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Objective of Hero Fincorp IPO
Augmentation of the company’s tier-1 capital base to meet their capital requirements towards onward lending
Company Information
Hero Fincorp is a scaled NBFC that offers a diversified suite of products catered primarily to the growing retail segment and the rapidly formalising MSME customer segment in India. They offer MSME, retail and CIF loans.
Strengths of Hero Fincorp IPO
Scaled non-banking financial company with a diversified product offering catering to the large and attractive retail and micro, small and medium enterprises customer segments.
At Hero FinCorp Limited, The company benefits significantly from the strong track record and reputation associated with the long-standing ‘Hero’ brand. The ‘Hero’ group is widely recognised throughout India and has a strong brand equity as evidenced by its brand rating of AAA- by brand finance in 2024.
Strong customer franchise have been acquired through a pan-India distribution network comprising in-house capabilities and partnerships. The company’s unique, omni- channel customer acquisition model enables them to reach a diverse pool of customers across various demographics, income levels, livelihoods, geographic regions, and credit histories throughout India.
Risks of Hero Fincorp IPO
The company sourced 99.04%, 99.69% and 99.93% of their two-wheeler loans from our Promoter, Hero MotoCorp Limited’s two-wheeler dealership in FY24, FY23 and FY22, respectively. Any decline in demand for Hero two-wheelers may adversely affect the company.
Stage 3 loans amounted to 4.02%, 5.11% and 7.54% of the total gross loan as on March 31, 2024, 2023 and 2022, respectively. Non-payment or default by their customers and their inability to provide contingency for non-performing assets can hurt the business.
The company’s retail finance business depends on new-to-credit borrowers who constituted 26.55%, 34.06% and 46.33% of their total retail assets under management as on March31, 2024, 2023 and 2022, respectively. They may not be able to properly assess the credit of new-to-credit borrowers, and loans extended to such new-to-credit borrowers may accordingly have a higher risk of non-performance or default.
All Financial Information about Hero Fincorp
Particulars (in Rs. million)
Particulars (in Rs. million)
Comparison with peers
| Particulars | Total revenue from operations | Face Value | P/E Ratio | EPS (Basic) | Return on net worth | Net asset value |
|---|---|---|---|---|---|---|
Hero Fincorp | 82,909.04 | 10 | . | 49.94 | 11.05% | 452.92 |
Bajaj Finance Limited | 549,694 | 2 | 28.77 | 236.89 | 18.84% | 1239.03 |
Cholamandalam Finance and Investment company | 191,396.20 | 2 | 34.36 | 41.17 | 17.46% | 233.26 |
Anchor Investor Information
The anchor investor bidding will take place on XX/YY/ZZZZ, one day prior to the opening of the IPO. Up to 60% of the QIB Portion may be allocated by their company, in consultation with the book running lead managers, to the anchor investors. This will be done on a discretionary basis by the company, in consultation with the book running lead managers and in accordance with SEBI ICDR Regulations.
IPO Registrar and Book Running Lead Managers
IPO book running lead manager:
JM Financial Limited
Axis Capital Limited
BoFa Securities India Limited
HDFC Bank India Limited
HSBC Securities and Capital Markets Private Limited
ICICI Securities Limited
Jefferies India Private Limited
SBI Capital Markets Limited
Registrar for the IPO is Link Intime India Private Limited
Business Model
The company earns its revenue through the following sources:
Retail Finance: The company offers retail customers diverse loans. They include vehicle loans, personal loans and mortgage loans.
They offer loans to MSME sector customers. The loans are of two types: secured loans in the form of loans against property and construction finance and 2) unsecured loans in the form of business loans and supply chain finance.
They offer secured loans to corporate and institutional investors such as promoters, holding companies and operating entities of large corporations.
Company Growth Trajectory
The company’s revenue from operations has grown from ₹47,386.54 crores to 82,909.04 crores, registering an impressive 42% growth. Their PAT/loss after tax increased from a loss of ₹1918.98 crores to ₹6370.48 crores in 2024.
Company Market Position
Hero Fincorp is one of the leading providers of loans to the auto sector, MSME customers and to corporate and institutional investors. Being a part fo the Hero Group, they have been able to capture a sizeable market share and establish their brand in the market.
Hero Fincorp Company Profit & Loss
| Particulars (in Rs.Million) | As of 31st March, 2024 | As of 31st March, 2023 | As of 31st March, 2022 |
|---|---|---|---|
Total Income | 83,597.31 | 64,475.31 | 47975.13 |
Profit/(Loss) before tax | 9605.47 | 7352.41 | (2540.28) |
Net profit/(loss) | 6370.48 | 4799.47 | (1918.98) |
EPS% | 50.04 | 37.70 | (15.07) |
EBITDA | 41,238.75 | 29,471.02 | 14,576.85 |
Company Cash flow Statement:
| (in millions) | FY24 | FY23 | FY22 |
|---|---|---|---|
Profit/loss before tax | 9605.47 | 7352.21 | (2540.28) |
Net cash generated from/using operating activities | (92,388.27) | (69,185.22) | (54,117.67) |
Net Cash generated from investing activities | (1,297.93) | (4,741.34) | 8,152.10 |
Net cash generated from financing activities | 87,172.64 | 72,683.02 | 43,641.87 |
Cash and cash equivalent at the end of the year | 987.84 | 7,501.40 | 8,744.94 |
How To Check Allotment Status of Hero Fincorp IPO?
How to check allotment status? You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar — Link InTime India Pvt Ltd. To check the status on the BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt (Equity in this case)
- Select the Issue Name from the drop-down. The issue name is the company’s name, which is Hero Fincorp Ltd
- Enter your application number or PAN number
- Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status
Follow these steps to know the allotment status on the registrar’s website:
- Visit the LinkIntime website
- Choose “Public Issues” from the “Investor Services” drop-down
- Select Hero Fincorp Ltd from the drop-down
- Enter your PAN number or Application number
- Click on “Submit” to know the allotment status
How to Apply for Hero Fincorp IPO?
To apply for Hero Fincorp IPO:
- Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
- Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
- Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
- Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.
Hero Fincorp IPO FAQs
What is the Hero Fincorp Limited IPO?
The Hero Fincorp Limited IPO has an issue size of ₹2100 crores. The IPO opens for subscription on XX/YY/ZZZZ and closes on XX/YY/ZZZZ.
Who is the Registrar for Hero Fincorp Limited IPO?
Link Intime India Limited is the registrar for this IPO.
