Apollo commits $125m to India's Hero FinCorp

Hero Group, the parent of Hero Motorcorp, contributed a further USD 142m, according to a statement. Prior to this funding round, Hero Motorcorp held a 41.19% stake in Hero Fincorp. The proceeds will help the company diversify its product offering across retail and corporate lending.

Established in 1991 to serve the captive needs of the Hero ecosystem, Hero Fincorp launched a two-wheeler financing business in 2013, a corporate finance operation in 2015, and a used car finance operation in 2017. It subsequently expanded into other areas such as housing finance.

Nearly INR 140bn (USD 1.9bn) in loans were issued in the 12 months ended March 2021, while total assets rose to INR 27.7bn and overall customers surpassed 6m. Individual retail loans account for more than half of the book and more than 70% of activity is supported by term loans. Revenue and profit came to INR 40.5bn and INR 706m, from INR 37bn and INR 3.1bn the previous year.

Hero Fincorp’s retail business encompasses more than 4,100 touchpoints across 1,900 cities, towns, and villages, including a presence in 858 Hero Motorcorp dealerships. Over 1m two-wheeler loans were disbursed last year. On the corporate side, it operates out of 50 locations with a processing capacity of 800 loan applications per month.

“Our team is excited to strategically partner with the Munjal family to support them in scaling their financial services business, one of the Hero Group’s leading franchises,” said Matt Michelini, a partner and head of Asia Pacific at Apollo.

This is the firm’s third investment in Asia in nine months from its hybrid value strategy, which is a cross between debt and equity. Marc Rowan, co-founder and CEO of Apollo, told the AVCJ Private Equity & Venture Forum last year that yield and hybrid businesses – rather than private equity – would likely account for the bulk of the firm’s activity in the region.

Of Apollo’s USD 472bn in assets under management, about USD 5bn are in Asia. The firm has bulked up its presence in the region in recent months, moving Michelini – who also co-heads the hybrid strategy globally – to Asia, and recruiting a team from Commonwealth Bank of Australia to cover Asia Pacific credit.

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• Topics
• South Asia
• Expansion
• Financials
• India
• NBFCs
• Apollo Global Management