Hero Moto-Corp Board of Directors, in its meeting held on 24th January 2022, has approved an investment of up to INR 700 crore in one or more tranches, in Hero FinCorp Limited (HFCL). The investment is subject to the execution of definitive documents and completion of certain conditions customary to a transaction of this nature.

HFCL (Hero Fin Corp Limited)

Hero FinCorp Ltd. primarily deals in financing retail and corporate customers through products including two-wheeler financing, term loans, working capital loans, loan against property, bill discounting, leasing, etc. Turnover for the year ended March 2021 was Rs. 4,091.64 Crore

Total investment to be raised by Hero-Fin Corp

HFCL is in the process of raising capital of upto Rs. 2,000 core through private placement for its business purposes and out of that Rs.700 Crores will be infused by Hero MotoCorp.

% of shareholding of Hero-Moto Corp?

Investment is being made in CCPS (Compulsorily Convertible Preference Shares) to be issued by HFCL. Prior to the proposed investment, HMCL's shareholding in HFCL is 41.2%. The exact shareholding of HMCL in HFCL post the investment, will be determined upon completion of capital raise round by HFCL.

What is for Unlisted Shareholders of Hero Fin-Corp?

It would be very interesting to see at what value the preference shares will be issued by the company to Hero Moto-Corp. That will benchmark the valuation of Hero-Fin Corp in the unlisted market. 2 years back, Hero-Fin Corp raised money from private investors at ~Rs.829 per share.