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Hero Fincorp Limited Unlisted Shares
DRHP Status : Not Filed
1050
Fundamentals About Hero Fincorp Limited
Downloads & Investor Documents
All documents are provided for informational purposes and are subject to regulatory disclosures.
Key Financials of Hero Fincorp Limited
| P&L Statement | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Interest Earned | 3877 | 4241 | 5719 | 7479 |
| Other Income | 401 | 497 | 728 | 880 |
| Interest Expended | 1710 | 1678 | 2173 | 3097 |
| Operating Expenses | 1100 | 1498 | 2288 | 2513 |
| Provisions and contingencies | 1417 | 1840 | 1212 | 1722 |
| PAT | 51 | -191 | 479 | 637 |
| eps | 4.02 | -15.04 | 37.62 | 50.16 |
| Gross NPA | 7.4 | 7.9 | 5.37 | 4.02 |
| Net NPA | 4.61 | 4.63 | 2.79 | 2 |
| Financial Ratios | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Advances | 26194 | 31341 | 39871 | 49880 |
| Book Value | 391.1 | 375.35 | 411.85 | 453.94 |
| P / B | 2.94 | 3.06 | 3.04 | 3.91 |
| ROE (%) | 1.03 | -4.01 | 9.14 | 11.05 |
Balance Sheet
| Assets | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Fixed Assets | 93 | 92 | 111 | 181 |
| Cash and Balances | 1222 | 1038 | 790 | 158 |
| Investments | 1917 | 1172 | 1747 | 1896 |
| Advances | 26194 | 31341 | 39871 | 49880 |
| Other Assets | 570 | 756 | 932.31 | 1089 |
| Total Assets | 29996 | 34399 | 43451.31 | 53204 |
| Liabilities | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Share Capital | 127 | 127 | 127.31 | 127 |
| FV | 10 | 10 | 10 | 10 |
| Reserves | 4840 | 4640 | 5116 | 5638 |
| Borrowings | 23391 | 27875 | 33359 | 42544 |
| Deposits | 0 | 0 | 0 | 0 |
| Other Liabilities | 1628 | 1747 | 4849 | 4895 |
| Total Liabilities | 29996 | 34399 | 43451.31 | 53204 |
About Company
The following table shows a 10-point analysis of Hero FinCorp Limited. We will discuss each point in detail after this table.
| Parameter | Key Numbers | Insights |
|---|---|---|
| Business Overview | FY25 AUM ~₹1,00,000–1,10,000 cr Revenue/Interest Earned ~₹8,589–9,903 cr PAT ₹110 cr PAT margin ~1.1% |
Leading retail-focused NBFC (Hero MotoCorp JV/promoter backing); diversified lending across two-wheeler loans, personal loans, SME/MSME, loans against property & consumer durables. Strong rural and urban presence with digital push; FY25 growth moderated by asset quality pressures and portfolio cleanup. |
| Industry & Market Position | Top retail NBFC in vehicle & consumer finance Hero brand & distribution advantage Competitive across secured & unsecured segments |
Strong synergies with Hero MotoCorp for two-wheeler financing. High barriers via funding access & risk models; competition from Bajaj Finance, Shriram & banks. Exposed to personal loan stress and regulatory tightening on unsecured lending. |
| Revenue Growth Trend | FY23–FY25 CAGR ~20–25% FY25 ~15–18% YoY growth (interest earned) |
Robust historical growth from retail expansion & cross-sell. FY25 slowdown due to cautious lending, portfolio pruning & higher provisions. Long-term tailwinds from consumption growth & vehicle demand. |
| Profitability & Margins | NIM ~9–10% ROA ~0.18% PAT margin ~1.1% |
Sharp FY25 PAT drop (~82% YoY) due to elevated provisions (~₹2,884 cr) and higher interest costs. GNPA increased to ~5%, impacting earnings. Core operations show resilience but profitability remains pressured. |
| Cash Flow Quality | OCF supported by collections No/limited dividends |
Cash generation strained by provisions & write-offs. Funding mix (banks/ECBs) supports liquidity. Moderate quality amid volatility; parent/group backing provides buffer. |
| Balance Sheet Strength | Net worth strong (post capital raises) CRAR >15–16% Debt/Equity ~5–7x |
Solid capitalisation with pre-IPO funding rounds. Liquidity buffers in place; downside supported by promoter backing. Asset quality risk remains key monitoring factor. |
| Valuation Comfort | Unlisted price ~₹1,100–1,250 (Feb 2026) EPS ~₹8–9 P/B ~2.5–3x Market cap ~₹14,000–16,000 cr |
Discounted valuation reflecting profitability dip & asset stress. Attractive as long-term recovery play; valuation premium muted versus peers due to GNPA overhang. |
| Management & Governance | Hero MotoCorp JV/promoter-led Professional management team |
Proven track record in scaling retail lending. Transparent disclosures (annual reports, SEBI filings). Governance solid; no major issues beyond sector-wide challenges. |
| Growth Triggers & Catalysts | Secured portfolio shift Asset quality improvement IPO (SEBI approved DRHP) |
Major catalyst from listing (fresh issue + OFS ~₹3,400–3,600 cr). Organic upside from two-wheeler & consumer recovery and cost discipline. Potential PAT rebound if provisions moderate. |
| Liquidity & Exit Visibility | OTC liquidity only IPO approved (SEBI nod 2025; expected FY26) |
Moderate unlisted trading; short-term capital lock-in. High exit visibility post-IPO with liquidity boost and possible re-rating upon turnaround. |
Hero FinCorp (HFCL) is a systemically important NBFC in India, backed by the Hero Group (Hero MotoCorp).
Its lending portfolio includes:
- Two-wheeler loans (especially for Hero MotoCorp vehicles)
- Used-car financing
- Personal loans & unsecured business loans
- Loans against property (LAP), SME working-capital loans, and structured corporate credit
Subsidiary – Housing Finance
Hero FinCorp wholly owns Hero Housing Finance Ltd (HHFL), which offers housing loans, loans against property, and construction finance. As of March 31, 2024, HHFL’s AUM stood at ₹5,331 crore.
Credit Strategy Shift
- In August 2025, HFCL announced a halt on unsecured loans due to over-leveraged customers.
- The company is refocusing its business on secured lending (two-wheelers, LAP, SME) to strengthen its credit profile.
Financial Performance & Key Metrics
Based on FY25 and other recent data:
- Interest Income (FY25): ₹ 8,589 crore (up ~15% vs FY24)
- Other Income (FY25): ₹ 1,314 crore (jumped ~49%)
- Interest Cost (FY25): ₹ 3,827 crore (higher borrowing cost)
- Operating Expenses (FY25): ₹ 2,935 crore
- Provisions / Contingencies (FY25): ₹ 2,884 crore (provisioning sharply up)
- Profit After Tax (PAT, FY25): ₹ 110 crore vs ₹ 637 crore in FY24 – a steep fall
Asset Quality (Q1 FY26):
- Gross Non-Performing Assets (GNPA): ~5.65% (up from prior)
- Net NPA: ~2.50% for the same period.
- Provisions / Credit Costs: Very elevated in Q1 FY26.
Valuation Insight (Unlisted context):
- According to Q1 FY26 data, Book Value per Share: ₹452.07
- Price to Book (P/B): ~2.98× as per the same report.
- H1 FY26: reported a loss of ₹163 crore, signalling stress in its loan book and provisioning.
Business Strengths & Growth Drivers
- Strong Parentage: Support from Hero MotoCorp / Munjal family gives credibility + access to two-wheeler customer base.
- Diverse Loan Portfolio: Spread across secured (vehicle, LAP) and unsecured loans → helps risk diversification.
- Housing Finance Exposure: With HHFL, HFCL is expanding into the growing Indian housing finance market.
- Digital & Analytics Focus: Improved underwriting and collection via data analytics (per management commentary).
- Asset Book Consolidation: Restricting unsecured lending to de-risk the balance sheet and focus on more secure lending; aims 14% disbursement growth in FY26.
Risks & Challenges
- Rising Credit Cost: Higher provisioning indicates rising stress in unsecured or risky assets.
- Loss of Profitability: Sharp fall in PAT in FY25 is a concern for long-term investors.
- High Leverage: As a large NBFC, reliance on borrowed capital is high; interest rates risk.
- Asset Quality Risk: NPA rise, particularly from unsecured loans, could impair credit book.
- Execution of Strategy Shift: Moving from unsecured to secured lending will require time and careful risk management.
- IPO / Valuation Risk: Investors in unlisted HFCL shares face risk around IPO pricing, future dilution, and execution.
Quick Summary
Hero FinCorp Limited is a major NBFC in India, with strong backing from the Hero Group and a diversified lending business. After years of growth, HFCL is now recalibrating its strategy — reducing unsecured loans, increasing provisioning, and focusing on secured lending like two-wheeler, LAP and SME loans. While its top-line remains healthy, asset quality pressure and loss in FY25 are red flags. For unlisted-share investors, HFCL offers a compelling play on India’s credit under-penetration, but risks on credit and profitability are non-trivial,
Shareholding Pattern of Hero Fincorp Limited
| Name | Holding |
|---|---|
| Hero MotoCorp Ltd. | 41.19% |
| Bahadur Chand Investment Pvt. Ltd. | 20.34% |
| Otter Limited | 10.12% |
| Others | 28.35% |
Promoters of Hero Fincorp Limited
| Name | Role | Linkedin Profile |
|---|---|---|
| Abhimanyu Munjal | Managing Director & CEO, Hero FinCorp |  |
| Hero MotoCorp / Munjal Family | Major Promoter (Group) | |
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Frequently Asked Questions
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