Summary of this article
Hero Motors reduced its total IPO to Rs 1,000 crore.
The fresh issue is now revised to Rs 600 crore.
Proceeds will fund debt repayment and Uttar Pradesh expansion.
India is seeing a surge in both the number of initial public offerings (IPOs) being floated in the market as well as investor participation in these. Now, Hero Motors has reduced its issue size and modified the structure of its offer for sale (OFS) ahead of its initial public offering.
Hero Motors IPO: Offer Size and OFS
On August 29, 2026, Hero Motors changed its proposed public issue to Rs 1,000 crore after receiving approval from the Securities and Exchange Board of India (Sebi), according to newspaper reports. Earlier the firm had filed a draft red herring prospectus (DRHP) with an issue size of Rs 1,200 crore, structured to include a fresh issue of Rs 800 crore and an OFS of Rs 400 crore.
The original OFS featured shares worth up to Rs 390 crore by O P Munjal Holdings, Rs 5 crore by Bhagyoday Investments, and Rs 5 crore by Hero Cycles. Following recent adjustments, the overall IPO size has been reduced to Rs 1,000 crore and the fresh issue component has been revised downward to Rs 600 crore from Rs 800 crore previously.
Although the total OFS portion remains unchanged at Rs 400 crore, its internal composition has been altered. Bhagyoday Investments has decided to completely withdraw its offer of shares worth Rs 5 crore. To balance this withdrawal, O P Munjal Holdings has increased its offer size to Rs 395 crore while Hero Cycles will continue to offer shares worth Rs 5 crore.
Sebi's Rules For IPO Bound Firms
Sebi had introduced new regulatory rules effective April 13, 2026 that granted flexibility to IPO bound firms. These regulations allow companies to revise their fresh issue size by up to 50 per cent without the requirement of refiling the DRHP with Sebi.
These rules seek to bring relief to firms navigating unpredictable and volatile market conditions. The rules are helpful for companies because they eliminate the time-consuming process of refiling extensive regulatory documents and the DRHP. In turn, this allows businesses to adapt to shifting capital requirements, thus ensuring that their public fundraising plans remain responsive to current market realities.
Hero Motors IPO: What Happens Now
Following the development, Hero Motors has also revised the objects of the offer for its fresh issue proceeds. Out of the net proceeds generated, Rs 190 crore will be used to repay or prepay existing corporate debt.
Another Rs 200 crore has been allocated to purchase equipment necessary for expanding the production capacity at its facility in Gautam Buddha Nagar, Uttar Pradesh. The remaining funds will be used for driving inorganic growth through unidentified acquisitions as well as fulfilling general corporate purposes.
The proceeds from the OFS will directly go to the selling shareholders. With the revised financial structure in place and regulatory approval obtained, the company is positioned to proceed with launching the IPO. Investors are now awaiting the official announcement of the price band along with the opening dates for the public issue.
