Hero FinCorp IPO

Hero FinCorp IPO Details

Hero FinCorp IPO Date

According to the offer document filed by the company with the SEBI, the Hero FinCorp IPO’s opening date – in other words, the Hero FinCorp IPO launch date – is yet to be announced. The Hero FinCorp IPO closing date is yet to be announced. After this, investors will be updated about the allotment status on a date which is yet to be announced.

Investors, who have been allotted shares, can expect them to be credited to their demat account on a date that is yet to be announced. The Hero FinCorp IPO listing date is yet to be announced. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

Hero FinCorp IPO Price Band

The IPO is a fresh issue as well as an offer for sale. The Hero FinCorp IPO price band is yet to be announced. Interested investors can choose a price within this band to apply for the IPO. 

The Hero FinCorp IPO listing price is yet to be announced. The listing price is the price at which a company’s shares debut on the stock exchanges.

Hero FinCorp IPO Lot Size

The Hero FinCorp IPO details have not been declared. The Hero FinCorp IPO lot size is yet to be announced and an investor can apply for a minimum of 1 lot. Meanwhile, the Hero FinCorp IPO issue size is approx ₹3,668 crore. 

About Hero FinCorp

Incorporated in 1991, Hero FinCorp Limited is a scaled NBFC (Non Banking Financial Company) in India that offers retail, MSME (Micro, Small, and Medium Enterprises) and CIF loans. 

It provides vehicle, personal, and mortgage loans under its umbrella of retail finance. Under the MSME category, it offers secured loans against property and construction finance, and unsecured loans in the form of business loans and supply chain finance. It also offers secured loans to corporate & institutional customers like promoters, holding companies and operating entities of large corporations under its CIF wing. 

It benefits from the long standing heritage of the “Hero” brand as Hero MotoCorp Limited holds a 41.19% share in the company. In FY24, it was the largest two wheeler manufacturer in India in terms of domestic unit sales of two-wheeler. 

It caters to the expanding yet underpenetrated customer segment called “Aspiring India” within the annual income range of ₹0.20 to ₹1.00 million, which made up 72% of its retail customers in FY24. It reaches its customers with a team of 8,313 active field agents from 1,228 outsourced field agencies, outsourced call centers staffed with 545 executives, an in-house team of 5,653 employees, and 4,257 Hero MotoCorp Limited dealers and sub-dealers as of 31 March 2024. 

Its funding sources include non-convertible debentures, commercial papers, term loans, working capital facilities, and external commercial borrowings from financial institutions. 

Between FY22 and FY24, it saw a CAGR rise of 16% in its AUM (Assets Under Management). Moreover, the number of customer households in the income range that it caters to are expected to grow from 103 million in FY22 to 181 million in FY30, which could benefit the company.

And now, Hero FinCorp Limited is coming out with its initial public offer (IPO). The total IPO issue size is ₹3,668 crore comprising fresh issue, aggregating to ₹2,100 crore, as well as an offer for sale, aggregating to ₹1,568 crore.  Its shares will be listed on the NSE and BSE.

Company Name:  Hero FinCorp Limited

Company Established On: 1991

Company Type: Private

CEO/MD:  Abhimanyu Munjal

Financial snapshot

Hero FinCorp IPO Analysis

Strengths and opportunities

1. Diversified product offering catering to the large and attractive retail and MSME customer segments.
2. Benefits from Hero MotoCorp’s customer base by leveraging its extensive two-wheeler distribution, which covers 4,257 dealer touchpoints and 18,603 pin-codes across 36 states and Union Territories in India as of 31 March 2024.
3. Strong customer franchise acquired through a pan-India distribution network with an overall customer base of 11.80 million customers including 5 million active retail customers, 29,060 active MSME customers and 360 active CIF customers as of 31 March 2024. 
4. Strong cross-selling potential as the average number of lending and non lending products per customer in FY24 was 1.45 and 2.80, respectively. 
5. Well-integrated technology platform that allows it to control its extensive distribution and collections network, thereby offering a customized customer experience.
6. Prudent risk management, robust underwriting, and data analytics capability with an IT and analytics team of 256 employees as of 31 March 2024 and a dedicated technology office in Bangalore. 
7. Strong credit ratings of “AA+ with stable outlook” from CRISIL, ICRA, and CARE along with its commercial papers rated “A1+” by CRISIL, CARE and ICRA as of FY24.

Risks and threats

1. Dependent almost entirely on two-wheeler loans from its promoter - Hero MotoCorp, as they made up 99% of its two-wheeler loans in FY24.
2. Changes in interest rates may affect its treasury operations, causing its net interest income to decline.
3. Unsecured loans comprised 39% of its total AUM in FY24, and the inability to recover such receivables might affect its finances negatively. 
4. Incurred a loss of ₹191 crore in FY22 due to writing off a significant portion of its stage 3 loan. 
5. Inability to secure funding on acceptable terms and at competitive rates may have an adverse effect on its business. 
6. Has experienced a ratings downgrade in the past, and a future downgrade could increase its borrowing costs and adversely affect its ability to obtain funding. 
7. Operates in a highly competitive industry and competes against other NBFCs, Indian and foreign commercial banks, HFCs, small finance banks, microfinance companies and private unorganized and informal financiers in India.
8. Has incurred negative cash flows from operating activities consistently in the last three fiscals. 
9. Has total borrowings of ₹43,917 crore as of 30 June 2024 which imposes certain conditions and restrictions. 
10. Subjected to seasonal trends in the Indian economy. 

How to apply for the Hero FinCorp IPO?

If you are interested to invest in Hero FinCorp IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Hero FinCorp IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app