Hero MotoCorp to invest Rs700cr in Hero FinCorp; Stock rises over 1.5%

25 Jan 2022 , 11:35 AM

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he Board of Directors of Hero MotoCorp Limited (HMCL), in its meeting held on January 24, 2022, has approved an investment of up to Rs700cr in one or more tranches, in Hero FinCorp Limited (HFCL). The investment is subject to execution of definitive documents and completion of certain conditions customary to a transaction of this nature, the company said in a filing on Monday.

The Board has also appointed Dhiraj Kapoor as the Company Secretary & Compliance Officer of the Company effective February 1, 2022. Dhiraj Kapoor is a fellow member of the Institute of Company Secretaries of India and a law graduate, with more than 20 years of experience in corporate laws and compliances.

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.

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 Rs4,091.64cr. 

At around 11.36 am, Hero MotoCorp Ltd was trading at Rs2752.05 per piece up Rs45.30 or 1.67% from its previous closing of Rs2,706.75 per piece on the BSE. The scrip opened at Rs2,680 and has touched a high and low of Rs2,766.80 and Rs2,662.95 respectively.

“HFCL is in the process of raising capital of upto Rs2,000cr through private placement for its business purposes. HMCL investment of Rs700cr is towards participation in this capital raise round. Indicative time period for completion of the acquisition April 30, 2022 (tentative),” company said.