Shivalaya Construction and Hero FinCorp File IPO Plans to Strengthen Balance Sheets

Shivalaya Construction Ltd. and Hero FinCorp Ltd. have moved forward with plans to enter the primary markets, marking two significant public offerings across the infrastructure and non-banking financial sectors. Both companies have filed draft papers with the Securities and Exchange Board of India (SEBI), outlining their fundraising strategies and objectives.

Shivalaya Construction: Debt Reduction in Focus

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New Delhi-based Shivalaya Construction has submitted its Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO). The issue will consist of a fresh equity sale worth ₹450 crore, alongside an offer-for-sale (OFS) of 2.48 crore shares by existing promoters. The company has also left the door open for a potential pre-IPO placement of up to ₹90 crore, which could reduce the size of the fresh issue.

The DRHP states that approximately 340 crore of the new revenue will be used for debt repayment, with the remaining funds designated for general business needs.  The company owed ₹3,048 crore in outstanding debt as of March 2025.

Established in 1997, Shivalaya Construction has built a strong presence in engineering, procurement, and construction (EPC), with a focus on roads, highways, and bridges. By July 31, 2025, the company had completed 41 projects across 19 states and union territories, including 31 road EPC contracts, four hybrid annuity projects, and six other EPC undertakings.

Its track record includes delivering more than 2,700 lane kilometres of road and highway projects, while another 1,500 lane kilometres remain under construction. The firm’s order book stood at ₹3,627 crore in July 2025, with nearly 57% of contracts awarded by government nodal agencies.

For the year ended March 2025, Shivalaya Construction reported revenue of ₹3,124.5 crore and a net profit of ₹343.8 crore, reflecting declines of 11.7% and 41.6% year-on-year, respectively. IIFL Capital, Axis Capital, and JM Financial are serving as the book-running lead managers.

Hero FinCorp: Strengthening Capital Base

Hero FinCorp, the financial arm of the Hero Group, has also filed for an IPO worth ₹3,668.13 crore. The issue will include a fresh equity raise of ₹2,100 crore and an OFS of ₹1,568.13 crore. The offering will be fully book-built, with a portion reserved for anchor investors, including allocations for domestic mutual funds.

The proceeds from the fresh issue will be used primarily to boost Hero FinCorp’s Tier-I capital base. This step is aimed at supporting future growth and meeting capital requirements linked to lending expansion.

Several existing shareholders are offloading stakes via the OFS. AHVF II Holdings Singapore II will sell shares worth up to ₹1,000 crore, representing about 64% of the total OFS. Apis Growth II (Hibiscus) will offload shares worth ₹250 crore, while Otter will divest equity valued at ₹313.36 crore.

Hero MotoCorp remains the key promoter of Hero FinCorp, holding 52.43 million equity shares, equivalent to 41.19% of the company’s paid-up capital. Following the conversion of preference shares, its fully diluted holding will stand at nearly 39.6%.

Outlook

The two initial public offerings highlight the robust capital-raising activities in India's finance and infrastructure sectors. Hero FinCorp wants to ensure long-term growth by strengthening its capital position, while Shivalaya Construction wants to reduce its debt load and improve corporate flexibility. At a time when the primary markets are still strong due to demand for businesses with scalable development potential, both offerings will put investor appetite to the test.