Hinduja Leyland Finance looks to revive IPO plan

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Mumbai: Hinduja Leyland Finance, the commercial vehicle financing unit of truck maker Ashok Leyland Ltd, is looking to revive its plan for an initial public offering (IPO), two people aware of the development said.

The vehicle financier, which first filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi) in March 2016, planned to raise Rs500 crore of primary capital, according to the draft share sale documents. Investor Everstone Capital also planned to sell a part of its stake through the IPO.

Hinduja Leyland Finance, however, deferred its plans to go public despite receiving the markets regulator’s approval.

“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.

“The company is relooking at the IPO. They are likely to go for the share sale within this calendar year,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.

The company could look at refiling its draft IPO papers by the end of the current quarter, he said. “They can receive a better valuation in the market today than what they would have received the last time as markets are better and they have also considerably grown their loan book in the last two years,” he added.

The revival of the IPO will also provide an exit route for Everstone Capital, which had invested Rs200 crore in the company in 2013, said the second person cited above, also requesting anonymity.

In November, Everstone Capital sold a 4.68% stake in Hinduja Leyland Finance to its parent for Rs225 crore, paring its stake to less than 10%. The stake sale valued the company at Rs4,800 crore.

Consequent to the share purchase, Ashok Leyland’s ownership in Hinduja Leyland Finance increased to 61.9%, according to the filing.

Everstone Capital declined to comment. Emails sent to Sachin Pillai, chief executive officer and S. Nagarajan, chairman of Hinduja Leyland Finance, enquiring about the company’s plans did not elicit any response.

Hinduja Leyland Finance recorded revenue of Rs1,486.31 crore in financial year 2016-17, compared with Rs1,145.69 crore in the previous year, according to stock exchange filings by Ashok Leyland. In 2016-17, the firm reported a profit of Rs167.53 crore, as against Rs150 crore in the previous year.

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