Hero Group’s NBFC arm, Hero FinCorp received the long-awaited green signal to launch its IPO from the Securities and Exchange Board of India (SEBI). The approval, issued on 22 May 2025, marks the culmination of months of regulatory wrangling, internal restructuring, and capital augmentation—clearing the path for one of the largest NBFC public issues in recent times.
đź“ŚHero Fincorp IPO Snapshot: Structure and Scale
Hero FinCorp IPO, first filed with SEBI on 5 August 2024, will raise INR 3,668.13 crore through a combination of Fresh Issue and Offer for Sale (OFS):
- Fresh Issue: INR 2,100 crore
- Offer for Sale: INR 1,568.13 crore
- Listing Exchanges: BSE and NSE
🏢 Hero FinCorp: The Powerhouse Behind the IPO
A subsidiary of Hero MotoCorp, the world’s largest two-wheeler manufacturer, Hero FinCorp has evolved into a key player in India’s financial services sector. Operating as an NBFC, it offers a diverse portfolio comprising:
- Retail Loans – 65.08% of AUM
- MSME Loans – 20.80%
- Corporate & Institutional Finance (CIF) – Balance
As of 31 March 2024, the company managed Assets Under Management (AUM) worth INR 51,820.81 crore. With 4,257 dealer touchpoints across over 2,000 Indian cities and coverage of 18,603 pin codes, Hero FinCorp’s distribution network is unmatched among NBFCs.
đź’ą Financial Performance
Hero FinCorp’s trajectory over the last three years reflects a dramatic turnaround:
| Fiscal Year | Revenue (INR Cr) | Net Income (INR Cr) | Net Margin (%) |
|---|---|---|---|
| FY22 | 4,241.87 | (191.90) | -4.52 |
| FY23 | 5,719.60 | 479.95 | 8.39 |
| FY24 | 7,479.38 | 637.05 | 8.52 |
From a net loss in FY22, the company rebounded with solid margins and operating scale. However, credit quality remains a concern, with loan write-offs surging 80% YoY to INR 2,180.9 crore in Q1 FY25—raising red flags around rising Non-Performing Assets (NPAs)
⚖️ Regulatory Hurdles
SEBI’s nod follows scrutiny around Hero FinCorp’s pre-IPO private placements, with allegations of breaching the 200-investor limit under the Companies Act, 2013. The regulator’s observation delayed the IPO for several months.
Hero FinCorp firmly denied any violations, stating it had never exceeded the investor cap in any financial year. SEBI eventually cleared the issue but may continue to closely monitor post-listing compliance and disclosures.
Facing uncertainty around the IPO timeline, Hero FinCorp executed an INR 310 crore Pre-IPO placement in May 2025 at INR 1,400 per share—valuing the firm at INR 18,482 crore post-money.
Key Investors included:
- Shahi Exports – INR 69 crore
- Vattikuti Ventures – INR 50 crore
- RVG Jatropha Plantation – INR 50 crore
- Sehgal Trust – INR 30 crore
Simultaneously, the firm secured a USD 200 million syndicated loan from DBS Bank to fund operations and liquidity amid tightening domestic credit.
Shareholding and OFS Details
Pre-IPO Major Shareholders (Fully Diluted Basis):
| Shareholder | % Holding |
|---|---|
| Hero MotoCorp Limited | 39.56% |
| Bahadur Chand Investments Pvt Ltd. | 15.72% |
| BMOP (Partnership Firm) | 8.24% |
| Otter Limited | 7.82% |
| Hero InvestCorp | 2.08% |
Offer for Sale Contributors:
| Selling Shareholder | Amount (INR Cr) |
|---|---|
| AHVF II Holdings Singapore II Pte. Ltd. | 1,000.00 |
| Apis Growth II (Hibiscus) Pte. Ltd. | 250.00 |
| Otter Limited | 313.36 |
| Link Investment Trust (Vikas Srivastava) | 4.77 |
🏦 Utilization of Net Proceeds
The INR 2,100 crore fresh issue will be used exclusively to strengthen Hero FinCorp’s Tier-I Capital base, supporting future lending and ensuring compliance with RBI’s capital adequacy norms. The entire proceeds are earmarked for business expansion and regulatory buffer.
🆚 Industry Landscape
Hero FinCorp operates in a densely competitive NBFC environment, contending with:
- Bajaj Finance (diversified lending giant)
- Cholamandalam Finance (vehicle lending)
- Muthoot Finance (gold loans)
- Tata Capital and Piramal Finance (corporate and housing finance)
What sets Hero FinCorp apart is its AI-driven credit models, embedded distribution through Hero MotoCorp, and digital loan platforms—creating a formidable mix of reach and agility.
🧠Outlook
Post-listing, the company aims to:
- Improve capital adequacy ratios
- Expand into new retail and SME lending verticals
- Invest in fintech and digital infrastructure
- Fortify resilience in a cyclical credit environment
đź“° Final Word
Hero FinCorp IPO approval is more than a regulatory milestone—it is a strategic inflection point for one of India’s most promising NBFCs. As the financial services industry contends with regulatory overhauls, rising costs of capital, and digital disruption, Hero FinCorp IPO offers public investors a rare window into a digitally agile, two-wheeler ecosystem-anchored lending powerhouse.
But with opportunity comes scrutiny. The company’s asset quality, regulatory compliance, and strategic independence from Hero MotoCorp will be key litmus tests post-listing. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.
Will the existing share holders get preference in IPO Application. If yes which is the holding date.