Hero Motors IPO GMP Drops to 7%: Subscription, EV Growth and Listing Outlook for Indian Investors

Grey Market Premium Falls to 7% on Final Bidding Day

On the third and final day of bidding (September 18, 2026), the Hero Motors IPO was commanding a grey market premium of around 7% over its issue price of Rs 84, indicating a potential listing gain if sentiment holds Economic Times live blog.

Subscription Driven by Retail Investors

By the end of Day 3, the issue was subscribed 4.09 times overall. Retail investors subscribed their portion 5.99 times, non‑institutional investors 3.90 times, while qualified institutional buyers managed only 7% subscription Economic Times. On the first day, overall subscription was 1.38 times, with retail at 2.23 times and QIB at 1% ETAuto.

EV Growth Masks Weakness in Traditional Segment

Value Research shows EV revenue rose 55.6% in FY26, lifting its share to 23% of total sales from 12% in FY24. Nearly 99% of FY26’s incremental revenue came from EV products Value Research. Meanwhile, the Alloys & Metallics segment posted a –2.9% margin in FY26, while the Powertrain segment margin stood at 16.3% Value Research.

Valuation and Analyst Views

At the upper price band of Rs 84, Hero Motors is valued at about Rs 3,815 crore, translating to roughly 92.6 times FY26 price‑to‑earnings (P/E) Value Research. This is nearly double the peer median P/E of 46.7x Value Research. Anand Rathi rated the IPO “Subscribe‑Long Term” but called it fully priced at 92.6x FY26 P/E Economic Times, while Master Capital Services saw long‑term potential from EV powertrain exposure Economic Times.

Use of Proceeds and Expected Listing

The company plans to use Rs 190 crore of the fresh issue for debt repayment and Rs 200 crore for capacity expansion at its Gautam Buddha Nagar plant Value Research. Shares are expected to debut on the stock exchanges around September 23, 2026 ETAuto.