MUMBAI: Singapore’s Temasek Holding and ChrysCapital are among the three suitors who have submitted term sheets to buy around 15 per cent stake in Hero FinCorp, the vehicle-financing unit of the country’s leading two-wheeler maker Hero MotoCorp, for around $90 million (Rs 600 crore).
Baring Private Equity Partners Asia is the third bidder even as the company management evaluates the terms and restrictive rights sought by the bidders, sources directly familiar with the matter said.
Hero FinCorp, with a book value of Rs 6500 crore, is the latest in a series of high-profile NBFC deals involving private equity investors despite their sedate performance in the recent past. But global investors are clearly betting on credit off-take improving in Asia’s third-largest economy . Hero was seeking around $750-800 million (around Rs 5,000 crore) valuation for the finance unit, but the deal-making is expected to happen at a slightly lower valuation.
Creador Capital, founded by private equity veteran Brahmal Vasudevan, could also file a term sheet in the next few days, sources cited earlier added.”We are evaluating different sources of funding, but unable to discuss specific details,” a company spokesperson said.
ChrysCapital, one of the country’s most successful private equity managers, and Temasek are seen as strong contenders for the deal. ChrysCapital has had partnerships with Shriram Transport Finance, Mahindra Finance, and Bajaj Auto Finance in the past, providing a strong investment record in the domestic vehicle financing market.
The Hero unit provides 2wheeler and user car loans besides lending to high-growth, emerging companies, and loans against property .