HLF is one of the most prominent vehicle finance NBFC’s in India with a focus on urban and semi-urban markets. The company delivers retail finance through a wide range of vehicle financing products.
Hinduja Leyland Finance Ltd (HLFL), the captive financing support of economic automobile maker Ashok Leyland, is in talks with potential investors to raise to $100.HLFL has appointed EY as sell-side advisors for the transaction, which can see it divesting between 15% and 20% stake to an incoming investor, stated the folks cited above.
The transaction is at the moment at an early stage and discussions are underway with several potential buyers together with giant non-public fairness funds
The corporate extends loans for industrial automobiles, in addition to three-wheelers, two-wheelers, tractors and building gear. It has additionally been shopping for mortgage portfolios over the previous two years to diversify its product profile, thereby augmenting internet curiosity margins.
As of December 2019, company filings present that Hinduja group entities held 93.08% in HLFL with Ashok Leyland the first shareholder with a 61.83% stake. Ashok Leyland raised its stake to 67.2% as on 25 March 2020 with plans to enhance it additional to around 70 percent in the close to future to maintain majority shareholding.
HLFL plans to come out with an initial public offering (IPO) in the near to medium term. The Hinduja group is expected to continue to hold the majority stake even after the IPO. Present shareholders have additionally infused capital at common intervals in HLFL. From June 2017 onwards, they’ve infused recent capital of round ₹650 crore.
The NBFC has over the past few years also explored IPO opportunities but is yet to finalize plans in this regard. Significantly, the latest fundraise comes at a time when the commercial vehicle business of most manufacturers continues to be under severe stress because of the coronavirus outbreak, which has heavily impacted demand.
India’s non-bank lenders, who are currently staring at ₹1.51 trillion debt repayments due in the next six months, are rushing to raise fresh equity and pursuing mergers with bigger peers to avert defaults. This has been reported on August 4, 2020. This is because the pandemic has unlit the outlook for the sector that has struggled since the downfall of Infrastructure Leasing and Financial Services Ltd nearly two years ago.
The Reserve Bank of India’s targeted long-term repo operations have eased the liquidity situation for some NBFCs, especially the better-rated ones, but those with lower asset quality may find it tough to survive without rescue.
