Hero Fincorp is an enterprise under Hero MotoCorp Ltd.; which is one of India's premier automobile industry giants. The Hero Fincorp was born out of Hero Honda Finlease Ltd; which had been granting two-wheeler loans to clients and working capital finance to the company's component suppliers and dealers since 1992. Since then Hero Honda Motors Ltd. became Hero MotorCorp Ltd.; and they restructured their financial services division under Hero Fincorp Ltd.; which has become one of India's fastest growing NBFCs since. From the year 2014, the company began to disperse commercial loans and loans on a property as well.
Today, the Hero Fincorp Pre IPO is one of the most attractive investment opportunities for bankers and financer alike because of its stability. Over the past five years, the company has shown amazing resistance to several market drops and low points. Even when the country was hit with the massive demonetization action in late 2016; the Hero Fincorp Ltd. showed stable dispersal of their usual number of loans. This proved against all odds that their shares will indeed be one of the more reliable blue-chip investments for steady returns. However, smart investors always look for the weaker aspects of a company, than their stronger arguments; so let's explore the few subjects which the most talented investment bankers would investigate about a company before putting their money behind.
(a) Who are The Big Backers in the Game?:
Any smart investor would look for the big financial corporations or baking brands which put their name behind an IPO. Before a company trades shares publicly, and even before smaller pre-IPO investments come in; certain large financial participants are known as "Big Backers" provide capital stability to a company. This capital investment ensures the future performance of the company after it has gone public and provides collateral to the investment. Credit rating agencies like CRISIL and ICRA have given this company an AA+ Stability Rating since 2015. Private equity firm ChrysCapital has already claimed an 11% stake, while the Swiss financial services company Credit Suisse holds about 2.5% of the total shares; putting the company's current value at more than INR 5,200 Crore! This strong international support is one of the key reasons that the Hero Fincorp Pre IPO has gained so much momentum since 2015.
(b) What are The Company's Future Objectives?:
If you follow the history of the company that is today Hero Fincorp Ltd.; they were a distinct division of Hero Honda that provided loans for their consumers to make more money from a single transaction with specific clientele. When they moved on to providing mid-term loans and capital finance to their associates and vendors; they engaged in industrial financial services. One of the most attractive elements of the Hero Fincorp Pre IPO is that they are heavily into industrial finances; which has far higher returns than public loans. Since they opened up to public services in 2014; they have added a billion plus potential consumers into the fold. With improved service plans and more financial products to offer across both markets; the company is bound to see a bright future with massive growth in our nation's developing economy.