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Hero FinCorp, the financial arm of Hero MotorCorp, India’s largest two-wheeler manufacturer, has given a green signal for a 4000 crore rupees IPO. The company said in a statement released on 29th May 2024.
Hero Fincorp IPO.
The Hero Fincorp IPO will have a fresh issue and an offer for sale by the existing shareholders. This means that the company will issue some fresh shares for new investors to buy and sell the stake of some current shareholders of Hero Fincorp.
Hero Fincorp is primarily looking for funds from a fresh source, so they have a fresh share component of Rs 4,000 crore. The number of shares and amount of the ‘offer for sale’ component is not yet confirmed.
Current Hero Fincorp’s Shareholding.
Hero Motor Corp owns around 40 percent of the shares in Hero Fincorp. While the promotors i.e. Munjal Family hold around 35-39 %. The remaining stake is held by investors like Apollo Global, ChrysCapital, Credit Suisse, and some dealers of HeroMoto Corp.
It will be interesting to see how Hero Motor Corp Shares react to this announcement in the next 2-3 months.
About Hero Fincorp.
Hero Fincorp is a Non-Banking Financial Company(NBFC) that deals in consumer and financial lending. It offers personal loans (including medical and education loans). They also offer two-wheeler loans and home loans in the affordable segment. One of their major business comes from financing SMEs (Small and Medium Enterprises).
They carry out their operations in around 4,000 cities in India and have 2000 Touchpoints with Hero Motor Corp in India.
Hero Fincorp Financial Results FY 23-24
The Interest Income for FY 24 was Rs 6,977.3 Crore which is a 23% increase from the previous year’s interest income of Rs 5,663.69 crore.
The Profit After Tax (PAT) has grown by 24% from Rs 457.3 crore in FY23 to Rs 601.92 crore in FY24 indicating a significant profitable growth in operations for Hero Fincorp.
Their Basic EPS has also grown at the same rate of Rs 24% from 35.92 per share in FY 23 to Rs 47.28 per share in FY 24.
The Loan book of Hero Fincorp grew by 19.34 % from Rs 36213 crore in FY 23 to Rs 44,929 crore in FY 24.
This suggests an assertive growth in the lending operations of Hero Fincorp and a potential upward demand for its products and services.
Hero Fincorp Improved Its Asset Quality
The Gross NPA has improved significantly in the last 3 years. On March 22, the gross NPA reached 7.94% which caused concern among investors as the asset quality was deteriorating. On March 23, the asset quality improved to 5.38%. By the end of FY 23-24, the Gross NPA reduced to 4.26%.
This signifies a huge positive trend in the enhancement of credit quality and risk management becoming more effective year after year. Hero Fincorp has made an effort to increase the financial health of its balance sheet.
Is Hero FinCorp A Listed Company?
Hero Fincorp Ltd is not a listed company, however, it is actively traded in the unlisted share market. With the increased operations and credit quality, investors have a gainful opportunity to invest in the current hero fincorp share price before its IPO.
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