The Hindu Business Line : Hero Motors to go public in five years

"Private equity holders would be looking to exit. We expect to go public in the near term," Mr Pankaj Munjal, Managing Director of Hero Motors, told Business Line. Within the next 3-5 years, the company would like to position itself as one selling premium-end scooters. It also plans to build itself into a major outsourcing base providing engineering solutions and vehicle designs.

Mr Munjal said with the tie-up with Italian scooter giant Aprilia, Hero Motors would be able to cover the entire European market; with joint ventures in Thailand and Brazil, it would be able to target the rest of the markets. He said the company plans to send teams to Brazil and Thailand next month to short-list a joint venture partner for its plants there.

Mr Munjal said the company plans to raise around Rs 200 crore through private placements and sale of equity to increase its capacity to 4 lakh units per year from the existing 1.2 lakh and produce new scooters under a technical tie-up with Aprilia. He, however, refused to reveal the names of the companies that Hero Motors was in talks with for selling its equity.

The official said over the next five years, the company would export scooters and auto parts worth Rs 100 crore every year. The company currently exports its scooterettes to South America, North Africa and South-East Asia.

It expects to export around 65,000 scooters during the current fiscal, more than double the numbers compared with the previous year. In the domestic market, it sold around 70,000 units and expects to sell 30 per cent more this fiscal.

Hero Motors plans to launch the first scooter from the Aprilia stable, codenamed Project Sonic, during the last quarter of the current calendar year. Two other scooters, codenamed Project SR, which is powered by the world's first liquid cooled engine, and Twister, will be launched next calendar year. All the three scooters will be above 100 cc. Mr Munjal said these scooters would be priced at least 10 per cent higher than its competitors in the market.

Hero Motors' technical tie-up with Aprilia involves design outsourcing, engine supply contract and full vehicle export (under a buyback arrangement with Aprilia). Under the collaboration with Aprilia, the company would manufacture 75- and 92-cc scootterettes, 125-cc moto-scooters and 125-cc scooters with the body technology sourced from the Italian company. Aprilia, the second-largest producer of motorcycles and scooters in Europe, has a range of 22 models from 500 cc to 1000 cc in scooters as well as in motorcycles.

Earlier, Mr Munjal launched Hero Sting, a 92-cc step thru' bike. The bike costs Rs 23,990 and gives around 70 km per litre.

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