Hero Motors Shares Hit 10% Lower Circuit After IPO Debut As Investors Book Profits
· Free Press Journal
Shares of Hero Motors declined 10% on Monday, hitting the lower circuit on the BSE as investors booked profits following the company’s recent stock market debut.
The company’s shares hit ₹127.67 mark on the BSE, marking a fall of 10%, which was the maximum permitted decline for the session. However, despite the correction, the stock continued to trade 55.7% above its listing price of ₹82 per share.
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At around 1 PM, the stock was trading 5.5% lower to reverse some of the decline in the earlier trade.
Hero Motors shares made their market debut on September 23. The stock opened at ₹82 on the NSE, representing a 2.38% discount to its IPO price of ₹84. On the BSE, the shares started trading at ₹82.10, a 2.26% discount to the issue price.
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Hero Motors had set a price band of ₹79-84 per share for its initial public offering. The ₹1,000-crore IPO consisted of a fresh issue of shares worth ₹600 crore and an offer for sale (OFS) component of ₹400 crore.
The company’s shares had witnessed gains after listing, but Monday’s decline reflected profit-taking by investors following the initial rise.
Hero Motors plans to use proceeds from the fresh issue for business expansion and financial obligations. Around ₹190 crore has been allocated towards repayment or prepayment of certain borrowings.
The company has also earmarked ₹200 crore for purchasing equipment to expand capacity at its manufacturing facility in Gautam Buddha Nagar, Uttar Pradesh.
The remaining funds will be utilised for inorganic growth opportunities, including potential acquisitions and strategic initiatives, along with general corporate purposes.
The stock movement comes as investors assess the company’s future growth prospects, expansion plans and ability to utilise IPO proceeds effectively.