Mumbai: Hero FinCorp Limited (HFCL), the financial arm of the renowned two-wheeler manufacturer Hero MotoCorp, is actively seeking to raise $200 million through a syndicated loan arrangement. This financial initiative has been spearheaded by DBS Bank, which has been appointed to lead the syndication process. Sources familiar with the matter revealed that Hero FinCorp recently conducted a roadshow in Taipei aimed at assessing investor interest in this funding opportunity. These sources requested to remain unnamed due to the confidential nature of the discussions.

The decision to pursue a dollar-denominated loan comes at a time when Hero FinCorp's ambitious plans for an initial public offering (IPO) of 3,668 crore are encountering significant obstacles. The delays are primarily attributed to pending regulatory approvals, which have hindered the company's capital-raising efforts. A knowledgeable insider explained, The dollar loan is essential for supporting the companys loan business. They elaborated that DBS Bank has begun the roadshow in Taipei to facilitate the syndication of this important loan.

While a spokesperson from DBS Bank opted not to provide any comments on the matter, Hero FinCorp has also remained silent in response to multiple inquiries regarding the loan and the status of its IPO. This IPO, which had generated considerable interest, is currently under scrutiny by the Securities and Exchange Board of India (Sebi), which is investigating potential breaches of regulatory rules before it can grant the necessary approvals.

In terms of structure, the syndicated dollar loan is poised to be organized with two distinct tenors: a five-year term and a shorter 3.25-year term. This approach aligns with the strategies observed among non-banking financial companies (NBFCs) in the current fiscal year. Notably, firms such as Shriram Finance, Piramal Finance, Muthoot Finance, and Tata Capital have also successfully tapped into the dollar bond markets to diversify their funding sources and lower borrowing costs.

Though the pricing details for Hero FinCorp's proposed loan have yet to be made public, it is noteworthy that Piramal Finance recently raised $150 million through global bonds in October 2024, achieving a yield of 7.078% with a tenure of 3.32 years. This context emphasizes the competitive landscape in which Hero FinCorp is operating as it seeks to bolster its financial position amidst ongoing regulatory challenges.