Hero FinCorp Filed DRHP: Most Awaited IPO

Hero FinCorp has officially filed a Draft Red Herring Prospectus (DRHP) with the SEBI for its upcoming Initial Public Offering (IPO). The public issue is a 100% book-built offer. This upcoming IPO is offering a fresh issue worth up to Rs 2100 Crore of equity shares and an offer for sale of worth up to Rs. 1568.13 Crore equity shares, this sums up aggregating total size of up to Rs 3668.13 Crore equity shares. The face value mentioned by the company is Rs. 10 for each share. This new IPO issue is being made through the book-building process with a reservation of not more than 50% of the new offer reserved for Qualified Institutional Investors, not less than 15% reserved for NII and the remaining 35% or more reserved for Retail Individuals. So, when will the IPO come? The Application for public issue and subscription opening/closing dates and other important dates will be declared soon. However, the public issue price band at which you can bid will be declared soon.

About Hero FinCorp Limited

Hero FinCorp Limited is an NBFC with a diversified portfolio of financial products and an increased focus on the emerging Retail and MSME segments in India. As of March 31, 2024, Hero FinCorp's AUM was ₹ 5,182.08 crores, comprising 65.08% from Retail and 20.80% contribution from MSME Loans. "Hero" is an established brand, and the company leverages the broad reach of a distribution network of Hero MotoCorp Limited for two-wheeler loans. Hero FinCorp focuses on underserved communities with a customer base of 11.80 million and uses digital technology throughout its operations to bring about efficiency, improve the customer experience, and facilitate better decision-making.

Hero FinCorp India IPO Objectives

Hero FinCorp intends to use the net proceeds from the fresh issue for strengthening its Tier-I capital base. This will adequately position the company to meet its future capital requirements for onward lending, in keeping with its strategic objectives as outlined by the company to support its growth. A portion of the proceeds would also be used to defray the offer expenses, according to the prospectus filed by the company.

Financials of the Company

As of March 31, 2024, the company's assets rose to ₹53,204.66 crores, showing an increase of approx 22.4% compared to March 31, 2023. Revenue grew significantly by 30.7%, reaching ₹7,479.38 crores. Profit after tax saw a growth of 32.7%, totalling ₹637.04 crores. However, total borrowing also increased by 26.1%, amounting to ₹46,169.48 crores from Rs 36,627.86. These figures demonstrate substantial growth in key financial areas, although the rise in borrowing indicates a need to monitor debt levels closely.

Lead manager(s), Registrar of IPO & Promoter(s) of the Company

The issue has been managed by several giants: JM Financial Limited, Axis Capital Limited, BofA Securities India Limited, HDFC Bank Limited, HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited, Jefferies India Private Limited, and SBI Capital Markets Limited. For the company, the registrar dealing with the issue is responsible for its management is, Link Intime India Private Limited. Hero MotoCorp Limited, Bahadur Chand Investments Private Limited, Hero InvestCorp Private Limited, Brijmohan Lal Om Parkash (Partnership Firm), Dr Pawan Munjal, Renu Munjal, Suman Kant Munjal, Renuka Munjal, and Abhimanyu Munjal are the promoters of the company.