Hero Fincorp Unlisted Shares

Hero FinCorp halts unsecured loans, aims 14% growth in FY26 disbursements

Business Standard

2 min read

Hero FinCorp Halts Unsecured Loans to Strengthen Loan Book Ahead of IPO.

Expert Analysis :

Shift in Lending Strategy: Hero FinCorp has stopped issuing unsecured loans due to rising borrower overleverage. Unsecured lending will now occur only via partners and open markets.
Balance Sheet Focus: The company aims to focus on secured assets like loans against property, home loans, and vehicle loans, targeting a 14 per cent disbursement growth in FY26.
Improved Asset Quality: Crisil noted that strengthened credit underwriting and analytics investments helped reduce bad loans from 7.9 per cent in March 2022 to 4.3 per cent in March 2024.
Rising GNPAs Due to Indebtedness: Due to elevated average indebtedness in the unsecured personal loan segment, overall GNPAs rose to 5.0 per cent by December 2024.
AUM Exposure and Further GNPA Increase: Unsecured personal loans made up 30 per cent of AUM as of December 31, 2024, and GNPA increased further to 5.5 per cent in March 2025.
Q1FY26 Growth and Outlook: Hero FinCorp recorded 14 per cent Y-o-Y growth in Q1FY26 and expects steady disbursements, aided by a favourable monsoon and festive season demand.
Loan Portfolio: Disbursements dropped to ₹30,337 crore in FY25 from ₹32,145 crore in FY24. Outstanding loans stood at ₹49,876 crore as of March 2025.
Cost of Funds & Rate Environment: 55-60 per cent of liabilities are term loans. While MCLR benefits are limited, 10-15 per cent EBLR-linked loans offer some relief.

Takeaways

Hero FinCorp's pivot to secured lending and tighter credit controls aims to strengthen asset quality and disbursement growth ahead of IPO.

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