The “other Hero” comes to Dalal Street: A Munjal family story with a market twist
The company is separate from listed two-wheeler maker Hero MotoCorp. Both businesses trace their origins to the broader Hero Group, but operate as distinct corporate entities.
For the Munjal family, however, the IPO marks another step in the evolution of a business empire that began with bicycles in Ludhiana and expanded into motorcycles, auto components, engineering and other businesses.
Beyond the Hero badge
Hero Motors is an automotive technology company focused on powertrain systems and components. It designs, develops, manufactures and supplies powertrain solutions to automotive original equipment manufacturers (OEMs) across the US, Europe, India and the Association of Southeast Asian Nations (ASEAN).
The company describes itself as a fully integrated powertrain systems provider, with capabilities spanning design, prototyping, validation, development and delivery of system- and component-level solutions for electric and non-electric applications.
Its products and solutions are used across two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and electric vertical take-off and landing (eVTOL) categories.
Its customers include BMW, Ducati, Enviolo International, Formula Motorsport, Hummingbird EV and HWA, besides electric bicycle manufacturers and customers in other mobility applications, including aerospace, according to the red herring prospectus (RHP).ALSO READ: Too many IPOs, limited cash: How investors should allocate money across multiple issues
The Munjal family’s long road to the market
The Hero Group’s roots go back to 1956, when Hero Cycles Limited was established. The Munjal brothers Satyanand Munjal, Brijmohan Lall Munjal and O. P. Munjal built the business, starting in Ludhiana, Punjab.
Hero Cycles became India’s largest bicycle manufacturer in 1975 and entered the Guinness Book of Records in 1986 as the world’s largest bicycle manufacturer. The group moved into motorcycles in 1984 through Hero Honda Motors Limited, a joint venture with Honda Motor of Japan. Its 100cc motorcycle was launched in 1985 and became India’s No. 1 motorcycle by 1988.
Hero Motors itself dates back to 1987, when it was set up as a division of Majestic Auto Limited in collaboration with Austria’s Steyr Daimler Puch. Hero Puch was introduced a year later.
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The group expanded further through the 1990s and early 2000s. Hero Motors became India’s largest exporter of two-wheelers in 1993. By 2004, Hero Honda was described as the world’s largest manufacturer of two-wheelers, with annual sales of 2.07 million motorcycles and a 48% market share. By the time the group marked its Golden Jubilee in 2006, it had recorded sales of more than 15 million motorcycles and over 100 million bicycles.
What changed in Hero Motors’ ownership
The company’s current ownership structure follows a 2022 Scheme of Arrangement involving Hero Motors, Hero Cycles Limited and their respective shareholders and creditors.
Before the scheme, Hero Cycles held 97.58% of Hero Motors and was identified as a promoter along with Pankaj Munjal, Om Prakash Pankaj Munjal-AOP, O P Munjal Holdings and Munjal Sales Corporation.
The National Company Law Tribunal’s Chandigarh Bench approved the scheme on November 4, 2022.
Following the scheme and changes in shareholding, Pankaj Munjal, Charu Munjal, Abhishek Munjal and O P Munjal Holdings were identified as promoters.
As of the date of the Red Herring Prospectus (RHP), the promoters collectively hold 284,172,126 equity shares, representing 73.46% of Hero Motors’ issued, subscribed and paid-up equity share capital on a fully diluted basis.
Pankaj Munjal, 63, is the Chairman, Non-Executive and Non-Independent Director and a promoter. Abhishek Munjal, 35, is the Whole-time Director and another promoter.
This article has been written by Kumar Gaurav, who is not a SEBI-registered Research Analyst or an Investment Adviser. Gaurav and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.
