Company Highlights
| Industry | Financial Services |
|---|---|
| Founded | 1991 |
| Headquarters | New Delhi, India |
| Key people | Abhimanyu Munjal CEO,Ajay Sahasrabuddhe, COO- Retail Finance,Sajin Mangalathu, Head of Technology and Operations |
| Products | Two Wheeler LoansLoan Against PropertySME & Commercial Loans |
| Revenue | 4091.64 crore (2020-21) |
| Rating | AA+ / Stable |
| Website | www.herofincorp.com |
About
Hero FinCorp is an Indian non-banking financial enterprise (NBFC) that is a subsidiary of Hero MotoCorp. Consumer finance and commercial loans are two of the company’s current operations. Consumer Finance covers Hero MotoCorp Two Wheeler financing, Loyalty Customer Loans (top-up loans for current customers), and property-based loans. On the commercial lending side, it offers a diverse range of financing options to Indian businesses, including working capital loans and machine loans, among others. It is Hero MotoCorp Ltd’s captive finance company.
Journey
Hero Honda Finlease Ltd was launched in 1992 to provide working capital loans and medium-term financing to component suppliers and dealers of parent business Hero MotoCorp, formerly known as Hero Honda Motors Ltd.
When Hero Honda Motors was reformed in 2011, the firm was renamed Hero FinCorp and took on its current shape. Customers could borrow two-wheelers loans from the company starting in April 2013. It began offering loans against property, loans to small and medium businesses, and commercial loans in 2014.
Products/Services by Hero Fincorp
Two Wheeler Loans
Hero FinCorp provides financing for the purchase of Hero MotoCorp two-wheelers. The firm claims to have over 350,000 active two-wheeler customer loans in June 2015. It plans to be present in over 730 Hero MotoCorp dealerships by end of March 2016.
Loyalty Customer Personal Loans
Hero FinCorp provides financing options for its existing customers who have availed loans to purchase two-wheelers from Hero MotoCorp. Customers with a good track record of repayment are offered a Top-up Loan, called Loyalty Personal Loan (LPL). Fulfillment through the diverse dealership network of Hero MotoCorp combined with wide front office network of CAMS is enabled.
Used Car Finance
The company has recently started financing of used cars for both salaried and self-employed individuals. The company offers customizable tenures and payment options.
Leading auto portal, CarDekho.com has partnered with Hero FinCorp, a leading non-banking financial company, to bring comprehensive financing options to its used car buyers
Loan Against Property
The company provides loans against property to corporates, partnership firms and self-employed individuals for up to 15 years with customizable interest rates.
SimplyCash – Instant Loan App
In early 2020, the company launched SimplyCash and enter the instant cash loan segment. Millennials across 90 cities in India can download the app and avail instant cash loans as per their need.
Business Model of Hero Fincorp
Hero FinCorp offers unsecured business loans to:
- Manufactures, Traders & Wholesalers
- SME businesses with a minimum of 5 years of experience having satisfactory credit and financial background.
- Sole Proprietorship, Partnership, Private Limited, Public Limited, Trust/Society, and Hindu Undivided Family (HUF)
Features of Hero FinCorp business loan:
| Interest Rate | 18% onwards |
|---|---|
| Loan offered to | Public and Private firms, Sole proprietorship and Self-employed professionals |
| Loan Amount | From Rs. 5 to Rs. 25 lakhs |
| Repayment Tenure | Up to 36 months |
| Credit Score | Higher credit scores have better chances of approval |
| Collateral / Security | Not required |
Eligibility for HeroFincorp Business Loans:
- Businesses should have a minimum of 5 years of existence in the same sector
- Good credit score and flawless financial history
- Only an Indian citizen with no criminal record can apply
- Applicant should have no previous default on any borrowings
Benefits of Hero FinCorp Business Loan:
- Competitive interest rates
- Flexible repayments
- Hassle-free documentation process
- Fast loan approvals and disbursal
- Transparent loan process
IPO & Fund raised
| Sector | Financials | Sub- Sector | Consumer Finance | Category | Upcoming IPO |
|---|---|---|---|---|---|
| P/E | 231.99 | P/S | 2.88 | P/B | 2.51 |
| Industry P/E | 55.00 | Face Value | 10.00 | Book Value | 390.20 |
| Market Cap | 12463.32 cr + unlisted market valuation | Dividend | 1.00 | Dividend Yield | 0.00 |
IPO
If Hero FinCorp goes ahead with the listing, it will make the company the only second entity from the Hero group to get listed on the stock exchanges.
Hero MotoCorp and US-based private equity major Apollo Management participated in the latest fund-raising round of Hero FinCorp. The company raised $267 million from Apollo, Hero MotoCorp.
Hero FinCorp has closed the capital round of ₹2,000 crores which will help them almost double their AUM from their current level of ₹26,000 crores to almost ₹50,000 crores. Their liquidity remains strong and their gearing ratios are at around 4.5 against the allowed 6, which allows them the headroom,
External Funds Raised by Hero Fincorp:
In September 2016, Hero FinCorp announced that they have raised about INR 1002 crore from internal as well as external sources.
Around INR 702 was raised from ChrysCapital, a private equity firm, and Credit Suisse, a Swiss financial services firm. The remaining INR 300 Crore, was raised from the Hero Group.
ChrysCapital will take an 11% stake in Hero FinCorp while Credit Suisse will hold around 2.5%. This transaction had valued the company around INR 5,200 crore.
The funds will be deployed to help the company achieve its growth strategy over the next 12 to 18 months. The strategy entails entering new product segments, such as home loans and used two-wheeler loans and by further augmenting existing businesses, with special focus on used car finance, consumer durable and SME lending.
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