Hero Fincrop IPO

Hero Fincorp has broadened its offerings from primarily two-wheeler loans, now providing diverse secured and unsecured loans for retail clients and MSMEs. In FY24, retail loans comprised 65.08% and MSME loans 20.80% of the company’s total assets under management (AUM).

Hero Fincorp asserts its strong connection with Hero MotoCorp Limited, utilizing its brand and large dealer network. In FY24, Hero MotoCorp held a 41.19% stake in Hero Fincorp and financed a large part of Hero MotoCorp's two-wheeler sales.

Hero Fincorp boasts a widespread, omnichannel distribution network covering 18,603 Indian pin-codes, leveraging digital and physical channels. They also assert a significant business volume sourced via 3,612 partners, encompassing used car dealers, digital collaborators, and direct sales agents (DSAs).

Hero Fincorp prioritizes a ‘customer-first approach’ to create bespoke financial solutions for retail and MSME clients, catering to diverse needs in metro, urban, and rural markets. This strategy boosts cross-selling, evidenced by a Product Per Customer (PPC) ratio of 4.25 in FY24, up from 3.15 in FY23 and 3.52 in FY22.

This company offers a complete digital experience by embedding technology across the entire loan lifecycle: onboarding, underwriting, servicing, and collections. Utilizing AI, ML, and real-time analytics, they aim to optimize customer acquisition, minimize wait times, and simplify processes, thereby enhancing operational efficiency and improving customer satisfaction levels.

The company asserts its asset quality has steadily improved. In FY24, the GNPA ratio was 4.02 percent, down from 5.11 percent in FY23 and 7.54 percent in 2022. The NNPA ratio also decreased, reaching 2.00 percent in 2024 from 2.69 percent in 2023 and 4.43 percent in 2022.

Hero Fincorp utilizes sophisticated data analytics to strengthen risk management by monitoring credit patterns and forecasting defaults. It employs a tech-enabled collections system, boosting efficiency to a 94.42% recovery rate in FY24, 95.07% in FY23, and 83.00% in FY22, facilitated by mobile app payments and a structured four-level collection team.

The company states it strategically balances current and non-current assets/debts, controlling both cash flow and borrowing cost exposures.

As of FY24, the company holds AA+ ratings with stable outlooks from CRISIL, ICRA, and CARE, alongside A1+ ratings from CRISIL, CARE, and ICRA for its commercial paper.

Operational revenue at the company steadily grew from Rs 4,738.65 Cr in FY22 to Rs 6,401.59 Cr in FY23, reaching Rs 8,290.90 Cr in FY24.