Hero FinCorp, the retail lending arm of Hero MotoCorp, raised Rs 1000 crore for expanding retail operations and exploring opportunities in the banking space.
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Hero FinCorp raised Rs 570 crore from private equity (PE) firm ChrysCapital, Rs 132 crore from Credit Suisse, and Rs 300 crore from the Hero Group.
Sanjay Kukreja, partner, ChrysCapital said that Hero FinCorp has all the ingredients to scale multifold and create significant shareholder value in the future.
Hero FinCorp, in which Hero MotoCorp has over 40% stake with the rest owned by its promoters, is targeting expanding its loan book to Rs 35,000 crore by 2020 from Rs 8,000 crore now. Hero FinCorp has grown from an asset size of Rs300 crore in 2013.
At least 35% of the two-wheelers sold in India are financed by lenders. According to an industry estimate, the size of India’s two-wheeler financing market is around Rs 30,000 crore per year, with HDFC Bank Ltd and Bajaj Finserv Ltd among the leading financing institutions.
Hero FinCorp plans to enter new product segments such as home loans and used two-wheeler loans and aims to augment existing businesses, with a special focus on used car finance, consumer durable/loyalty loans and loans to small- and medium-sized businesses.