Hero FinCorp Gets SEBI Nod for ₹3,668 Crore IPO: Here’s What You Need to Know

Hero FinCorp, the financial services arm of Hero MotoCorp, is gearing up to hit the capital markets with a ₹3,668 crore Initial Public Offering (IPO).

The company has received the green light from the Securities and Exchange Board of India (SEBI) on May 22, marking a significant milestone in its journey toward public listing.

IPO Structure: Fresh Issue + Offer for Sale

The upcoming IPO will consist of two components:

• Fresh equity issuance worth ₹2,100 crore: These funds will be infused into the company to boost its capital base and support future lending operations.
• Offer for Sale (OFS) of ₹1,568 crore: Existing investors, including AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, Link Investment Trust (via Vikas Srivastava), and Otter Ltd, will offload part of their stakes.

Regulatory Milestone

Hero FinCorp had submitted its Draft Red Herring Prospectus (DRHP) to SEBI in August 2024 and recently received regulatory observations, which is the final step before launching the public issue.

Use of Proceeds From IPO

The primary objective of the fresh issue proceeds is to bolster the company's capital adequacy and meet the rising demand for credit, especially in the retail and MSME segments two areas where Hero FinCorp has a strong presence.

Business Overview

Operating as a Non-Banking Financial Company (NBFC), Hero FinCorp offers a wide range of financial products tailored for individuals, micro-enterprises, and SMEs across India. As of March 2024, it reported assets under management (AUM) of ₹51,821 crore, with retail and MSME loans accounting for 65% and 21% of the total AUM, respectively. The company has built a robust customer base of 1.18 crore since its inception in 1991.

Lead Managers and Listing Plans

The IPO will be managed by a consortium of top investment banks, including:

• JM Financial Ltd
• BofA Securities India Ltd
• HSBC Securities and Capital Markets (India)
• ICICI Securities Ltd
• Jefferies India Private Ltd
• SBI Capital Markets Ltd

Post-IPO, the shares will be listed on both the BSE and NSE.

Read More: Upcoming IPOs This Week: 4 Mainboard and 5 SME IPOs to Hit Dalat Street.

Conclusion

Hero FinCorp’s ₹3,668 crore IPO, cleared by SEBI, includes both a fresh issue and an offer for sale. The proceeds from the fresh issue are planned to be used to strengthen the company's capital base and support its lending operations. With its DRHP filed and observations received, the company has completed the necessary regulatory steps to proceed with the public issue.

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