Exclusive | Pankaj Munjal’s Hero Cycles plans IPO, fundraising and acquisitions

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26 Aug, 2025 12:21

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Hero Cycles, the largest integrated bicycle manufacturer in the world, has laid out aggressive business expansion plans for the next two years, including stake sales in group companies, acquisitions and an initial public offering (IPO).

The Pankaj Munjal-led company, which is part of the HMC Group, wants to expand globally, especially in the high-margin European market, where it wants to break into the league of the top five bicycle producers.

To push product and market expansion globally, Hero Cycles is in the advanced stages of finalising the buyout of two companies outside India.

“We will announce something this month (October) and something again in November,” chairman Munjal told Moneycontrol. “These are decent-sized companies from Japan and Europe, but we can disclose the deal size only later.”

Once the two acquisitions are concluded, Hero Cycles will clear the decks to raise a minimum of $200 million through stake sales in group entities.

“We are looking for dilution in Hero International, Firefox and Hero Motors. We will not dilute more than 20-25 percent. We are looking at a bigger road map for the future. We want to be among the top five players in Europe by 2024,” Munjal added.
Currently, 50 percent of Hero Cycle’s turnover is generated outside India. The company has strengthened its footprint in Europe over the past few years through Hero International. In 2015, Hero acquired Manchester, UK-based Insync Bikes, which was followed by the buyout of Berlin-headquartered HNF Nicolai in 2020.

In May 2021, Hero Cycles appointed Jeff Weiss, a bicycle industry veteran with 20 years’ experience, as CEO of London-based Hero International to head the European operations and steer the expansion plans.

As per the Confederation of the European Bicycle, E-Bike, Parts & Accessories Industries (CONEBI), the European bicycle market was valued at 18.3 billion euros in 2020, or 22 million units.

“We have invested Rs 300-350 crore in e-cycle valley in Ludhiana and about Rs 200 crore will be invested in England, Germany and Slovakia ,where we are expanding operations,” Munjal said. “The best companies in the world are talking to us. Our large working capital is getting locked in; we are building more capacity in Europe. In three months, we will have the funds raised in one company and two more in six months.”

Electric bicycles or e-cycles have caught the fancy of most international markets, especially in Europe. Sales of e-cycles closed at 10.6 billion euros in 2020, as per CONEBI.

Bajaj Auto’s European partner KTM had ventured into the e-cycles segment and launched them in Germany, Austria, Netherlands and other European markets.

IPO plan

Over the medium-term, Hero Cycles is looking to become only the second Hero-branded company to go public. Munjal’s cousin, Pawan Munjal, is the promoter of Hero MotoCorp, the only Hero-branded company on the stock exchanges and also the country’s biggest manufacturer of two-wheelers.

Asked when Hero Cycles would debut on the stock exchanges, Munjal said, “I cannot give you a timeline but a lot can happen by FY24.”

The two acquisitions lined up by the company will help it reach the targeted turnover for the year. This year (FY22) the group will look to reach Rs 4,400-4,500 crore, which would be a growth of 33 percent over FY21’s turnover of Rs 3,300 crore.

“In FY23, the turnover should touch Rs 6,500 crore,” Munjal said.