Pawan Munjal's Hero FinCorp Said To Be Readying Stage For ₹4,000 Cr IPO

Hero FinCorp, the financial services unit of Hero MotoCorp, India’s top two-wheeler maker, is preparing for a huge 2024 initial public offering (IPO). The firm has reportedly selected eight banks to assist with the major move.

What Happened: The advisory team comprises JM Financial, BofA Securities, Jefferies, ICICI Securities, HSBC Securities, UBS, SBI Capital and HDFC, Moneycontrol reported, citing sources.

The proposed IPO will include both primary and secondary share offerings, aiming to raise growth capital and provide an exit for some investors. The IPO’s target size is about ₹4,000 crore, but this could change based on market conditions and investor strategies.

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Hero MotoCorp holds a 40% stake in Hero FinCorp, while the promoters, the Munjal family, own about 35%-39%. Private equity investors, including Apollo Global, ChrysCapital, Credit Suisse and some HeroMoto Corp dealers, hold the rest.

The plans come at a time when the automobile giant is under some scrutiny, with CEO Pawan Munjal facing allegations of forgery last week.

Hero FinCorp, established in 1991, primarily offers financing solutions to retail and corporate clients, including two-wheeler financing, term loans, working capital loans, property-backed loans, bill discounting, and leasing.

In fiscal year 2023, the company reported a profit of ₹457.33 crore, a significant turnaround from a loss of ₹195 crore a year earlier. The total revenue from operations also surged to ₹6,003.77 crore from the previous year’s ₹4,440.58 crore. The company’s gross non-performing assets (NPAs) improved to 5.38% from 7.94% in the prior year, while net NPAs decreased to 2.79% from 4.63%.

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