Hero FinCorp: Financing the First Ride, Empowering the First Business

 

Let’s Uncover the World of NBFCs

NBFCs (Non-Banking Financial Companies) are financial institutions that provide loans, insurance and the investment services but do not operate like regular banks. They cannot take savings or current deposits but are known for quick and flexible lending.
NBFCs make money by borrowing from banks or investors and then lending at higher interest rates. They serve individuals, small businesses and people in rural areas. Major NBFCs in India include:

- Hero FinCorp - Two-wheeler, personal and SME loans
- Tata Capital - Personal, home and SME loans
- Bajaj Finance - Consumer loans, EMI cards
- Shriram Finance - Vehicle and business loans
- Muthoot Finance - Gold loans
- Mahindra Finance - Rural and tractor loans
- L&T Finance - Farm, infra and retail finance

---

Why Not Just Go to a Bank?

It’s a fair question. Banks offer loans at lower interest rates.
So why do millions still choose NBFCs like Hero FinCorp?
Here’s the real story:

1. Easy Approvals and Fewer Barriers for getting loan 

Banks usually follows strict lending rules requiring stable income, strong credit history and often a collateral but
NBFCs like Hero FinCorp serve borrowers that banks typically reject:

• First time applicants for loan

• Informal income earning people 

• people with low or no credit history

• And small ticket borrowers

Often there is no collateral requirements especially for the personal or two wheeler loans.

2. Faster and More Convenient Process

Hero FinCorp offers instant loan approvals at Hero dealerships along with fully digital processing and app based EMI tracking.
so, less paperwork and more speed especially for urgent needs like vehicle purchases or personal expenses.

3. Strong Presence in Rural and Semi Urban areas of India

Banks are concentrated mostly in cities. NBFCs operate in the places where formal credit is not easily available.
Hero FinCorp reaches deeply into Tier 2 , Tier 3 towns and rural areas leveraging dealer networks and the local agents trusted by the local community.

4. Offering Customized Lending Products

Unlike bank loans the NBFCs offer customized solutions like:

• Zero down payment on bike loans

• Short time SME credit

Loans bundled with insurance and the services designed to meet the specific needs of underserved customers.

5. They are more Human Centric and not just Credit Centric

Banks can be slow, process heavy and intimidating.
NBFCs like Hero FinCorp are faster, simpler and more approachable especially for the first time borrower.
NBFCs are succeed not by competing with banks but by serving those borrowers whom banks don’t look at.

Hero FinCorp isn’t just offering credit, it's empowering everyday aspirations.

---

Financial Overview

Asset Quality Metrics
Metric	Value (%)
Gross NPA	2.79%
Net NPA	1.30%

 

 Gross NPA (2.79%):
This means 2.79% of all loans given are not being repaid on time and these are the total bad loans of the company.
This is the reasonable level for an NBFC which shows that most borrowers are paying on time.

 Net NPA (1.30%):
After keeping aside money to cover possible losses only 1.30% of loans are still at risk, this is the actual amount still in danger of not being recovered.
A low Net NPA means good risk management and strong recovery efforts by business

 

Solvency Ratios
Debt to Equity	8.63x
Debt to Assets	.90x
Interest Coverage	1.05x

 

Debt to Equity: High leverage but common in NBFCs. It shows the company funds growth mostly through borrowings.

Debt to Assets: 90% of total assets are financed via debt normal for NBFCs

Interest Coverage: Just enough earnings to cover interest. Indicates tight liquidity and limited buffer but very common in NBFCs due to borrowing for lending.

 

Valuation Ratios
Earnings Per Share (EPS)	₹8.63
Price to Earnings (P/E)	172.7x
Price to Book (P/B)	3.31x
Market Cap to Sales	2.73x

EPS: Indicates modest profitability per share, room to grow as lending book scales.

P/E: Very high, suggests either high future growth expectations or low current profits. FinCorp

P/B: Fairly valued for a strong NBFC; shows investors are willing to pay 3.3x for every ₹1 of net assets.

MCap/Sales: Slightly high, reflects premium on expected growth and efficient revenue generation

---

How NBFCs Became the Silent Engines Driving India’s Growth

In developed economies the banks lend easily, credit is cheap, interest rates are low and systems are mature. But in a developing country like India the things work differently. Millions of small businesses and individuals are turned away by banks not because of bad intent but because they lack collateral, formal income or a credit score.

This is where NBFCs step in as unsung heroes. They lend where banks hesitate. They believe where others doubt and in that belief they lend to the backbone of India's economy - The SME Sector.

Hero FinCorp, with its deep focus on two wheeler and SME lending is not just financing businesses it's fueling aspirations, driving jobs and powering India's growth story.

---

Final thoughts and Talk of Analyst

Let’s be clear NBFCs are the future of India’s growth story. As banks stay cautious and paperwork heavy. The NBFCs step in where it matters most, giving people and small businesses the loans they need to move forward and in this credit revolution, Hero FinCorp plays a critical role.

With a strong grip on SME loans and two wheeler financing, Hero FinCorp is plugged into two of India’s fastest growing engines and here’s the twist it’s backed by Hero MotoCorp, the world’s largest two-wheeler company present in over 40 countries. So when someone buys a Hero bike. The chances are they’ll finance it through Hero FinCorp. Why? Because it’s easier, faster and already in the system.

Now, let’s talk numbers. The valuation may look expensive today but that’s how this industry works. Early profits are small but the runway is long. What really matters is that everything else is in place.

The advice by Analyst:
Keep an eye on SME growth and vehicle sales. As they rise, Hero FinCorp rises. For investors looking ahead this could be one of those stories that reward you for being early. To explore investment opportunities in unlisted gems like Hero FinCorp, visit www.sharescart.com  where India’s next big stories begin.