₹815
*Average Price as per 23 December, 2024
Fundamentals
FACE VALUE
10
BOOK VALUE
452.9
NO OF SHARES
127306674
EPS
50.04
SALES
8359.72
INDUSTRY PE
55
DIVIDEND
10
DIVIDEND YIELD
0.51
PE
39.35
PB
4.35
PS
3
MARKET CAP
25066.68
EQUITY
127.31
PAT
637.05
MESSAGE
2023-24
OVERVIEW
Hero Fincorp Ltd. is the financial services arm of India's largest two-wheeler maker Hero MotoCorp Ltd.
It offers a wide range of solutions including two-wheeler financing, SME Lending, Personal Loans etc.
Established in 1992 as Hero Honda FinLease Limited, Hero Fincorp underwent a name change after Hero MotoCorp acquired full ownership of 'Hero Honda' following Honda Motor Company's departure from their joint venture.
Currently, the Company’s footprint extends to nearly 2000 retail outlets | 2000 corporate clients | 1000 dealerships, spanning across 1900 cities, towns, and villages.
Rating: “AA+ with stable outlook”: by CRISIL, ICRA and CARE.
The Company provides a wide portfolio of financial products including:
Retail Loans | Corporate Loans |
Two-Wheeler Loans | SME and Commercial Loans |
Used-Car Loans | Supply Chain Financing |
Personal Loans | Working-Capital Loans |
Retail Business:
SME & Corporate Business:
In its latest funding round (4th Feb 2022), Hero Fincorp Ltd. secured ₹2,000 crore ($267 million) from several investors for business expansion plans.
Date | Company | Investment Amount |
Feb 2022 | Apollo Global Management | ₹937 crore ($125 million) |
Feb 2022 | Hero MotoCorp | ₹700 crore ($94 million) |
Apollo Management’s stake in Hero Fincorp post funding: 10%(Approx)
Estimated Valuation: 9370 Crs
Number of outstanding Shares: 12,73,06,674
Price Per Share: Rs. 736 (As of Feb 22)
Segment | Percentage |
Retail Lending | |
· Two-Wheeler Lending | 23% |
· Used Car Financing | 5% |
· Personal Loans | 26% |
· Home Loans | 7% |
Retail SME Lending (which includes unsecured business loan, loan against property, supply chain finance) | 19% |
Corporate Lending | 15% |
Lending on the CROMS Platform | 5% |
Total | 100% |
INSIGHT
INR in Crs
PARTICULARS | FY24 | FY23 | FY22 |
REVENUE | 8291 | 6402 | 4739 |
EBITDA | 4055 | 2901 | 1399 |
PAT | 637 | 480 | -192 |
EPS | 50 | 38 | -15 |
Highlights (Standalone):
Growth in Receivables under Financing Activity (Leasing Portfolio):
Total Income:
Profit Before Tax (PBT):
Profit After Tax (PAT):
Particulars | Hero Fincorp | Bajaj FinServ | Shriram Finance |
Total Income | 6,402 Crs. | 82072 Crs. | 30508 Crs. |
PAT | 480 Crs. | 12210 Crs. | 6011 Crs. |
Net Profit Margins | 7.5% | 14.8% | 19.7% |
CMP (03/05/24) | ₹ 1699 | ₹ 1640 | ₹ 2608 |
Market Cap | 21,629 Crs. | 2,61,580 Crs. | 97,992 Crs. |
P/E Ratio | 45 | 40 | 16.25 |
P/B Ratio | 4.12 | 4.33 | 2.00 |
Relevance of NBFCs in the Indian landscape:
NBFCs have emerged as a significant force in promoting financial inclusion in India by successfully catering to the underserved segments of society.
The growing market share of NBFCs can be attributed to the lighter and more flexible regulations imposed by the RBI, as well as their focus on specific sectors and niche markets.
Key Highlights
Vehicle Finance Industry Trends – India
The two-wheeler loan market across India is estimated to be valued at over 12 Billion U.S.D by 2025.
Vehicle loans have surged by 137% in the past 3 years, becoming the second-largest loan segment after home loans.
Vehicle Finance Industry In India: CAGR of 11% | 2022-2027.
The rapid growth is driven by:
Key Trends:
(Source: BCG Report – Dec 23, ET-BFSI, ICRA, Statista, Mint)
17TH October 2023: Hero Fincorp, has decided to initiate a substantial IPO in 2024. The targeted size is approximately ₹4,000 crore. The planned offering will comprise a mix of primary and secondary share issuances. This strategy aims to raise growth capital while facilitating an exit opportunity for certain investors.
(Source: MoneyControl)
Key Strengths:
Key Weaknesses
Opportunities:
Threats:
The share price of Hero Fincorp Unlisted Shares was Rs. 935 when they were first introduced in the unlisted market in March 2021.
Since then, the stock price reduced steadily and reached Rs. 680 by Jan 2023.
The share price took off post that due to improving financials and currently is Rs. 1680.
SECONDARY NAME
ISIN
CDSL
NSDL
INDUSTRY
SECTOR (READ ONLY)
SHARE HOLDINGS
Name of Shareholder | Holdings |
---|---|
Hero Motorcorp Ltd | 41.18 % |
Bahadur Chand Investments Ltd | 20.33 % |
Otter Ltd | 10.12 % |
Other | 28.37 % |
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