Hero FinCorp pre-IPO placement has concluded a INR 259.99 crore Pre-IPO placement, issuing 18,57,071 equity shares at INR 1,400 per share through private allotment. The placement is a strategic move ahead of its long pending INR 3,668 crore IPO which got SEBI approval on 22 May 2025.
Hero FinCorp Pre-IPO Placement: Breakup
The equity was priced at INR 1,400 per share—INR 1,390 above the face value of INR 10. This shows robust investor interest and values Hero FinCorp at around INR 18,482 crore. Despite tough industry conditions of rising NPAs and declining profitability, the placement saw participation from a mix of institutional and high net worth investors.
Navigating Uncertainty Before IPO
Hero FinCorp private placement is a big milestone for Hero FinCorp as the company faced regulatory scrutiny for several months earlier this year. Its IPO DRHP was filed in August 2024 but got delayed due to SEBI’s examination of alleged breach of 200-investor cap under the Companies Act, 2013. Hero FinCorp denied any violation and after several months of review, SEBI gave approval in late May 2025.
Hero FinCorp IPO Structure and Strategy
The upcoming IPO will raise INR 3,668.13 crore, comprising fresh issue of INR 2,100 crore and offer for sale (OFS) of INR 1,568.13 crore. Hero MotoCorp shareholders will get priority quota allotment. The company will list on both BSE and NSE.
Offer for Sale Participants:
- AHVF II Holdings Singapore II Pte. – INR 1,000 crore
- Apis Growth II (Hibiscus) Pte. – INR 250 crore
- Otter – INR 313.36 crore
- Link Investment Trust (Vikas Srivastava) – INR 4.77 crore
The fresh issue proceeds will be used to augment Tier-I capital and fund future lending activities to increase the company’s capital adequacy and regulatory compliance.
Operational and Financial Snapshot
Hero FinCorp is a diversified non-banking financial company (NBFC) with retail lending constituting 65% of its INR 51,820 crore AUM (as of 31 March 2024) followed by MSME and corporate lending. The company has a large physical and digital presence with over 4,200 dealer touchpoints and reach across 18,600+ pin codes in India.
Despite its large network and recent revenue growth, the company is facing asset quality issues. In Q1 FY25 alone loan write-offs jumped 80% YoY to INR 2,180.9 crore, raising concerns about credit risk.
| Fiscal Year | Revenue (INR Cr) | Net Profit (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% |
Strategic Fundraising Beyond Equity
To tide over the capital requirements in the event of delayed IPO timelines and a tightening domestic credit environment, Hero FinCorp also got a USD 200 million (~INR 1,707 crore) syndicated loan led by DBS Bank. The loan has dual tenors of 3.25 and 5 years and is similar to the debt strategy adopted by other Indian NBFCs like Piramal and Tata Capital.
IPO Ready, but Challenges Remain
Hero FinCorp’s ability to raise INR 259.99 crore in a volatile credit environment is a thumbs up for its long term business. But the road to public market success is dependent on two key factors: asset quality management and profitability improvement in the coming quarters.
SEBI has given the nod, now the IPO is imminent. But the real test is how public investors react to Hero FinCorp’s mixed numbers, high NPAs and the overall NBFC sector stress. The equity and debt capital raise buys the company some time to stabilise before it enters the high stakes public market.
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