Hero Fincorp - Building Brighter Tomorrow

Hero Fincorp is an NBFC with a diversified product portfolio with an aim to promote financial inclusion and help achieve the dreams of Indian entrepreneurs and businesses. The company provides a wide portfolio of financial products including pre owned car loans, loyalty personal loan, inventory funding, loan against property, loans to SMEs and emerging corporate's. 

In the two wheeler loan segment, Hero Fincorp has focused on customers who are left out for reasons like limited documentation, limited credit history and hence perceived to be as a high risk category customer by traditional banking channels. Company believes credit worthiness can be evaluated by employing innovative methods that take into account the subjective knowledge gleaned from customer visits, background checks, etc. This provides an opportunity to the customer to start building a credit history and move towards greater adoption of financial service. 

Since inception, company has acquired over 2.5 million customers who have opted for a variety of products, such as Two Wheeler Loans, Pre-Owned Car Loans, SME & Commercial Loans, etc. Hero Fincorp has nationwide presence - more than 2500 touch points, located across 1300 cities, towns, districts and villages. Manpower strength exceeds 1200 on roll employees. Launched 10 new offices in this fiscal year and more than 230 operations executives were placed at Hero Dealership to facilitate quicker turnaround for loan disbursements. 

Company has launched Hero Loyalty Card, Healthcare Industry Focused Products, Structured Finance and SME Premier during this year to strengthen the customized financial solutions to the customers. Company has partnered with high potential Fintech players over the past year and is open to actively assess and explore more investment and partnership opportunities in the Global fintech Space. 

In this fiscal year, company launched a wholly owned housing finance company - "Hero Housing Finance Ltd". with an overarching philosophy to serve clients housing finance needs with a tage line "from wheels to walls". 

Financial Performance

Company recorded encouraging results fuelled by increased performance - the Company's AUM has grew at a CAGR of 83% over last five years having a portfolio size of Rs. 13,542 Crs. 

Hero Fincorp witnessed 37% growth in disbursed loans amounting to Rs. 9,037 Crs. in current fiscal (as compared to Rs. 6,735 Crs. in 2017.). AUM grew by 38% to Rs. 13,542 Crs. (from Rs. 9,815 Crs). PBT increased by 23.6% to Rs. 248 Crs. (201 Crs.), PAT grew by 25% to Rs. 162 Crs. (from Rs. 130 Crs.) GNPA stood at 3.67% (2.69%). Capital Adequacy Ratio stood at 18.62% as on 31 Mar 2018, which is well above the RBI threshold of 15%. Tier I Capital Adequacy stood at 16.02% and Tier II at 2.60%

Credit Rating - AA+ and company cliams that borrowing costs are amongst the lowest in the industry.

Segment wise performance

In a retail business with 914 dealership in FY18 (842 in FY17), service points over 3000+ touch points, a capacity of disbursing 2 loans every minute, servicing over 2.5 million happy two wheeler loan customers as on Mar 31, 2018, a company has shown amazing achievement in short span of under 5 years. 

In a non retail segment company is operating from 42 locations, processed over 650 loan applications per month. In FY18, disbursement stood at Rs. 4844.2 Crs. new loans for Loan against property, SME and Emerging Corporate Business. Total loans outstanding as on 31 Mar 2018 stood at Rs. 7,861 Crs.

Company has recommended a final dividend of 28% (Rs. 2.8/- per equity share) for FY18.

During the year the company has called for the entire balance amount and subsequently received in respect of warrants issued as per the agreement executed amongst Otter Limited, Credit Suisse Limited, the Promoter group companies and the company in September 2016. All the warrants were converted into 57,65, 905 equity shares of the company in February 2018.

80% of shares are held by promoters and promoters related entities. Overseas institutions hold 13.54%

Future Outlook

Government's focus on promoting financial inclusion, large number of untapped or unbanked areas, increasing number of SMEs are opting for formal financing instead of relying on informal sourcing has meant more and more opportunities for the company. 

Hero FinCorp with an aim to become one of the India's premier financial institutions, to build Hero Fincorp as India's Next Gen Ultra Lean Credit Champion is focusing on four key strategic pillars - Diversifying loan book by launching new products, to develop a robust costomer service platform, digitization & upgradation of technology systems and hiring a talent for business units.

The vision of Hero Fincorp is to be a value driven, high performance organization with an innovation centric mindset by shifting its focus from transaction driven to relationship driven orientation is well posied in the hands of enthusiastic management enabling a long term disciplined and sustainable growth.

Other Valued Stories in Unlisted Space are Fino Paytech, HDB Financials, Catholic Syrian Bank, Dalmia Refratories, Utkarsh Microfinance and likes. To know more about these companies or to share the story in unlisted space, feel free to get in touch with me - Deepa Bhatia at deepa.bhatia14@gmail.com or dial in at +91 9820900224. Call between 4:00 pm to 5:00 pm from Monday to Friday to get a positive response.