Hero Motors Limited IPO

The company generates a portion of its revenue from operations from jurisdictions outside India, in particular, from Europe which contributed 26.27%, 29.33%, 32.47% and 29.34% of the company's revenue from operations, in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively. Any adverse events affecting these jurisdictions could have an adverse impact on its revenue from operations.

The company's business is dependent on the performance of certain industries particularly e-bikes and two wheelers, both in the Indian and overseas markets. Any adverse changes in the conditions affecting these industries can adversely impact its business, results of operations, cash flows and financial condition.

The company depends on a certain limited set of suppliers for the supply of critical raw materials. Further, the company does not have definitive supply agreements with all the company's suppliers for the supply of raw materials. Interruptions in the supply of raw materials could adversely affect its business, financial condition, results of operations and cash flows.

The company is subject to strict performance requirements, including, but not limited to, quality and delivery, by its customers, and any failures by the company to comply with these performance requirements may lead to recalls or warranty liability claims, reduction of share of business or the cancellation of existing or future orders, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company's business largely depends upon its top 10 customers. In the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022 the company's revenue from operations from top 10 customers was Rs. 6,010.73 million, Rs. 8,191.86 million, Rs. 9,369.23 million, and Rs. 7,859.23 million, representing 74.46%, 76.96%, 88.84%, and 85.97% of its revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on the company's business, financial condition, results of operations and cash flows.

The company may not be able to anticipate and respond swiftly to changing technological and market trends, as well as to develop new products aligned with customer demands in the automotive sector, which could have an adverse impact on its financial condition.

The company may not be able to compete effectively in the global powertrain solutions industry which could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company's inability to maintain and protect its brand and business reputation could adversely affect the company's business, prospects and financial performance.

The company's manufacturing facilities and technology centres are subject to operating risks. Any shutdown of its existing technology centres and manufacturing facilities or future technology centres and manufacturing facilities or any other operational problems caused by unforeseen events may reduce sales, market share and adversely affect its business, cash flows, results of operations and financial condition.

The Company may not be successful in implementing its strategies, including increasing focus on providing complete systems and powertrain solution for e-mobility segment, expanding into other market segments and geographies which may adversely affect its business, cash flows, results of operations and future prospects.