RBI's fine on Hero FinCorp, about 17 paise per ₹1 lakh it lent
RBI fines Hero FinCorp 6 days before IPO approval lapses
The RBI has fined Hero FinCorp ₹10 lakh for charging some borrowers too much interest. The fine was made public on 24 September.
A fine just before an IPO sounds bad. But Hero FinCorp had ₹58,163 crore of loans in September 2025, so ₹10 lakh is about 17 paise for every ₹1 lakh it had lent.
Well, it is not the first fine. In May 2024, the RBI fined it ₹3.10 lakh for not giving borrowers their loan terms in a vernacular language they understand.
The bigger problem is time. SEBI approved the IPO on 22 May 2025. An approval lasts 12 months, so it should have run out in May 2026. But in April, SEBI gave a one-time extension to 30 September 2026 to every approval running out between April and September, because of the Middle East conflict. The fine came 6 days before that deadline.
The IPO has also shrunk. Hero FinCorp filed for ₹3,668 crore in July 2024. In June and July 2025, it sold ₹310 crore of shares to 13 investors at ₹1,400 each, and cut the IPO to ₹3,358 crore. Of that, ₹1,790 crore is new shares for the company. The other ₹1,568 crore goes to existing shareholders selling their shares, led by AHVF II Holdings with ₹1,000 crore.
Those 13 investors were told that there was no guarantee the IPO would happen.
And the business has slipped. It made a ₹130.8 crore loss in the 6 months to September 2025, after a ₹86.8 crore profit a year earlier.
If the IPO does not open by 30 September, it has to file its draft papers with SEBI again, and the new papers would have to mention this fine.
Hero FinCorp has until 30 September to open its IPO
Hero FinCorp's IPO steps and its 2 RBI fines. The latest fine came 6 days before the deadline.
RBI press releases; SEBI circular; Hero FinCorp IPO papers · May 2024 to Sep 2026
Almost half of Hero FinCorp's IPO goes to sellers
Where the IPO money goes, as filed in July 2024 and as updated in November 2025. Sellers get ₹1,568 crore of the ₹3,358 crore, or 47%.
₹ CRORE
New shares, for Hero FinCorpAHVF II Holdings, sellingOther sellers
New shares: money that goes into Hero FinCorp. Sellers keep what they get.
Hero FinCorp DRHP and addendum (SEBI) · Jul 2024 and Nov 2025
Hero FinCorp went from a ₹637 crore profit to a loss
Hero FinCorp's profit after tax, by year and by half year. Profit fell to ₹110 crore in FY25, and the latest half year is a ₹130.8 crore loss.
PROFIT AFTER TAX, ₹ CRORE
A ₹130.8 crore loss, against a ₹86.8 crore profit a year earlier
FY is the year to March. The last 2 bars cover 6 months each, so they are not comparable with the full years.
Hero FinCorp DRHP addendum, restated consolidated accounts · FY23 to 6 months to Sep 2025
Sources
- RBI press release 2026-2027/1180, 24 September 2026: order dated 22 September 2026, ₹10 lakh penalty on Hero Fincorp under the Fair Practices Code for Lenders, Charging of Interest; inspection with reference to its financial position on 31 March 2025; 'The company collected excess interest from certain loan accounts'
- RBI press release, 24 May 2024: order dated 22 May 2024, ₹3,10,000 penalty on Hero FinCorp; inspection with reference to 31 March 2023; loan terms not conveyed in writing in the vernacular language understood by borrowers
- SEBI circular, 7 April 2026, One-time relaxation with respect to validity of SEBI Observations: issues open within 12 months of observations under ICDR regulation 44(1); letters expiring 1 April to 30 September 2026 extended to 30 September 2026
- Hero FinCorp, addendum to the DRHP of 31 July 2024, filed with SEBI 28 November 2025: SEBI final observation letter dated 22 May 2025; pre-IPO placements of 22,14,277 shares at ₹1,400 to 13 allottees on 13 June and 8 July 2025 (₹309.99 crore), with allottees told there is no guarantee the offer will proceed; fresh issue cut from ₹2,100 crore to ₹1,790 crore; offer for sale ₹1,568.13 crore (AHVF II Holdings Singapore II ₹1,000 crore, Otter ₹313.36 crore, Apis Growth II ₹250 crore, Link Investment Trust ₹4.77 crore); 9,119 shareholders and a risk factor added on SEBI's observations about the build-up of its equity capital; AUM ₹58,162.5 crore at 30 September 2025; restated loss ₹130.76 crore for the 6 months to September 2025 against a ₹86.78 crore profit a year earlier
- Hero FinCorp, Draft Red Herring Prospectus dated 31 July 2024 (SEBI): IPO of up to ₹3,668.13 crore, a ₹2,100 crore fresh issue and a ₹1,568.13 crore offer for sale