Hero FinCorp is the NBFC arm of Hero MotoCorp Ltd, the largest Two-Wheeler (2W) manufacturer in the World. The Promoter Hero MotoCorp along with Munjal family, Hero InvestCorp and Bahadur Chand Investments together hold 80% of the shareholding in the NBFC. Out of which, Hero MotoCorp holds more than 41%, Munjal family holds cumulatively 14% and Bahadur Chand Investments holds 20% of the promoter shareholding. The balance is held by significant financial private equity investors like Chrys Capital, Otter Limited, Credit Suisse as well as minority shareholders.

Reach:
The company has presence in over 280 dedicated dealerships of Hero MotoCorp and has over 2000 touch points to provide its products and services across the country.
Promoter significantly raising stake by equity investment through private placement
Hero Fincorp has raised Rs.1,075 crores by issuing equity shares through private placement route of which 75% has been invested by the parent company which signifies confidence and commitment of the Promoters towards its subsidiary’s growth story.
Successful in fund raising through debt: Hero FinCorp is one of the very few NBFC’s to have been able to consistently access banks and debt markets for its funding requirements and has been able to refinance majority of its maturing obligations and has reduced its dependence on short-term financing. In FY2020, the company raised Rs.125 crores via private placement of NCDs.

Loan Book:
The company has one of the strongest Loan Book amongst its peers with approximately 80% of the loan book under Secured Loans.

Outlook:

In June 2020, Hero MotoCorp has been able to reach 90% of its sales volume of Pre-COVID levels indicating growing demand for 2W caused by requirement for individual travel by a section of population who were hitherto travelling by various mode of public transport. The company is well positioned to capitalize on this demand in 2W segment owing to its exclusive presence in the dealership network of Hero MotoCorp and wide range of product portfolio.

Additionally, the company’s Jt. CEO and MD, Abhimanyu Munjal has recently said that the company is intensely focusing on curating products for 2W ownership and funding working capital requirement of Small and Medium Enterprises to cater to the demand of the market post COVID-19 and hence Hero FinCorp could see a rapid growth in FY2021. When it comes to impact of the moratorium, it is well-positioned in terms of cash reserves and impairment reserves to absorb the impact of COVID-19 on its business.