Ahead of IPO, Hero FinCorp writes off bad loans worth around Rs 1,200 crore

Hero FinCorp Implements Pre-IPO Strategy to Enhance Transparency and Propel Growth

Expert Analysis:

• Strategic Loan Write-Off Pre-IPO: Strategic write-off of bad loans worth Rs 1,200 crore pre-IPO for enhanced financial transparency.

• Robust Growth Metrics: Hero FinCorp's assets under management surged by 25% to Rs 49,127 crore in the first nine months of FY24.

• Operational Resilience and Profit Surge: Profits soar by 168%, showcasing operational resilience amidst challenges. Disbursals increased by 26% to Rs 24,979 crore over the same period.

• Profit After Tax: Despite significant write-offs, the company's profit after tax increased by 168% to Rs 736 crore.

• ICRA:

  • ICRA highlights Hero FinCorp's improved asset quality profile, citing a reduction in gross and net stage 3 ratios to 4.7% and 2.3%, respectively, by December 31, 2023.

  • ICRA attributes the asset quality improvement to increased collection efficiency and significant write-offs, totaling Rs 1,176 crore in 9M FY2024.