Hinduja Leyland Finance's proposed IPO size expected to be Rs 10-15 bn

The company had dropped its IPO plans worth Rs 5-7 billion in 2016 due to demonetisation

The proposed IPO of Hinduja Leyland Finance, a non-banking finance company (NBFC), is expected to be around Rs 10-15 billion. The company plans to go public this year, said senior officials from Ashok Leyland.

“It (the IPO) will also help discover pricing for us,” said the official from Ashok Leyland, which owns major chunk of Hinduja Leyland Finance.

Addressing the shareholders on Tuesday, Dheeraj Hinduja, chairman, Ashok Leyand said that the future for Hinduja Leyland Finance is bright and the company is planning an IPO this year.

The objective of increasing the shareholding in the finance arm from 57 per cent to 62 per cent is to retain 51 per cent control of the company post-IPO in order to consolidate the operations and grow.

In 2017-18, the company increased its stake in Hinduja Leyland Finance Limited from 57.20 per cent to 61.85 per cent and invested Rs 4.94 billion, according to company's annual report.

It may be noted that Hinduja Leyland Finance had dropped its IPO plans worth Rs 5-7 billion in 2016 due to demonetisation.

“Owing to the uncertainty in the economy on account of demonetisation, the IPO slated for Q3 last year was postponed,” the company had said in July 2017.

Reports said that the revival of the IPO will also provide an exit route for Everstone Capital, which had invested Rs 2 billion in the company in 2013.

In November, Everstone Capital sold 4.68 per cent stake in Hinduja Leyland Finance to its parent for Rs 2.25 billion, paring its stake to less than 10 per cent. The stake sale valued the company at Rs 4.8 billion, according to media reports.

Consequent to the share purchase, Ashok Leyland’s ownership in Hinduja Leyland Finance rose to 61.9 per cent, according to the filing.

Hinduja Leyland Finance recorded a revenue of Rs 20.92 billion in 2017-18 as compared to Rs 14.86 billion in 2016-17. Profit in 2017-18 was Rs 2.52 billion as compared to Rs1.67 billion, in the previous year.

Hinduja Leyland Finance was founded in 2008 as an NBFC. It provides customized finance for utility vehicles, tractors, cars and two-wheelers among other vehicles, focusing on the semi-urban and rural sectors.