1 hr ago
Hero Motors Shares Rebound After Weak IPO Listing
Hero Motors sold shares to the public through an IPO.
Its shares opened slightly below the IPO price of ₹84.
Later, more people bought the shares, and the price rose strongly.
The stock was reported to have reached its 20% upper circuit.
Analysts said the company could benefit from growing vehicle and electric-vehicle markets.
They also warned that the shares look expensive compared with competitors.
Investors were advised to wait for the price to become more stable and to watch the company’s results.
The company plans to use some IPO money to repay debt and buy equipment.
Hero Motors shares opened below the ₹84 IPO price on 23 September but later recovered.
The stock was quoted at ₹98.40 on the NSE and ₹98.51 on the BSE.
The ₹1,000-crore IPO was subscribed 6.66 times during its three-day bidding period.
Analysts cited electric-vehicle and automotive growth opportunities but warned about valuation and execution risks.
The IPO included a ₹600-crore fresh issue and a ₹400-crore offer-for-sale component.
- Who
- Hero Motors and investors in its IPO.
- What
- Hero Motors shares recovered sharply after opening below their ₹84 IPO price.
- Where
- The shares listed on the NSE and BSE.
- When
- Wednesday, 23 September.
- Why
- Fresh buying followed the weak debut, while investors weighed the company’s growth prospects against valuation and execution risks.
Growth Case
Caution Case
Future growth
Growth Case
Hero Motors could benefit from growth in two-wheelers, gears and transmissions, powertrain solutions, and electric-drive motors.
Caution Case
The longer-term outlook depends on the company sustaining growth, improving profitability, and generating cash.
Stock valuation
Growth Case
Improved return on net worth and EBITDA margins, along with the company’s growth prospects, support investor interest.
Caution Case
The stock’s estimated 69–74 times price-to-earnings valuation is above the peer average of 50.2 times, leaving limited valuation cushion.
Investor action
Growth Case
Existing investors may hold if they accept the risks and monitor the stock with a stop-loss around ₹75–77.
Caution Case
Fresh investors may wait for price stability and review one or two quarterly results before investing.
Key facts
- IPO issue price
- ₹84 per share
- Reported NSE quote
- ₹98.40, up 17.14% from the issue price
- Reported BSE quote
- ₹98.51, up 17.27% from the issue price
- IPO size
- ₹1,000 crore
- IPO subscription
- 6.66 times
- Fresh issue and OFS
- ₹600 crore fresh issue and ₹400 crore offer for sale
- Planned equipment spending
- ₹200 crore for capacity expansion at the Gautam Buddha Nagar facility
Quotes
Shivani Nyati
Head of Wealth at Swastika Investmart
“Although RoNW has improved to 8.53% and EBITDA margin to around 10.2%, both remain below key peers, while high customer concentration adds another risk.”
livemint.com
Sources
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