Delhi-based Non-Banking Finance Company Hero FinCorp has raised Rs 1,000 crore from ChrysCapital, Credit Suisse and the group promoters to expand finance to retail and corporate customers as it gears up to become a complete financial services provider in the country's fast expanding organised credit business.
Hero FinCorp is part of the broader Hero Group that also owns the flagship Hero MotoCorp, the world's largest two-wheeler maker. It has received private equity firm ChrysCapital Advisors' investment of Rs 570 crore and Credit Suisse has brought in Rs 132 crore.
The company plans to use the funds to expand the credit services over the next 12-18 months from the current base of a million retail customers. The promoters of Hero Group have also infused Rs 300 crore. The NBFC, which has an asset size of Rs 8,000 crore, gets one-fourth of its business through financing purchases of Hero's two wheelers.
"The investment will take Hero FinCorp across the hinterland, which has a large potential for credit services and opportunity for growth. We have financiers financing two-wheelers more in the urban areas. So, we wanted Hero FinCorp to expand its wings in the hinterland. We want to make it a complete financial services company," said Pawan Munjal, Chairman of the Hero Group. Munjal is also the CMD and CEO of Hero MotoCorp.
Other fast growing segments of Hero FinCorp are loans against property, home loans and loans to SMEs and emerging companies. Backed by the strong promoters, Hero FinCorp will expand its presence from 2,000 touch points to 4,000 touch points by 2020 with an aim to grow asset size to Rs 35,000 crore.
Abhimanyu Munjal, joint MD and CEO at Hero FinCorp said, "The money raised will be used to grow asset size, invest in technology and expand the product portfolio. We are looking at the affordable housing sector as a prime area of growth."
Hero FinCorp that started from the asset size of Rs 300 crore in 2013 and stands at Rs 8,000 crore till the end of FY'16, will be using the touch points of Hero MotoCorp to further its reach across the country. It currently has 950 locations across the country.