Hero MotoCorp's associate company gets board's nod for Rs 4,000 crore IPO; here is everything you need to know

Hero MotoCorp shares were up over half per cent on Thursday (May 30) on BSE. The buying interest came after as its associate company, Hero FinCorp, got approval from its board to undertake an initial public offering (IPO) route.

At around 10:06 a.m., shares of Hero MotoCorp traded 0.55 per cent or Rs 28.5 higher at Rs 5,170 apiece on BSE. The market capitalisation of the company at around the same time stood at Rs 1,03,364.38 crore.

"This is to inform you that the Board of Directors of Hero FinCorp Limited (“Hero FinCorp”), an associate company of Hero MotoCorp Limited (“Company”), at its meeting held today i.e. May 29, 2024, has provided its approval to undertake an initial public offering route (“IPO”)," the filing read. 

The filing further said that the IPO would be undertaken by way of a fresh issue and an offer for sale by certain existing and eligible shareholders. 

Additionally, the IPO will consist of a fresh issue of equity shares aggregating up to Rs 4000 crore.  

"This is to inform you that the Board of Directors of the Company in their meeting held on May 29, 2024, has considered and approved the Initial Public Offering (IPO) of the equity shares of face value of Rs 10 each comprising of a fresh issue of Equity Shares aggregating up to Rs 40,000 million and an Offer for Sale of Equity Shares by certain existing and eligible shareholders of the Company," the regulatory filing read.

Source: Zee Busines research 

Hero FinCorp valuation

As per Zee Business research, the IPO could be launched at a valuation of Rs 15,000 crore and the book value is expected at 2.8x FY23 on book value. In January 2022, the company had raised Rs 2,000 crore at a valuation of Rs 12,000 crore in the unlisted market

Hero MotoCorp share price: Past performance 

In a year, shares of Hero MotoCorp have given returns of over 84 per cent against Nifty50's rise of over 21 per cent.

About Hero FinCorp

Hero FinCorp is a subsidiary of Hero MotoCorp. It is an Indian Non-Banking Financial Company (NBFC), pioneering in both consumer finance and commercial lending. Its consumer finance division encompasses a spectrum of services, ranging from facilitating loans for Hero MotoCorp Two Wheelers to extending Loyalty Customer Loans, empowering existing customers with top-up loan options, and offering Loans against Property. 

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