Upcoming IPO: Hero FinCorp gets Sebi approval to launch ₹3,668 crore IPO

Hero FinCorp, the financial services arm of two-wheeler maker Hero MotoCorp, has been granted approval by Securities and Exchange Board of India (SEBI) to launch an Initial Public Offering (IPO) valued at ₹3,668 crore, as indicated in a notification from the markets regulator on Wednesday, according to PTI report.

Hero FinCorp is a non-banking financial company (NBFC) that provides a wide range of financial products primarily aimed at retail customers and micro, small, and medium enterprises (MSMEs) in India.

As of March 2024, the NBFC had total assets under management (AUM) amounting to ₹51,821 crore, with retail and MSME lending segments accounting for 65 percent and 21 percent, respectively. Since its establishment in 1991, the company has expanded its customer base to 1.18 crore as of March 2024.

IPO Details

Hero FinCorp IPO consists of a new issuance of equity shares valued at ₹2,100 crore along with an Offer For Sale (OFS) of ₹1,568 crore from investor shareholders, as stated in the Draft Red Herring Prospectus (DRHP).

The shareholders participating in the OFS include AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, Link Investment Trust (represented by Vikas Srivastava), and Otter Ltd.

According to recent updates, Hero FinCorp, which submitted its initial IPO documents to Sebi in August, received its observations on May 22.

In the terminology used by Sebi, receiving observations signifies approval to proceed with the public offering.

As indicated in the draft documents, the funds raised from the new issue will be utilized to bolster the company’s capital to accommodate upcoming financing requirements for lending activities.

The book running lead managers for the anticipated IPO are JM Financial Ltd, BofA Securities India Ltd, HSBC Securities and Capital Markets (India) Private Ltd, ICICI Securities Ltd, Jefferies India Private Ltd, and SBI Capital Markets Ltd.

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