Auto components company Hero Motors Ltd. on Saturday filed a draft red herring prospectus (DRHP) with markets regulator Securities and Exchange Board of India (SEBI) to raise ₹900 crore through an initial public offering (IPO).

The IPO with a face value of ₹10 is a mix of fresh issue of up to ₹500 crore and an offer for sale up to ₹400 crore by promoters. 

The OFS includes ₹250 crore worth shares by O.P. Munjal Holdings, and ₹75 crore each by Bhagyoday Investments and Hero Cycles.

Proceeds from the fresh issue of shares will be used to the extent of ₹200.1 crore for repayment or pre-payment, in full or in part, of certain of its outstanding borrowings availed by the company, ₹124 crore for funding capital expenditure towards purchase of equipment required for expansion in capacity of the Gautam Buddha Nagar, Uttar Pradesh facility, besides general corporate purposes.