Hero FinCorp, the financial services arm of India's largest two-wheeler maker Hero MotoCorp, has shortlisted a syndicate of as many as eight investment banks to launch a mega initial public offer in 2024, multiple industry sources in the know told Moneycontrol.
"This is a big listing in the works. JM Financial, Bofa Securities, Jefferies, ICICI Securities, HSBC Securities, UBS, SBI Capital, and HDFC have been selected as the advisors," one of the persons above told Moneycontrol. UBS completed the global acquisition of Credit Suisse in June 2023.
Two other persons confirmed the list of i-bankers and added that the proposed issue would be a combination of primary and secondary issuance of shares which would mop up growth capital and provide an exit for some of the investors.
The targeted size of the proposed IPO is around Rs 4,000 crs, but that may vary later depending on market conditions and share sale strategies of the investors, one of the two persons added.
It was not immediately clear if more banks would be added later to the deal.
All the three persons above spoke to Moneycontrol on the condition of anonymity.
An email query sent to HeroMotoCorp and HeroFinCorp was left unanswered at the time of publishing this article. Moneycontrol could not elicit an immediate comment from the i-banks.
Also read: Hero FinCorp unlisted stock surges nearly 28% over six weeks
HERO FINCORP: THE KEY SHAREHOLDERS
Hero MotoCorp owns around 40 per cent stake in Hero Fincorp, the promoters, the Munjal family hold around 35-39 per cent while the balance is held by private equity investors like Apollo Global, ChrysCapital, Credit Suisse and some dealers of HeroMoto Corp.
In February 2022, Hero FinCorp Ltd raised Rs 2,000 crore in growth capital from Apollo Management and Hero MotoCorp, among others. Apollo Global Management, committed Rs 937 crore through its Hybrid Value Fund, while the parent, Hero MotoCorp, infused Rs 700 crore.
“This fresh capital infusion will fuel our growth to $10 billion in assets, and enable us to serve over 15 million customers by FY25," said Abhimanyu Munjal, joint managing director and chief executive, Hero FinCorp as part of the official announcement.
HERO FINCORP: THE KEY STATS
A non-banking financial company founded in 1991, Hero FinCorp primarily provides financing to retail and corporate customers through products such as two-wheeler financing, term loans, working capital loans, loan against property, bill discounting, and leasing.
The firm reported a profit of Rs 457.33 crore in fiscal 2023 from a loss of Rs 195 crore in fiscal 2022. The company's total revenue from operations also rose by more than 35 percent, reaching Rs 6003.77 crore compared to Rs 4440.58 crore in the previous year. In addition, gross non-performing assets (NPAs) improved to 5.38 percent from 7.94 percent in the previous year, while net NPAs decreased to 2.79 percent from 4.63 percent.
As of March 31, Hero Fincorp's loan book was around Rs 36,213 crore, with the retail and corporate loan segments accounting for 57 percent and 22 percent, respectively. Hero FinCorp also has a dedicated home finance arm, Hero Housing Finance, a 100% subsidiary.
Also read: MC Interview | ChrysCapital's Kunal Shroff sees bigger trend of larger stake sales and control deals
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