Consumer banking company Hero FinCorp (HFCL) is set to raise Rs 2,000 crore via current and existing investors for its business purposes. Hero MotoCorp (HMCL) will invest Rs 700 crore in this capital raise round. The investment will be made in compulsorily convertible preference shares (CCPS) to be issued by HFCL.
Prior to the investment, HMCL’s shareholding in HFCL was 41.2 per cent, according to Hero’s exchange filing. “The exact shareholding of HMCL in HFCL post the investment will be determined upon completion of capital raise round by HFCL,” the filing further said. It also noted that this investment is subject to definitive documents and completion of certain conditions to a transaction of this nature.
Besides having over 40 percent share, the Munjal family is also the promoter of Hero FinCorp. While Pawan Munjal is the Chairman and Director of Hero FinCorp, Renu Munjal is the Managing Director of Hero FinCorp and is also involved in philanthropic activities across the Group. Abhimanyu Munjal is the Joint Managing Director and CEO at Hero FinCorp and has spearheaded international JVs, M&As and complex transformations, as per the Hero FinCorp website.
Hero FinCorp has been around since 1991 and was initially incorporated as Hero Honda FinLease Limited. HFCL is an NBFC that deals in financing retail and corporate customers through products including two-wheeler financing, term loans, working capital loans, loan against property, bill discounting, leasing, etc.
Till the quarter ended March 2021, Hero FinCorp had a turnover of Rs 4,091.64 crore. The consumer banking company had a turnover of Rs 3,702.62 crore and Rs 2,492.52 crore in 2019-20 and 2018-19 respectively.
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