Hero FinCorp: Hero Fin could raise over Rs 5,000 cr in IPO, largest by an NBFC

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Mumbai: Hero FinCorp, the financial services arm of India’s leading two-wheeler maker Hero MotoCorp, will likely file its draft red herring prospectus (DRHP) next month for an initial public offering (IPO), according to investment banking sources.

The share sale could be worth ₹5,300 crore to ₹5,500 crore, making it the largest ever public issue by a non-banking financial company (NBFC).

Hero FinCorp’s board approved the public issue on Wednesday.

The IPO will consist of a fresh share issue of ₹4,000 crore and an offer for sale of up to ₹1,500 crore by existing shareholders.

An email query sent to Hero FinCorp went unanswered till press time.ICICI Sec, BofA Sec, Jefferies, JM Fin, HSBC Sec, UBS, SBI Cap and HDFC Bank are the bankers to the proposed issue, said sources.

Hero Fin Could Raise Over ₹5k cr in IPO, Largest by an NBFCAgencies

Some of the large IPOs by NBFCs in the past have been from IRFC, Aadhar Housing, PNB Housing and Aptus Value Housing. Their IPOs were worth between ₹2,780 crore and ₹4,633 crore.Hero MotoCorp owns around 41% stake in Hero Fincorp, while the promoters , the Munjal family, own around 38%. The remaining stake is held by private equity investors such as Credit Suisse, Apollo Global, and a few dealers of Hero MotoCorp.

Shares of Hero MotoCorp ended flat at ₹5,142.4 on Thursday in a weak market. Hero FinCorp has rallied over 80% in the past year to around ₹1,800-1,900 in the unlisted market.

Hero FinCorp’s profit after tax in FY24 surged 32% to ₹637 crore from a year ago. The NBFC reported an interest income of ₹7,479 crores in FY24, a jump of 31% over FY23.

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