Original disclosure @ IFC website
Updated in EWS Jul 22, 2021
Disclosed by Bank Apr 7, 2021
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According to the bank documents, the proposed investment comprises a secured debt investment of up to US$100 million in Hero Fincorp Limited (HFCL or the Company). HFCL’s core business lies pre-dominantly in the provision of financing two-wheeler loans and micro, small and medium enterprises (MSME) loans to clients in low-income states (LIS) of India. Its consolidated loan portfolio composition includes two-wheeler finance (37%), used car finance (7%), personal loans (11%), home loans (6%), MSME loans (21%) and corporate loans (18%).The proposed Project will allow HFCL to expand its two-wheeler financing to self-employed individuals or MSME borrowers (largely micro & small enterprises) in the low-income states (LIS) of India. The Company will also deploy three times the IFC loan amount, through its own resources and other sources of funding, towards the same target beneficiaries over the next 3 years.
The investment comprises a secured debt investment.
Role of IFC:
1) Financing structure: derived through provision of long tenor, counter-cyclical financing, less easily available in a difficult market environment due to COVID-19, thus helping the Company diversify its borrowings profile. 2) Risk mitigation: IFC investment would signal comfort for capital providers and operational partners as the company positions for growth
HFCL is part of the Hero Group of companies in India (promoted by the Munjal family). The shareholders of HFCL include: Hero MotorCorp Limited (HMCL, 41.2%), investment companies of the Munjal family (38.3%), Credit Suisse (2%), Chrys Capital (10%) and Apis Growth (2%) and HFCL's dealers/employees (6.5%).
HMCL is the largest operating company of the Hero Group and is the largest two-wheeler manufacturer in the world (in terms of unit volumes), for the last 19 years with operations in 40 countries.
No contact information given at the time of disclosure.
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