Hero Motocorp to infuse Rs 700 crore in Hero FinCorp

Hero Motocorp (HMCL) said that its board has approved an investment of up to Rs 700 crore in one or more tranches, in Hero FinCorp (HFCL).

Hero FinCorp 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. It is an associate company of Hero Motocorp. HFCL's turnover for the year ended March 2021 was Rs 4,091.64 crore.

HFCL is in the process of raising capital of upto Rs 2,000 core through private placement for its business purposes. HMCL investment of Rs 700 crore is towards participation in this capital raise round. The 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.

Concurrently, the board of Hero Motocorp has appointed Dhiraj Kapoor as the company secretary & compliance officer of the company effective 1 February 2022.

Hero MotoCorp is the world's largest manufacturer of motorcycles and scooters, in terms of unit volumes sold by a single company in one year, the coveted position it has held for the past 20 consecutive years. The company has sold more than 100 million motorcycles and scooters in cumulative sales since its inception.

The company's board will meet on 10 February 2022 to consider and approve the unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2021.

On a consolidated basis, Hero MotoCorp's net profit dropped 22.4% to Rs 747.79 crore on a 9.9% decline in net sales to Rs 8,538.85 crore in Q2 September 2021 over Q2 September 2020.

The scrip shed 1.57% to end at Rs 2706.75 on the BSE yesterday.

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