Hero FinCorp’s Rs 3,668 Cr IPO Nod from Sebi Marks a Big Leap; Here Is Why

Hero FinCorp, the financial arm of India’s two-wheeler giant Hero MotoCorp, has secured approval from the Securities and Exchange Board of India (SEBI) for its Rs 3,668 crore initial public offering (IPO). 

The IPO is structured with a fresh issue of equity shares worth Rs 2,100 crore, alongside an offer for sale (OFS) of Rs 1,568 crore by existing shareholders. Prominent investors, including AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, and Otter Ltd, will be diluting part of their stake through the OFS route.

Also Read: India’s State-Owned NBFIs Set for Rapid Growth, Backed by Strong Government Support: S&P Global Ratings | Republic World

Usage of funds

The company revealed that the proceeds from the fresh issue will be spent to strengthen the company’s capital base, enabling it to expand lending operations across retail and MSME segments. This move is seen as part of Hero FinCorp’s strategy to scale up its presence in India’s rapidly growing non-banking financial sector, according to industry analysts.

Listing plans and key advisors

Hero FinCorp plans to list its shares on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The IPO is being managed by a consortium of investment banks, including JM Financial, ICICI Securities, BofA Securities, HSBC, Jefferies India, and SBI Capital Markets.

Grey market buzz

Although the IPO dates and price band are yet to be announced, market speculation has already begun. The Grey Market Premium (GMP) for the IPO hasn’t officially opened, but analysts tracking the space anticipate robust interest, given the company’s strong brand lineage and sectoral momentum.

About the company

Founded in 1991, Hero FinCorp has evolved into a diversified NBFC catering to retail borrowers and small businesses. As of September 30, 2024, the company’s Assets Under Management (AUM) stood at Rs 53,821 crore, with over 85% of its portfolio driven by retail and MSME loans.