RESEARCH REPORT

UPDATE DATE – 12 May 2020

CONTENTS

1. Usage of this report: ...................................................................................... 3

2. Copyright: ....................................................................................................... 3

3. Risk Disclosure & Agreement: ........................................................................ 3

4. About Unlistedkart: ........................................................................................ 6

5. Focus: ............................................................................................................. 7

6. Basic Information Report: .............................................................................. 7

6.1. Company Highlights: ................................................................................ 7

6.2. Company’s Logo/Symbol/Representation: .............................................. 8

6.3. Listing information if applicable: ............................................................. 6

6.4. Primary sector and industry: ................................................................... 8

6.5. Major shareholders/ownerships/directors of a firm:.............................. 9

6.6. Acquisitions/Funding/ Investments: ........................................................ 9

6.7. Borrowings/Charges: ............................................................................. 10

6.8. Principal Products or Services:................................................................. 6

7. Update Report: ............................................................................................. 10

8. Key Highlights Report: .................................................................................. 10

9. Key Financial Highlights Report: .................................................................. 11

9.1. Key financial highlights: ......................................................................... 11

9.2. Financial Statements: ............................................................................ 12

9.3. Balance Sheets: ...................................................................................... 12

9.4. Ratio Analysis: ........................................................................................ 14

9.5. Schedule breakup(Products/services): .................................................. 15

10. Company and Directors Report: ............................................................... 16

11. Other Miscellaneous information: ............................................................ 16

12. Information source links: .......................................................................... 17

Usage of this report: ........................................................................................... 17

Copyright: ........................................................................................................... 18

1. USAGE OF THIS REPORT:

Research report update may have information on overview of the industry, company, certain stocks, recent market trends, news and certain publicly available information. The report can include varying levels of detail, and while there is no industry standard when it comes to format, this report uses the most common elements to all thorough and effective information reports. Throughout the report below there may be some information that could be considered essential, as well as assumed as tips for using our report as effective as possible for any informed decisions making by the users/stakeholders accessing this report. This report is prepared based on the request of the recipient and is based on the publicly available information and in consultation with subject matter experts. While due care has been taken in collecting information and preparing the report, Unlistedkart does not guarantee the accuracy, completeness, reliability, timeliness, non-infringement, title, merchantability, or fitness for any particular purpose of the content. Unlistedkart is not liable for any damage(s) or loss(es) of any kind, because of reliance on or reference to the contents of this report. In no event the liability of Unlistedkart LLP, its directors, analysts, consultants, or employees or any of their data providers for any damages (direct, indirect, special or consequential) for whatever cause shall exceed the amount charged by unlistedkart for making this report available.

2. COPYRIGHT:

Copyright © Unlistedkart LLP. This report is prepared, owned, and distributed by Unlistedkart. The report is meant for the sole and exclusive use of the recipient to whom it is addressed by Unlistedkart. This report either in full or in part, cannot be redistributed and/or reproduced in any form either electronic or physical, without written consent of the owner.

3. RISK DISCLOSURE & AGREEMENT:

There is no assurance that any of the companies we share information about will go public soon, if ever, nor are there any assurances that the securities of those companies will become publicly traded or unrestricted. Private investments are not appropriate for all investors. This asset class involves a high

degree of risk, volatility, and illiquidity, beyond that associated with traditional asset classes. Investors should have the financial ability and willingness to accept the risks (including, among other things, the risk of loss of their entire investment and the lack of liquidity) that are characteristic of these types of investments. Investors should consider private investments a supplement, comprising a modest portion of an overall investment strategy. Investors are solely responsible as advised before making an investment decision with respect to any fund to review carefully the respective offering documents (including any relevant underlying agreements), and the related subscription documents regarding the Funds and are responsible for performing such due diligence as deemed appropriate, including consulting their own legal, tax, ERISA, and financial advisers. Any information provided by UNLISTEDKART and its affiliates should not form the primary basis of the investment decision. This material is based upon information UNLISTEDKART believes is reliable. However, UNLISTEDKART does not represent or warrant that it is accurate, complete, and/or up-to-date. UNLISTEDKART does not accept any responsibility to update any opinion, analyses or other information contained in the material. This material is for your general information only and solely to assist you in deciding whether to proceed with a further investigation of the Funds. It is not an offer or solicitation to buy or sell any security, which can be made only through the delivery of formal offering document(s) which include, among others, a confidential offering memorandum, limited liability company operating agreement, subscription agreement, and related subscription documents. Such formal offering documents contain additional information not set forth herein, including information regarding certain risks of investing, which such additional information is material to any decision to invest in the Funds. The information contained herein is based on certain assumptions, hypotheses, estimates, and anticipated outcomes which may or may not be true. Our research report update or/and our Unlistedkart Website contains forward-looking statements, including observations about markets and industry and regulatory trends as of the publication date of this information. Forward-looking statements may be identified by, among other things, the use of words such as “expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar expressions. Forward-looking statements reflect the Funds'

views as of such date with respect to possible future events. Actual results could differ materially from those in the forward-looking statements because of factors beyond the Funds' control. Customers are cautioned not to place undue reliance on such statements. No party has an obligation to update any of the forward-looking statements on the report or website. Charts, tables, and graphs contained in this report or our website are not intended to be used to assist the reader in determining which securities to buy or sell or when to buy or sell securities. Performance may fluctuate, especially over short periods. Statements made herein that are not attributed to a third-party source reflect the views and opinions of UNLISTEDKART. No representation is made that any investor will or is likely to achieve results comparable to those shown or will make any profit or will be able to avoid incurring substantial losses. The past performance of UNLISTEDKART, its principals, partners, or employees, or any of the securities referred to herein is not indicative of future returns. Performance results are generally net of applicable fees and reflect reinvestment of profits. Investment returns will fluctuate and may be volatile, especially over short time horizons. The Funds' investment strategy involves investments for which no public market exists. Little public information exists about many of these investments, and the Funds will be required to rely on its diligence efforts to obtain adequate information to evaluate the potential risks and returns involved in these investments. Therefore, the greater risk that the Funds may invest based on incomplete or inaccurate information may adversely affect the Funds' investment performance, which could impact both initial and ultimate valuations. This could subject the Funds to greater risk than investments in established publicly-traded companies or businesses and negatively affect the Funds' investment returns. There is no assurance that the Funds' diligence efforts will result in an investment being successful. There is no guarantee that UNLISTEDKART will be successful in achieving the Funds' investment objectives. An investment in the Funds contains risks, including the risk of complete loss. Any performance reflected herein is estimated, is based on incomplete information and is subject to change. Actual results, when available, may differ. Given the nature and number of companies underlying these securities, the Funds should be considered a more volatile and risky investment. The returns for the Funds have not yet been audited and may change as a result of audit. Any trademarks or business names in this report or Website are included solely

for informational purposes and, in certain cases, as examples of companies in the asset class in which the Funds may invest, and any such trademarks and business names are owned by their respective trademark owners. While the companies represented by such trademarks and business names may be invested in by the Funds, there is no guarantee that such companies will be invested in by the Funds.

4. ABOUT UNLISTEDKART:

Unlistedkart is a research consulting firm headquartered in Bangalore with also

an office in Mumbai, serving Clients Globally. It has been helping customers

make wise investment decisions with the objective of putting cognition into

Asset classes which are ignored from a research perspective.

The research is derived from industry knowledge and secondary data searches

and also focuses on primary research as the scientific basis for our advisory

services. Our research services include writing and publishing a basic report that

analyzes the company's business model and competitive position in the

industry, projecting out the financial statements, and providing a valuation the

analysis also provides regular updates on business trends and changes in the

outlook.

Our team provides value-added support ranging from highly customized and

complex analysis, on Unlisted securities, in-depth analysis of AIF’s & Market

linked debentures. In general, these are assets classes with high standard

deviation and need a deep level of understanding before a decision could be

made to invest. With board comprising of mostly ex-bankers we understand the

dynamics of the wealth management fraternity well. Hence, we have stayed a

product support company that caters to large wealth management firms and

family offices across the country. We have been fortunate enough to be

associated with some of the large names in the industry which has intern

resulted in closures in excess of $100 million of Secondary transfers on VC Funds

/ AIF’s and $150 million of Pre IPO opportunities.

5. FOCUS:

6. BASIC INFORMATION REPORT:

Hero FinCorp (an associate company of Hero MotoCorp), is an Indian Non-

Banking Financial Company (NBFC). The company was launched in 1992 as

Hero Honda Finlease Ltd by extending working capital loans and medium-term

finance to component suppliers and dealers of parent firm Hero MotoCorp.

The company provides loans against property to corporates, partnership firms and self-employed individuals for up to 15 years with customizable interest rates.

6.1. COMPANY HIGHLIGHTS:

Age (Incorporation Date)

28 Years

Company Status Active

Company Type Unlisted Company Sub-Category

Indian Non-Banking Financial Company (NBFC)

Industry/Sector Financial Services Company Email ID investors@herofincorp.com

Company Website www.heroincorp.com Company Address 34, COMMUNITY CENTRE, BASANT LOK VASANT VIHAR

NEW DELHI - 110057 Holding Company Hero MotoCorp

Holding Company Hero MotoCorp

Company Name Hero FinCorp Limited

Industry & Sector Financial Services Product Type Unlisted Securities

6.2. COMPANY’S LOGO/SYMBOL/REPRESENTATION:

6.3. PRIMARY SECTOR AND INDUSTRY:

Two-Wheeler Loans: The Company claims to have more than 4,00,000 active two-wheeler loans.

Loyalty Customer Personal Loan: Hero FinCorp provides financing options for its existing customers who has good track record of repayment.

Used Card Finance: Hero FinCorp has partnered with leading auto portal Cradekho.com to provide comprehensive financing options for used car buyers.

Loans Against Properties: The Company has made quite some contribution to its financial statements through loan against properties. Competitive target has been achieved in this sector

SME & Commercial Loans: The company offers – Working Capital Loans, Working Capital Demand Loan, Project Finance, Acquisition Financing etc…

6.4. MAJOR SHAREHOLDERS/OWNERSHIPS/DIRECTORS OF A FIRM:

Board of Directors:

Name Designation Abhimanyu Munjal MD & CEO

Jayesh Jain CFO Ajay Sahasrabuddhe COO

Share Holding Pattern:

Particulars % Hero MotoCorp Limited 41.18 Hero Investcorp Pvt Ltd 2.88

Credit Suisse Limited 2.24 ChrysCapital 11

Bahadur Chand Investment Pvt Ltd

20.33

Promoters Group 2.9 Otter Limited 10.56

6.5. ACQUISITIONS/FUNDING/ INVESTMENTS:

• In the last funding round, Hero FinCorp was valued at close to Rs4,000

crore, Since then, the book size has grown significantly.

• In September 2016, Hero FinCorp announced that they have raised

about INR 1002 crore from internal as well as external sources.

Around INR 702 was raised from ChrysCapital, a private equity firm, and Credit Suisse, a Swiss financial services firm. The remaining INR 300 Crore, was raised from the Hero Group

6.6. BORROWINGS/CHARGES:

7. UPDATE REPORT:

Face Value ₹ 10 Per Equity Share

ISIN INE957N01016

8. KEY HIGHLIGHTS REPORT:

The company has been rated as AA+/Stable by rating agencies such as CRISIL.

The Company had an excellent year aided by strong volume growth across lines of business. During FY 2018-19, the Company had taken various measures to strengthen its business model and continue its growth momentum such as the launching of various new products and variants.

The company provides loans against property to corporates, partnership firms and self-employed individuals for up to 15 years with customizable interest rates.

Hero Fincorp’s Capital Adequacy Ratio (CAR) stands at 19.30% as on March 31, which is well above the RBI norms of 15%.

F Y 1 5 F Y 1 6 F Y 1 7 F Y 1 8 F Y 1 9

1038 2227 3303 37027632

150625 1654 3189

3214

1

698854 1165 1112 1486

BORROWINGS (₹ CR)

Term Loans NCDs #REF! WCDL/CC/OD

9. KEY FINANCIAL HIGHLIGHTS REPORT:

9.1. KEY FINANCIAL HIGHLIGHTS:

Hero Fincorp Financial Growth:

Particulars (₹Cr) 2016-17 2017-

18 2018-

19 Asset under

management 8000 9815 13542

Total Revenue 1332.69 1814.0

3 2492.5

2 Profit/loss before

tax (PBT) 200.62 247.94 413.66

Profit/loss after tax (PAT)

130.41 162.45 268.37

PAT growth % 60.01 24.57 84 Revenue growth % 72.77 36.11 47 Earnings per share

(EPS) 15.38 17.42 25.97

The total revenue has shown an impressive growth of 47% from INR

1,814.03 crore in FY 2017-18 to INR 2,492.52 crore in FY 2018-19.

Profit before tax (PBT) increased by 92% from INR 247.94 crore in FY

2017-18 to INR 413.66 crore in FY 2018-19

The Profit after tax (PAT) registered an increase of 84% from INR

162.45 crore in FY2017-18 to INR 268.37 crore in FY 2018-19.

9.2. FINANCIAL STATEMENTS:

Standalone & Consolidated – FY 2018 -19:

Particulars 2018-19 2017-

18 2018-19 2017-18

Total Revenue 2,492.5

2 1691 2,518.47

1,694.51

Profit before Costs, Dep & Exp 1,557.6

7 925.38 1,540.63 922.54

Less: Finance Costs 1,119.9

6 683.66 1,124.71 683.66

Depreciation & Amortization Exp 24.05 26.5 24.88 26.52

Profit Before Tax 413.66 215.22 391.04 212.36

Less: Provision for tax Current 198.05 122.19 198.05 122.19

Deferred 52.76 52.08 52.76 52.76 Profit After Tax 268.37 145.83 245.75 142.93

Other Comprehensive income/loss

1.35 0.48 1.36 0.48

Add: Balance of profit brought forward

221.5 141.63 218.07 141.1

Balance available for appropriation

488.52 286.98 462.46 283.55

Appropriations

Dividend - Proposed 29.77 13.9 29.77 13.9 Corporate Dividend Tax - Current

Yr 6.12 2.83 6.12 2.83

Transfer of Satutory Reserve 53.68 32.5 53.68 32.5

Transfer of General Reserve 26.84 16.25 26.84 16.25

Other Adjustments Balance Carried to Balance Sheet 372.11 221.5 346.05 218.07

Dividend(%) (Proposed) 42.5 28 42.5 28

Earnings per Share (EPS) Basic 25.97 15.63 23.78 15.32

Diluted 25.92 15.61 23.73 15.3

9.3. BALANCE SHEETS: HeroFinCorp as 31st March 2019:

Particulars 31-Mar-

19 31-Mar-

18

Assets Fianancial assets

Cash & Cash equivalents 2 43.43

Loans 55551.41 Investments 10010.56 4624.94

Other Financial assets 18.64

Non Financial Assets

Current tax assets 14.04 1.01

Deferred tax assets (net) 21.51 21.51

Property, plan and equivalent 376.75 125.23

Other intangible assets 508.46

Intangiable assets under development 15.59

Other non financial assets 167.93 28.55 Total Assets 66,686.89 4,844.67

Liabilities & equity

Financial Liabilities

Trade Payables total outstanding dues of micro & small ent

total outstanding dues of creditors other than micro & small ent

340.45 64.76

Debt securities 7169.35

Borrowings (other than debt sec) 22717.45 Subordinated liabilites 2467.91

Other financial liabilites 11158.32 68.58

Non-Financial liabilities Provisions 96.51 9.57

Other non financial liabilities 201.57 44.24

Total Liabilities 44,151.56 187.15

Equity Equity share capital 25000 5000

Other equity 2464.67 342.48

Total equity 22535.33 4657.52

Total liabilities & equity 66,686.89 4,844.67

9.4. RATIO ANALYSIS:

Cost of Income Ratio (%) & Opex to Average Ratio:

Capital Adequacy Ratio & Debt Equity Ratio:

9.5. SCHEDULE BREAKUP (PRODUCTS/SERVICES):

Loan Assets Mix (%, ₹ Cr)

Loan assets, Gross NPA, Gross NPA to Loan assets (%)

10. COMPANY AND DIRECTORS REPORT:

Abhimanyu Munjal

The year 2018 -19 has been a transformative one for us at Hero FinCorp. In these 12 months, we have covered Significant growth and have also laid the foundation for a solid, stable and promising future. Key highlights: The launch and scale up of new lines of business Strengthening our governance, monitoring and legal machinery We made significant investments in IT Infrastructure and developed Sale Forced based sourcing for our Retail, SME & Housing Business lines

He further added, extremely positive about our future as an organisation and our role in India's Financial Services Sector.

MD & CEO, Hero Fincorp Ltd.

11. OTHER MISCELLANEOUS INFORMATION:

Hero Fincorp Driving Digital Financial inclusion

Hero FinCorp collaborates with key FinTech stakeholders like Goodwell Investments, IFC, CDC, and more, to launch globally applicable guidelines for Investing in responsible digital financial inclusion. It collaborates with over 40 FinTech investors and digital finance innovators for launching investor guidelines aimed at spreading the benefits of the FinTech revolution more widely.

Hero Fincorp Raises Over 1000 Crore To Fuel Future Growth

New Delhi, September 15, 2016 HFCL, one of India’s fastest growing Non-Banking Financial Companies (NBFCs), today raised over Rs.1000 Crore from ChrysCapital, Credit Suisse and Hero Group to fuel expansion to support the unprecedented demand for customer-focused credit services over the next 12-18 months. Leading this round of investment, ChrysCapital has invested Rs 570 crore while Hero Group has made an additional investment of Rs 300 crore in HFCL.

12. INFORMATION SOURCE LINKS:

Annual Report: https://www.herofincorp.com/sites/default/files/2018-2019-doc_file.pdf

Balance Sheet:

https://www.herofincorp.com/sites/default/files/Hero%20Housing%20Finance%20Limited%20Balance%20Sheet%20-%20March%2031,%202019.pdf

Report Prepared by:

Unlistedkart LLP 1206 12th floor 'A' Wing , Mittal towers,

MG Road Next to Citi Bank, Bangalore 560001 +91 636 644 8710 | hello@unlistedkart.com

https://unlistedkart.com/ |

Note: For any queries/clarifications on the contents/particulars of this report please reach out to hello@unlistedkart.com. Also refer to the below section, and further section around Risks and disclosures to understand the usage of this report better. Usage of this report: Research report update may have information on overview of the industry, company, certain stocks, recent market trends, news and certain publicly available information. The report can include varying levels of detail, and while there is no industry standard when it comes to format, this report uses the most common elements to all thorough and effective information reports. Throughout the report below there may be some information that could be considered essential, as well as assumed as tips for using our report as effective as possible for any informed decisions making by the users/stakeholders accessing this report.

This report is prepared based on the request of the recipient and is based on the publicly available information and in consultation with subject matter experts. While due care has been taken in collecting information and preparing the report, Unlistedkart does not guarantee the accuracy, completeness, reliability, timeliness, non-infringement, title, merchantability, or fitness for any particular purpose of the content. Unlistedkart is not liable for any damage(s) or loss(es) of any kind, because of reliance on or reference to the contents of this report. In no event the liability of Unlistedkart LLP, its directors, analysts, consultants, or employees or any of their data providers for any damages (direct, indirect, special or consequential) for whatever cause shall exceed the amount charged by unlistedkart for making this report available. Copyright: Copyright © Unlistedkart LLP. This report is prepared, owned, and distributed by Unlistedkart. The report is meant for the sole and exclusive use of the recipient to whom it is addressed by Unlistedkart. This report either in full or in part, cannot be redistributed and/or reproduced in any form either electronic or physical, without written consent of the owner. Disclaimer and Disclosures: No Unlistedkart employees are officers, employees, or directors of this company. Unlistedkart LLP. does not own more than 1% of the shares of this company. Analysts covering this company do not own its stock. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security.