Hero FinCorp's Strategic Journey to IPO
14 Aug, 2023
Introduction:
The Indian financial landscape is abuzz with the imminent IPO of Hero FinCorp, the finance arm of the iconic two-wheeler manufacturer, Hero MotoCorp. With talks about raising a massive Rs. 4,000 crore, this move is set to make waves in the industry.
Ownership Dynamics
The ownership blend of Hero FinCorp is both intriguing and balanced. With Hero MotoCorp boasting a 40% stake and the influential Munjal family holding 30%, the entity carries a legacy. The rest is spread amongst industry giants such as ChrysCapital, Apollo Global, Credit Suisse, and Apis Partners, signifying trust and robust collaboration.
Impressive Track Record:
Financial Year 2022-23 was a landmark for Hero FinCorp. With an interest income reaching Rs. 5,363 crore and a net profit touching Rs. 457 crore, the company has established itself as a force to reckon with. Its loan portfolio, standing at an imposing Rs. 36,000 crore, testifies to its financial acumen and market penetration.
A Look into the Past
Hero FinCorp, originally Hero Finlease, traces its roots back to the era when it was the primary financier for Hero Honda. Post the restructuring of Hero Honda Motors in 2011, the company reinvented itself, marking a phase of robust expansion. This journey saw them diversify into two-wheeler financing and then venturing into SME and corporate financing. The icing on the cake was the acquisition of a housing finance business license in 2017, further expanding their portfolio.
Steering the Ship
Under the visionary leadership of Pawan Munjal, both Hero MotoCorp and Hero FinCorp have witnessed remarkable growth. With revenues of Rs. 8,767 crore for the quarter ending June 30 of the current fiscal year and a YoY growth of 4.5%, their trajectory seems unstoppable.
Current Market Scenario:
In the prevailing unlisted market, Hero FinCorp shares are trading at Rs. 1,200 each, resulting in a market cap of approximately Rs. 14,820 crore. This valuation closely aligns with the anticipated IPO pricing, making it a noteworthy consideration for potential investors. Conclusion: Hero FinCorp's impending IPO is not just about numbers, but about a legacy, trust, and a vision for the future. For those closely observing the financial markets, this is an event to watch out for.
