Hero FinCorp, a non-banking financial company (NBFC) and part of the $5-billion Hero Group, on Thursday raised over ₹1,000 crore from ChrysCapital, Credit Suisse and Hero Group to expand its business in the next 12-18 months.
While ChrysCapital has invested ₹570 crore, Credit Suisse and Hero Group have pumped in ₹132 crore and ₹300 crore, respectively.
“The financial services market in India, particularly NBFCs, has witnessed steep growth in recent years and it still remains largely under-penetrated.
“With Hero FinCorp, we aim to capitalise on this opportunity by providing credit power to financially-excluded customers across the hinterlands of the country,” Pawan Munjal, Chairman, Hero Group, said here.
Banking licence? When asked if the company would look at banking licence going ahead, he said it would first focus on growing the current business. “It surely is part of our vision to get into banking, but not now,” Munjal added. Hero MotoCorp and the Munjal family have a combined holding of 79 per cent in Hero FinCorp, Credit Credit Suisse holds 2 per cent, ChrysCapital 11.1 per cent, and others (public shareholdings) 7.2 per cent. Hero MotoCorp alone has a stake of 41 per cent in the NBFC (out of the total 79 per cent held by the family).
Growth target The company aims to grow its asset base from ₹8,000 crore now to ₹35,000 crore by 2020, through these investments, Abhimanyu Munjal, Joint Managing Director and Chief Executive Officer, Hero FinCorp, said.
“These investments endorse the solidity of our organisation’s strategy and processes and also validate the tremendous growth opportunities in the segment. Hero FinCorp is now geared up for the next phase of growth and aims to grow its asset book to ₹35,000 crore by year 2020,” he said. The company has 40 per cent footprint in rural areas and expects to get more business as the rural folk are getting more aware of various credit services because of government projects, such as Aadhaar and Jan Dhan Yojana, he said.
The company plans to enter new product segments such as home loans and used two-wheeler loans and aims to further augment existing businesses with special focus on used-car finance, consumer durables/loyalty loans, and SME lending. It has presence in over 950 locations across India through more than 2,000 touch-points, and the company plans to double the touch-points to 4,000 by 2020.