Annual Report: 2022
Soaring Higher
The document is the 31st Annual Report for 2021-22 of Hero FinCorp Limited. The report includes a tribute to Dr. Brijmohan Lall Munjal, Founder & Chairman Emeritus of the Hero Group.
Key Financial Highlights:
Chairman's Message (Dr. Pawan Munjal):
The Chairman acknowledged the challenges posed by the COVID-19 pandemic and emphasized the company's commitment to its motto: 'Do it! Move it! Make it Happen!'. Standalone Disbursals increased from INR 13,822 Crore in FY 2021 to INR 18,543 Crore in FY 2022 (35% YOY increase). Consolidated Asset Book increased from INR 27,490 Crore in FY 2021 to INR 32,953 Crore in FY 2022 (20% YOY increase). Customer base grew from 6 million in FY 2021 to 7.5 million in FY 2022 (25% YOY increase), and the employee base grew from 7,800+ to 10,400+ (33% YoY increase). India is projected to be amongst the fastest-growing economies with a growth projection of 6.4% in FY 2023. The company was recognized as a Great Place to Work (Overall & BFSI) for the 5th consecutive year. The company is adopting an Agile Operating Model and aims to be one of the largest and most customer-focused Financial Institutions in India.
Jt. MD & CEO's Message (Abhimanyu Munjal):
The second half of the year contrasted with the first, with improvements following vaccinations and reduced restrictions. The company showed 34% YoY growth in Disbursements, growing from INR 13,822 Cr. in FY-21 to INR 18,453 Cr. to FY-22 (standalone figures). The Consolidated Asset Book grew by 20% YOY, from INR 27,490 Cr. in FY-21 to INR 32,953 Cr in FY-22. Hero FinCorp has over 4,100 touch points, spread across over 2,000 locations in India. The company is strengthening its Collections Infrastructure and Risk Management Capabilities, and focused on making Retail Collections more Digitally inclined. The company prioritized Process Improvements, Fraud Prevention, and strengthened Underwriting Scorecards. Collections Efficiency improved and Digital Payments increased. The company’s Collections Efficiency in quarter 4 was better than pre-Covid, and they delivered highest ever Resolution Rates. An Agile Transformation Office was set up with the motto: Committed To Perform While We Transform. Customer Service Capabilities were strengthened Online (through the app) and Offline. FY-23 has started off positive.
Our Key Principles
CSR Initiatives Hero FinCorp's CSR initiatives focus on Financial Literacy and Skilling, Sustainability & Environment, Aiding Rural Economy & its Stakeholders, Support and Empowerment for Women & Children. Raman Kant Munjal Scholarships: The program has supported over 54 meritorious and deserving students this year, out of which 60% are girls. Pathakshala: A Teachers Training Program has trained 255 teachers impacting 25+ schools. UMANG: Employee Volunteering Activities impacted 6,500+ people. Be My Santa: 150 heroes donated gifts for 600 delighted children. International Women's Day: 125+ Hygiene Kits Donated by 50+ heroes. Donation for BPL Students Studying in Raman Munjal Vidya Mandir: Hero FinCorp donated Rs. 4.5 lacs to support education. Vaccination Support Van for Rural Areas: Hero FinCorp donated a VANO Van to the Raman Kant Munjal Foundation.
Our Journey:
Numbers at a Glance:
The board report indicates the authorized share capital of the company has increased, and provides a financial summary comparing 2021-22 and 2020-21. The company is registered with the Reserve Bank of India as a Systemically Important Non-Banking Financial Company. The Board does not recommend payment of any final dividend on the equity shares for the FY 2021-22. There was no change in the nature of business of the Company during the financial year ended March 31, 2022. The directors also affirmed adherence to regulatory guidelines and standards.
Receivables under financing activity including leasing portfolio has grown by 20% from Rs. 25,121 crore in FY 2020-21 to Rs.30,231 crore in FY 2021-22. The total income has shown growth of 10% from Rs. 4,092 crore in FY 2020-21 to Rs. 4,491 crore in FY 2021-22. Profit/ (Loss) before tax decreased by 384% from Rs. 90.07 crore in FY 2020-21 to Rs. (256.13) crore in FY 2021-22, accordingly the Profit/(loss) after tax registered a decrease of 375% from Rs. 70.62 crore in FY 2020-21 to Rs. (194.00) crore in FY 2021-22.
COVID-19 has spread across India. As the company enter FY22-23, the third wave of COVID-19 has not had any significant impact on its business. Commercial papers worth Rs. 4,390 crore (On Face Value) were issued by the Company during the year under review. Secured term loans worth Rs. 6,250 crore (including Rs.50 crore in Foreign Currency Loan) and Secured ECB of Rs. 868.65 crore were borrowed from different banks/FIs during the year under review. As on March 31, 2022, the total outstanding bank/FI lines (secured and unsecured) of the Company stands at Rs. 20,014.78 crore. The Capital Adequacy Ratio (CAR) is 15.60% as on March 31, 2022, which is well above the RBI mandated norm of 15%.
Board Committees include: Audit Committee, Stakeholder Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, and Committee of Directors.
Key Managerial Personnel include: Mrs. Renu Munjal, Mr. Abhimanyu Munjal, Mr. Jayesh Jain, and Mr. Shivendra Suman.
The company also outlines its SWOT analysis, including strengths like a strong brand, PAN India presence, and experienced management; weaknesses like business linked to GDP and potential stress in retail portfolios; opportunities such as a large untapped market and technology upgrades; and threats such as the pandemic, inadequate bank finance, and competition.
The company's future strategy involves periodical review of pandemic risks, focusing on digital initiatives, utilizing data analytics, enhancing loan portfolio quality, maintaining customer loyalty, and promoting work from home and employee up-skilling. The outlook is positive, with the Indian economy expected to continue its growth trajectory.
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