Hero FinCorp raises Rs 260 Cr in pre-IPO round, trims total issue size to Rs 3,408 Cr

Hero FinCorp, the financial services division of two-wheeler manufacturer Hero MotoCorp, has raised Rs 260 crore in a pre-IPO placement round.

This fund mobilisation led to a reduction in fresh issue size to Rs 1,840 crore from the earlier planned Rs 2,100 crore.

The total IPO size now stands at Rs 3,408 crore, which includes a Rs 1,568 crore offer-for-sale (OFS) by existing investors. This marks a reduction from the earlier planned Rs 3,668 crore.

Those selling shares in the OFS are—AHVF II Holdings Singapore II Pte. Ltd, Apis Growth II (Hibiscus) Pte. Ltd, Link Investment Trust (through Vikas Srivastava) and Otter Ltd.

In the pre-IPO round executed on June 5, Hero FinCorp entered into investment agreements with 12 investors, allotting 18.57 lakh shares at Rs 1,400 per share on June 13, raising Rs 259.99 crore, according to a public announcement by the company.

Under this, the company allotted shares worth Rs 69 crore to Shahi Exports, RVG Jatropha Plantation (Rs 50 crore), Mohan Exports (Rs 25 crore), and AP Properties (Rs 22 crore).

Additional participants in the round were Vivek Chaand Sehgal, Paramount Products, Tiger Laser Pte, Virender Uppal, Laksh Vaaman Sehgal, Renu Sehgal Trust, Yugal Chit Fund, and LC Hercules (Cayman).

In May, the company received the market regulator SEBI's nod to float its IPO.

Going by the draft papers, proceeds from the fresh issue will be used to increase the company's capital to meet future funding needs for lending activities.

Hero FinCorp is an NBFC offering a diversified suite of financial products catered primarily to the retail, micro, small and medium enterprise (MSME) customer segments in India.

As of March 2024, the NBFC firm had assets under management (AUM) of Rs 51,821 crore, of which retail and MSME loan verticals contributed 65 per cent and 21 per cent, respectively. Since the company's inception in 1991, its customer base has grown to 1.18 crore as of March 2024.