Tea Post Files Draft Papers for IPO...
14 Jun, 2025
The Securities and Exchange Board of India (SEBI) has given Hero FinCorp, the financial services division of the massive two-wheeler company Hero MotoCorp, a regulatory license to begin an initial public offering (IPO) with a target of generating ₹3,668 crore. The IPO includes an Offer for Sale (OFS) of ₹1,568 crore by current shareholders, such as AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, Link Investment Trust, and Otter Ltd., in addition to a new stock issue valued at ₹2,100 crore.
Founded in December 1991 as Hero Honda FinLease Ltd, Hero FinCorp has grown into a diversified non-banking financial company (NBFC) offering a wide range of financial products primarily targeting retail customers, micro, small, and medium enterprises (MSMEs), and affordable housing segments. The company controlled ₹51,821 crore in assets as of March 2024, with 1.18 crore customers and retail and MSME loans accounting for 65% and 21% of total assets, respectively. The money raised from the IPO will be used by the business to increase its capital base so that it can facilitate further lending operations.
The public offering would consist of an Offer For Sale (OFS) of ₹1,568 crore by current investors and a new equity issue of ₹2,100 crore. AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, Link Investment Trust (via Vikas Srivastava), and Otter Ltd. are among the OFS participants. The proceeds from the new issuance will be utilised to strengthen the company's financial foundation, enabling future loan operations and business expansion, as stated in the Draft Red Herring Prospectus (DRHP).
The company plans to utilize the funds raised from the fresh issue to strengthen its capital adequacy, supporting its lending activities and future expansion. This capital infusion is expected to help Hero FinCorp maintain its competitive edge in India’s rapidly growing retail and MSME lending market.
The IPO market in India has faced headwinds due to geopolitical tensions and global trade disputes, which have dampened investor confidence and led to a 5% decline in the total value of IPOs compared to the previous year, with a 31% drop in the number of offerings. In spite of this, Hero FinCorp's initial public offering (IPO) is well-positioned to benefit from India's rising need for retail and MSME finance. The company’s recent financial disclosures indicate a rise in loan write-offs, which may be a point of concern for investors, but the overall growth trajectory remains positive.
Hero FinCorp’s upcoming ₹3,668 crore IPO marks a significant milestone for the financial services arm of Hero MotoCorp as it seeks to expand its lending capabilities and deepen its market presence. Alongside other major IPOs, such as HDB Financial and Vikram Solar, Hero FinCorp’s public listing underscores a robust IPO pipeline in India’s capital markets, despite global economic uncertainties. Investors will be keenly watching the subscription trends and post-listing performance of these offerings in the coming weeks.
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