Hero FinCorp, the financial services division of Hero MotoCorp, plans to raise ₹4,000 crore through an Initial Public Offering (IPO). This announcement was made by the company on May 29.
The IPO will include both new shares and shares offered for sale by current shareholders.
According to a company filing, the Board of Directors of Hero FinCorp Limited, a subsidiary of Hero MotoCorp Limited, approved the IPO plan during a meeting on May 29, 2024.
In their statement, Hero FinCorp said, “The Board of Directors of the Company in their meeting held on May 29, 2024, has considered and approved the Initial Public Offering (IPO) of the equity shares of face value of ₹10 each. This includes a fresh issue of equity shares aggregating up to ₹40,000 million and an Offer for Sale of Equity Shares by certain existing and eligible shareholders of the Company.”
Hero FinCorp offers various financial services, such as education loans, small and medium-sized business loans, and two-wheeler financing. The lender is present at about 2,000 retail finance points within Hero MotoCorp’s network, as well as in over 4,000 cities and towns across India.
Earlier, in October 2023, Moneycontrol reported that the IPO could target as much as ₹4,000 crore, according to sources familiar with the matter.
Hero FinCorp has chosen up to eight investment banks to manage the ₹4,000 crore IPO in 2024, as reported by Moneycontrol on October 17, 2023.
The Munjal family, who are the promoters, own around 35-39% of Hero FinCorp. Private equity investors Apollo Global, ChrysCapital, Credit Suisse, and some Hero MotoCorp dealers hold the remaining shares. Hero MotoCorp controls approximately 40% of Hero FinCorp.
On Thursday, Hero MotoCorp’s share price was trading at ₹5,128.00 per share on BSE. According to technical analysts, Hero MotoCorp’s share prices have not seen significant movement in recent weeks. However, despite broader market profit booking, the prices have outperformed, showing time-wise consolidation. A move beyond ₹5,250 could resume momentum towards ₹5,500, with ₹5,000 as immediate support. Hero MotoCorp’s stock has risen 13% in May and is up 26% year-to-date.
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