Hero Fincorp Unlisted Shares
Hero Fincorp Ltd.
INE957N01016
Listing Status: DRHP Filed
About Hero Fincorp Unlisted Shares
Overview of Hero Fincorp Unlisted Shares
Genesis
Hero Fincorp Ltd. is the financial services arm of India's largest two-wheeler maker Hero MotoCorp Ltd.
It offers a wide range of solutions including two-wheeler financing, SME Lending, Personal Loans etc.
Established in 1992 as Hero Honda FinLease Limited, Hero Fincorp underwent a name change after Hero MotoCorp acquired full ownership of 'Hero Honda' following Honda Motor Company's departure from their joint venture.
Currently, the Company’s footprint extends to nearly 2000 retail outlets | 2000 corporate clients | 1000 dealerships, spanning across 1900 cities, towns, and villages.
Rating: “AA+ with stable outlook”: by CRISIL, ICRA and CARE.
Product Portfolio
The Company provides a wide portfolio of financial products including:
Retail Loans |
Corporate Loans |
Two-Wheeler Loans |
SME and Commercial Loans |
Used-Car Loans |
Supply Chain Financing |
Personal Loans |
Working-Capital Loans |
Segment – Wise Performance
Retail Business:
- Two-wheeler loans: Disbursements - 1 Million (8.78 Lakh in FY22) | Total active customer base - over 2.5 Million.
- Asset book: Rs. 8,631 Cr. | 900 dealerships as of FY23.
- 4,100+ touch points across 2,000 cities, towns & villages.
- Disbursing speed: 1 loan every 10 seconds.
SME & Corporate Business:
- 75 Locations.
- Processing Capacity: 3,000 applications per month.
- In FY23, Rs. 7,572 Crs. worth of loans were disbursed.
- Asset book: Rs. 12,538 Crs.
Future Outlook/Strategies:
- Embracing Digital Initiatives: Prioritizing digital initiatives to enhance customer service and promote digital EMI payments.
- Implement Data Analytics: Utilizing data analytics to streamline loan disbursement processes and enhance loan recovery strategies to improve operational efficiency.
- Strengthen Loan Portfolio: Implementing robust risk management practices and ensuring prudent lending practices to mitigate credit risks.
Subsidiary: Hero Housing Finance Ltd.
- Hero Housing Finance Limited (HHFL) is a wholly owned subsidiary of HFCL subsidiary of Hero Fincorp Ltd.
- HHFL commenced its lending operations from April, 2018.
- Products: Housing loans, loan against property and construction loans.
- Revenue from Operations - FY23: Rs. 400 Crs. | FY22: 298 Crs. | Y-o-Y Growth: 34%
- PAT - FY23: Rs. 22.63 Crs. | FY22: Rs. 2.09 Crs. | Y-o-Y Growth: 982%
Shareholding Pattern
- Hero MotoCorp Ltd. owns around 40% stake in Hero Fincorp.
- Pawan Munjal, chairman of Hero Fincorp, and his extended family hold nearly 10% in the NBFC in individual capacity. The family's investment firm Bahadur Chand Investments holds over 20%.
- Apollo Global Management is estimated to have secured a 9-10% stake in the funding round held in Feb 2022.
- Mauritius-based Otter Limited has a significant stake of 10% in Hero Fincorp.
- ChrysCapital, Credit Suisse and Apis Partners are the other investors in the NBFC.
Funding Information
In its latest funding round (4th Feb 2022), Hero Fincorp Ltd. secured ₹2,000 crore ($267 million) from several investors for business expansion plans.
Date |
Company |
Investment Amount |
Feb 2022 |
Apollo Global Management |
₹937 crore ($125 million) |
Feb 2022 |
Hero MotoCorp |
₹700 crore ($94 million) |
Apollo Management’s stake in Hero Fincorp post funding: 10%(Approx)
Estimated Valuation: 9370 Crs
Number of outstanding Shares: 12,73,06,674
Price Per Share: Rs. 736 (As of Feb 22)
Timeline
- 1991-2012: Incorporated as Hero Honda Finlease Ltd. | Renamed as Hero Fincorp Ltd.
- 2013-19: Received equity infusion of INR 106 Cr. | Launched Two-Wheeler Financing business, Used Car Business | 3000 touchpoints in 1700+ locations
- 2020: Achieved the status of India's No.1 Two-Wheeler Financier. | Among the Top 3 NBFCs in Pre-Owned Car Loans. | Secured a fund-raising agreement of INR 1,075 Cr. from PE Investors & Promoters.
- 2021: Launched a Customer Service App. | Introduced 'SimplyCash', a digital Loan Product.
- 2022: Launched Partnership Loans and achieved Disbursal of INR 1,900 Cr.+ in the first year.
- 2023: Achieved the highest-ever Disbursals in FY23 | Launched EV Financing | Crossed 10 Mn. Customers | Recognized as 'Great Place to Work' for the 6th year in a row.
Loan-Book Split
Segment |
Percentage |
Retail Lending |
|
· Two-Wheeler Lending |
23% |
· Used Car Financing |
5% |
· Personal Loans |
26% |
· Home Loans |
7% |
Retail SME Lending (which includes unsecured business loan, loan against property, supply chain finance) |
19% |
Corporate Lending |
15% |
Lending on the CROMS Platform |
5% |
Total |
100% |
Insights of Hero Fincorp Unlisted Shares
Financial Highlights:
INR in Crs
PARTICULARS | FY24 | FY23 | FY22 |
REVENUE | 8291 | 6402 | 4739 |
EBITDA | 4055 | 2901 | 1399 |
PAT | 637 | 480 | -192 |
EPS | 50 | 38 | -15 |
Dividend History
Highlights:
- FY23: AUM: INR 41,497 Crs. | FY22: AUM: INR 32,953 Crs. | Growth: 26% Y-o-Y.
- Highest ever Loan - Disbursals of INR 27,713 Cr. (Consolidated) in FY23.
- The Company experienced a robust 35% Y-o-Y increase in revenue in FY23.
- PAT surged significantly, shifting from a loss of ₹190 Crs, to ₹480 | Growth: 350%.
- In FY23, GNPAs improved to 5.38% from 7.94% in FY22 | NNPAs improved to 2.79% from 4.63% in FY22.
Peer Comparison:
Particulars |
Hero Fincorp |
Bajaj FinServ |
Shriram Finance |
Total Income |
6,402 Crs. |
82072 Crs. |
30508 Crs. |
PAT |
480 Crs. |
12210 Crs. |
6011 Crs. |
Net Profit Margins |
7.5% |
14.8% |
19.7% |
CMP (03/05/24) |
₹ 1699 |
₹ 1640 |
₹ 2608 |
Market Cap |
21,629 Crs. |
2,61,580 Crs. |
97,992 Crs. |
P/E Ratio |
45 |
40 |
16.25 |
P/B Ratio |
4.12 |
4.33 |
2.00 |
Industry Outlook
Relevance of NBFCs in the Indian landscape:
NBFCs have emerged as a significant force in promoting financial inclusion in India by successfully catering to the underserved segments of society.
The growing market share of NBFCs can be attributed to the lighter and more flexible regulations imposed by the RBI, as well as their focus on specific sectors and niche markets.
Key Highlights
- As of September 2023, NBFCs in the country have disbursed loans amounting to over 450 billion U.S.D.
- As per ICRA, the NBFC-Retail AUM growth rate in FY23 16-18% in FY23 | 12-14% in FY24.
- Projected CAGR of the NBFC sector: 18.5% | 2021 – 2026
Vehicle Finance Industry Trends – India
The two-wheeler loan market across India is estimated to be valued at over 12 Billion U.S.D by 2025.
Vehicle loans have surged by 137% in the past 3 years, becoming the second-largest loan segment after home loans.
Vehicle Finance Industry In India: CAGR of 11% | 2022-2027.
The rapid growth is driven by:
- Low interest rates
- Increasing ownership of two-wheelers due to their Cost-effectiveness
- Increasing number of Production Plants being set up by Automakers
- Increasing disposable income | Evolving consumer preferences
Key Trends:
- Rising demand for electric vehicles: Due to Government initiatives boosting EV adoption
- Expansion of car loans to Tier 2 and Tier 3 cities
- Digitalization
(Source: BCG Report – Dec 23, ET-BFSI, ICRA, Statista, Mint)
IPO Plans:
17TH October 2023: Hero Fincorp, has decided to initiate a substantial IPO in 2024. The targeted size is approximately ₹4,000 crore. The planned offering will comprise a mix of primary and secondary share issuances. This strategy aims to raise growth capital while facilitating an exit opportunity for certain investors.
(Source: MoneyControl)
Recent Developments: (5th March 2024)
- Hero Fincorp witnessed a 25% rise in AUM to Rs. 49,127 crore | 26% increase in Disbursals to Rs. 24,979 Crs. in the 9MFY24.
- Ahead of its IPO, the company wrote off bad loans amounting to nearly Rs 1,200 crore, representing approximately 3.4% of its loan book.
- Hero Fincorp reported PAT of Rs 736 Crs. in 9MFY24 | 71% growth.
- Hero Fincorp is targeting a PAT of Rs 1,000 Crs. in FY25, as per J-MD and CEO Abhimanyu Munjal.
- They have set-up an in-house tech and analytics centre in Bengaluru.
SWOT Analysis
Key Strengths:
- Strong Parentage and Support from Hero Group: Being a part of the Hero group provides HFCL with significant backing, demonstrated through equity infusions and shared brand identity. This support enhances credibility and stability in the market.
- PAN India presence of network: Widespread presence allows for greater market penetration. | 7.5 million customers.
- Diversified Borrowing Profile: HFCL sources funds from banks, commercial papers, and bonds. This diversification reduces dependency on any single source of funding and ensures financial flexibility.
- Adequate Capitalization Profile: HFCL has demonstrated strong capital-raising abilities, improving its capital adequacy and overall gearing levels. Capital Adequacy Ratio (CAR) - 20.57%.
- Well-defined organizational structure | Experienced senior management team.
Key Weaknesses
- Weak Asset Quality: Despite improvements, HFCL's asset quality remains a concern, evidenced by GNPA of 5.38%.
- High Credit Costs Constraining Profitability: HFCL had reported net loss of ₹192 crore in FY22 caused by significant credit costs of ₹1,841 Crs. during the year. Any significant increase in the credit cost will continue to impact the profitability of HFCL.
Opportunities:
- Untapped markets | Digital Ventures | MSME Financing
- Hero Fincorp’s Launch of Electric Vehicle financing in 2023 offers a prime opportunity to tap into the growing market for eco-friendly transportation.
Threats:
- Competition from finance companies and small banks.
- External risks such as liquidity stress and political uncertainties.
- Regulatory and compliance-related changes.
Hero Fincorp Unlisted Share Price Journey
The share price of Hero Fincorp Unlisted Shares was Rs. 935 when they were first introduced in the unlisted market in March 2021.
Since then, the stock price reduced steadily and reached Rs. 680 by Jan 2023.
The share price took off post that due to improving financials and currently is Rs. 1680.
Financial Charts of Hero Fincorp Unlisted Shares
Balance Sheet of Hero Fincorp Unlisted Shares
Profit and Loss of Hero Fincorp Unlisted Shares
Ancillary of Hero Fincorp Unlisted Shares
Ratio Analysis
Peers
Industry Benchmarking
Segment Revenue
Subsidaries
Security Allotment
Corporate Governance
Team Management Details
FAQs of Hero Fincorp Unlisted Shares
-
How to buy Hero Fincorp Ltd.?
Below are three ways through which you can purchase Hero Fincorp Ltd.:
- We at Altius Investech have many actively traded scripts and are market makers of unlisted shares. To check out all the unlisted shares traded. (Click on link). To submit a request to buy Hero Fincorp Ltd., please click on the trade button at the top of this page
- Additionally, you can download our app from your play store or app store, register on our application, and engage in active trading there.
Download the Altius App here https://onelink.to/hf4m72 - You can also reach out to us at : +91 8240614850 / +91 8240861716
-
How to sell Hero Fincorp Ltd.?
Below are three ways through which you can sell Hero Fincorp Ltd.:
- We at Altius Investech have many actively traded scripts and are market makers of unlisted shares. To check out all the unlisted shares traded. (Click on link). To submit a request to sell Hero Fincorp Ltd., please click on the trade button at the top of this page
- Additionally, you can download our app from your play store or app store, register on our application, and engage in active trading there.
Download the Altius App here https://onelink.to/hf4m72 - You can also reach out to us at : +91 8240614850 / +91 8240861716
-
What is the price of Hero Fincorp Ltd.?
We provide a two way quote on all the shares we deal in. Your buy price for Hero Fincorp Ltd. is ₹2035 and your sell price for Hero Fincorp Ltd. is ₹1850. The price is based on our estimates and market conditions.
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What is the lock-in period of Hero Fincorp Ltd.?
The lock-in period for Hero Fincorp Ltd. varies depending on the category of investors:
- For retail Investors, HNIs, or Body Corporates, the lock-in period is 6 months from the date of the listing of Hero Fincorp Ltd.
- For Venture Capital Funds or Foreign Venture Capital Investors, there is a lock-in period of 6 months from the date of acquisition of Hero Fincorp Ltd.
- For AIF-II (Alternative Investment Funds - Category II), there is no lock-in period
August 2021 saw the introduction of this regulation by SEBI. The purpose of the regulation change, which lowered the lock-in period from a year to six months, was to incentivize additional investments in firms getting ready for initial public offerings, or IPOs. Since its introduction, a number of Portfolio Management Services (PMS) have advised their clients to purchase Pre-IPO shares in order to take advantage of the advantages associated with early-stage investments. This reduction in the lock-in period is considered as a significant step forward.
-
How is the Hero Fincorp Ltd. price calculated?
Fundamental & Comparative valuation models and the forces of demand and supply in the market for unlisted shares dictate the price. These prices are based on our estimates and transaction history of Hero Fincorp Ltd.. The price is also determined from the most recent funding round for Hero Fincorp Ltd.. This provides us with a benchmark valuation, offering a clear indication of the company's current market value as perceived by investors and industry experts.
-
What are the lot sizes of Hero Fincorp Ltd.?
We can generally arrange lot sizes starting with an investment of INR 20,000. To confirm the lot sizes of Hero Fincorp Ltd. with us kindly click here.
-
What are the financials of Hero Fincorp Ltd.?
The financials of Hero Fincorp Ltd. which includes the P/L of Hero Fincorp Ltd. and the Balance Sheet of Hero Fincorp Ltd. is in the financials section (Click on link).
-
Where can I find the annual report of Hero Fincorp Ltd.?
The annual report of Hero Fincorp Ltd. is available in the annual report section (Click on link).
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Is buying Hero Fincorp Ltd. legal in India?
Yes, buying and selling unlisted shares in India is indeed 100% legal. This activity is regulated and governed under the guidelines provided by the Securities and Exchange Board of India (SEBI). Investors and traders must adhere to these regulations and guidelines to ensure compliance with legal and financial standards. It's important for participants in the unlisted share market to be aware of and understand these regulations to engage in transactions legally and securely.
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Short-term Capital Gain taxes to be paid on Hero Fincorp Ltd.?
When you sell unlisted shares within a period of two years from the date of acquisition, any profit earned from the sale is classified as Short-term Capital Gain (STCG). This gain is then added to your total income for that financial year. The tax on this short-term capital gain is calculated based on your applicable individual income tax slab rates. Therefore, the rate at which you will pay tax on the STCG from unlisted shares depends on your total income, including this gain, and the tax slab it falls under as per the prevailing income tax laws in India. It's important for investors to consider these tax implications when engaging in transactions involving unlisted shares.
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Long-term Capital Gain taxes to be paid on Hero Fincorp Ltd. and how are They Taxed?
Long-term Capital Gains (LTCG) on unlisted shares in India refer to the profits earned from the sale of unlisted shares that have been held for more than two years. The key aspects of LTCG on unlisted shares include:
- Tax Rate: LTCG on unlisted shares is taxed at a rate of 20%.
- Indexation Benefit: This is a significant advantage for investors. Indexation allows for adjusting the purchase price of the shares for inflation, which can reduce the taxable gain.
- Importance for Investors: Understanding LTCG is crucial, especially for High Net-worth Individuals (HNIs) and retail investors, as it impacts their investment strategy and tax planning. Knowing these details helps in making informed investment decisions.
- Calculation: LTCG is calculated by subtracting the indexed cost of acquisition (the purchase price adjusted for inflation) from the sale price of the shares. The profit thus calculated is subject to a 20% tax.
- Applicability: LTCG tax is applicable to profits from the sale of unlisted shares held for more than two years.
- Relevance: This tax is particularly relevant to investors in the unlisted share market, including those considering selling their holdings after a period of more than two years.
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Applicability of Taxes on Hero Fincorp Ltd. once it is listed?
When shares initially bought in the unlisted market become listed, the taxation rules change significantly if these shares are sold through a stock exchange. Here's what investors need to know:
Transition to Listed Market Tax Rates: Once unlisted shares are listed on the stock exchange and subsequently sold, the tax rates applicable to listed securities come into effect. This shift means that the favourable tax treatments for listed shares, as per the prevailing tax laws, will apply.
Taxation Based on Holding Period: The crucial factor in determining the type of capital gains tax (Long-term or Short-term) is the holding period of the shares. Importantly, this period is calculated from the original purchase date when the shares were unlisted.
Long-term vs. Short-term Capital Gains: If the shares are sold after being held for more than one year from the date of purchase (including the period when they were unlisted), they are subject to Long-term Capital Gains (LTCG) tax.
Conversely, if sold within one-year, Short-term Capital Gains (STCG) tax rates apply.
Significance for Investors: This information is vital for investors in the unlisted market, as it impacts their tax planning and decision-making process. Understanding these nuances ensures that investors can strategically plan the sale of their shares post-listing to optimize tax implications.
Advice for Investors: It's advisable for investors to keep a record of their purchase dates and monitor the listing dates closely. Additionally, staying updated with the latest tax regulations or consulting with a financial advisor is recommended for accurate tax calculations and compliance. -
How does Altius Investech source Hero Fincorp Ltd.?
At Altius Investech, our approach to sourcing Boat Unlisted Share (Imagine Marketing) involves a strategic and direct method. Primarily, we acquire these shares from the below key groups:
Employees of the Company: Employee stock option plans (ESOPs) or other compensation packages frequently include shares for firm employees. For a various reasons, such as including portfolio diversification or financial considerations, some of these employees may eventually choose to sell their shares. We engage with these employees, providing them a platform to sell their shares.
Initial Investors: These are the angel or early-stage investors who provided capital to the business in its early stages. These original investors may look to sell all or part of their ownership position in the company as it develops and flourishes. This might be done for various reasons such as in order to maximise their investment, reallocate resources, or make other calculated financial decisions.
Funding rounds and VC funds: Altius Investech sources the shares from private placement rounds in which private companies seek to obtain capital from the market. Through our platform, venture capital funds can liquidate their shares and we receive the inventory from them when they decide to sell a portion of their ownership through block trades.
By establishing connections with these groups, Altius Investech guarantees our clients a steady and dependable supply of Boat Unlisted Share (Imagine Marketing). This process not only makes it easier for employees and initial investors in liquidating their assets, but it also gives our clients access to shares that aren't often found on the open market. Our platform effectively facilitates a win-win situation for both buyers and sellers. -
How to trust Altius Investech before buying Hero Fincorp Ltd. from its platform?
Altius Investech stands at being India's fastest growing and leading marketplace for buying and selling unlisted shares. We believe in enabling access to alternative sources of investments at lower entry barriers to private equity investments.
With more than 25 years of experience, Altius Investech has carved a niche in the financial market by serving more than 8000 clients. The incredible journey is further highlighted by the vast number of transactions that Altius Investech has facilitated transactions that have already exceeded 300 crores.
For investors Altius Investech curates investment opportunities in companies at reasonable valuations which are on the verge of an IPO leading to massive value unlocking. Investments are backed by thorough research and sound investment thesis, with a time bound exit plan.
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