Hero FinCorp — the financial services arm of India’s largest two-wheeler manufacturer, Hero MotoCorp — is raising USD 200 million (~INR 1,707 crore) through a syndicated loan as its much-anticipated INR 3,668 crore initial public offering (IPO) is stuck in the regulatory pipeline.
Hero FinCorp IPO, which was expected to hit the markets in the early quarters of FY25, is facing delays due to regulatory scrutiny. Sources close to the development said SEBI is looking into “some breach of rules” which has stalled the approval process.
The delay is significant as the listing was a key part of Hero FinCorp’s capital raising strategy. The public issue of over INR 3,600 crore was meant to strengthen the company’s lending book, improve leverage ratios and support growth in the competitive NBFC space.
With the IPO delayed, the company has turned to international credit markets. Hero FinCorp has mandated DBS Bank to lead a USD 200 million (~INR 1,707.38 crore) syndicated loan. The company is agile in adapting to funding strategies in the face of regulatory uncertainties.
DBS has already started roadshows in Taipei to attract investors for the deal. Loan pricing is yet to be disclosed but industry observers are looking at comparable deals. For instance, Piramal Finance raised USD 150 million (~INR 1,280 crore) via global bonds in October 2024 at 7.078% yield with 3.32-year tenor.
The proposed loan will have dual tenors—5 years and 3.25 years to offer flexibility in repayment and diversification in investor appetite.
The company will strengthen its core loan book and consumer and commercial lending operations with the proceeds from the syndicated facility. With domestic liquidity tightening and cost of rupee debt rising, dollar loans are a viable option for NBFCs to manage their cost of capital.
Hero FinCorp is not the only one to go global. Other leading Indian NBFCs—Shriram Finance, Tata Capital, Muthoot Finance, and Piramal Finance—have already explored dollar-denominated debt in FY25 to diversify funding sources and reduce borrowing costs.
This is a trend in the making in the Indian lending space where NBFCs are looking outwards to fuel growth and maintain liquidity buffers. Hero FinCorp is not commenting on the IPO timeline but industry experts believe it may take several more months to resolve regulatory issues. Till then, global credit markets will ensure business continuity and growth in retail and SME loan segments.
Nonetheless, this development sends a clear signal — Hero FinCorp is positioning itself proactively amid market uncertainty, choosing financial flexibility over inertia.
Hero FinCorp’s decision to raise USD 200 million through a syndicated dollar loan, while awaiting regulatory nod for its IPO, showcases the company’s resilience and strategic foresight. As the NBFC sector navigates a complex regulatory and funding environment, such moves highlight the importance of global capital access in sustaining domestic growth ambitions.
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