Hero FinCorp in talks to raise ₹1,000 cr at $1 bn valuation
MUMBAI: Hero FinCorp Ltd, the financial services arm of India’s largest two-wheeler maker Hero MotoCorp Ltd, is looking to raise up to ₹1,000 crore at a valuation of $1 billion at its next funding round, two people familiar with the matter said.
According to the people cited above, who spoke on condition of anonymity, Credit Suisse which was mandated to manage the fundraising, has approached several large domestic and global private equity funds for a potential investment.
The people cited above added that the size of the stake sale has not been finalized and will depend on what the final valuation is in the forthcoming round.
“The company expects to be valued around $1 billion,” said the first of the two persons cited above. In the last funding round, Hero FinCorp was valued at close to ₹4,000 crore, this person said, adding “Since then, the book size has grown significantly”.
In September last year, the non-banking finance company (NBFC) had raised ₹1,000 crore from three investors, including ₹570 crore from private equity fund firm ChrysCapital, R132 crore from Credit Suisse Group and ₹300 crore from Hero Group.
Hero MotoCorp has a 40.3% stake in Hero FinCorp, while the rest is owned by its promoters Hero Group. The NBFC has set a target of ₹35,000 crore loan book size by 2020, Mint reported in September. A part of the equity funding received last year has been utilised for capitalising Hero Housing Finance C Ltd, the housing finance arm of the group incorporated in July last year.
“A number of private equity funds including TPG Capital have approached, but the talks are still in an early stage,” the first person added.
Hero FinCorp is led by Abhimanyu Munjal, the younger son of late Raman Munjal, elder brother of Pawan Munjal, chairman, MD & CEO of Hero MotoCorp. According to recent corporate filings, as of December 31, 2016, Hero FinCorp had a total credit portfolio of ₹9,192 crore. During FY 2016, the company reported a PAT of ₹81.5 crore on an asset base of ₹6,521 crore.
Spokespersons of Hero Fincorp, Credit Suisse and TPG Capital declined to comment.