Hero FinCorp, the financial arm of India’s leading two-wheeler manufacturer Hero MotoCorp, has given the green light to a ₹4,000 crore IPO, as per a company statement on May 29.
What Happened: The IPO will consist of a fresh issue of shares and an offer for sale by existing shareholders. Moneycontrol had previously reported in October 2023 that the IPO could be around ₹4,000 crore.
Hero FinCorp is a diversified financial services company offering two-wheeler financing, home loans in the affordable housing segment, education loans and small and medium enterprise sector lending. The company operates in over 4,000 cities and towns across India, with nearly 2,000 retail financing touchpoints within Hero MotoCorp’s network.
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In October 2023, Hero FinCorp had reportedly shortlisted a syndicate of eight investment banks for the IPO. Hero MotoCorp holds around 40% stake in Hero FinCorp, with the Munjal family owning 35-39%, and the rest held by private equity investors like Apollo Global, ChrysCapital and Credit Suisse.
Why It Matters: The approval of the ₹4,000 crore IPO by Hero FinCorp is a significant move in the Indian financial services sector. This IPO is expected to provide a substantial boost to the company’s capital base, enabling it to expand its lending operations further. The decision comes at a time when the Indian economy is showing signs of recovery, and there is a growing demand for financial services across various sectors.
Moreover, the IPO will offer an opportunity for existing shareholders, including private equity investors like ApolloGlobal, ChrysCapital, and Credit Suisse, to partially exit and realise their investments. This move is also likely to enhance the visibility and credibility of Hero FinCorp in the market, attracting more investors and customers.
The involvement of a syndicate of eight investment banks highlights the scale and importance of this IPO. It also underscores the confidence of these financial institutions in the growth prospects of Hero FinCorp. As the financial arm of Hero MotoCorp, the largest two-wheeler manufacturer in India, Hero FinCorp is well-positioned to leverage its parent company’s extensive network and customer base to drive its growth.
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