on 22 Sep 2026. Listing on BSE and NSE is on 23 Sep 2026.
The lead managers for the IPO are ICICI Securities, DAM Capital Advisors and JM Financial. Check the SEBI filing for the registrar details.
The IPO listed on 23 Sep 2026 at ₹82.1 against an issue price of ₹84 (-2.26% on listing day). The current market price (CMP) is approximately ₹111.05 (32.2% vs issue).
Our analysis recommends <strong>Avoid</strong>. We suggest skipping this IPO before the issue closes on 18 Sep 2026. The company is priced at 92.7x earnings, or 4.64× the auto components sector midpoint of 20×, making it severely overvalued even after accounting for strong PAT growth. While the 55.4% two-year PAT CAGR is notable, the 3.4% net margin and 6% revenue CAGR reveal a business with thin profitability and slowing top-line momentum that cannot justify a near-5× premium.
Our analysis recommends <strong>Avoid</strong>. We suggest skipping this IPO before the issue closes on 18 Sep 2026. The IPO is priced at a P/E of 92.7x. Market cap at issue price is ₹3815.41 Cr. As with all IPOs, please read the DRHP and assess your own risk tolerance before investing.
You can apply via UPI through your broker's trading app (Zerodha, Upstox, Fyers, etc.) or via ASBA through your net banking portal. The issue closes on 18 Sep 2026, so apply before that date. Step 1: Log in to your broker or bank app. Step 2: Go to IPO section and search for 'Hero Motors Limited'. Step 3: Enter the number of lots and UPI ID. Step 4: Accept the mandate on your UPI app.
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