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Welcome back to our conversation series with Hero FinCorp's Jt. MD & CEO - Abhimanyu Munjal, to view the previous interview, please click here.

Interviewer: Hero FinCorp has been in existence since 1991, however, the company has witnessed renewed push over the past 3-4 years. What was the reason behind this change in approach

Abhimanyu Munjal: Hero FinCorp was incorporated in 1991, but stayed in dormancy till about 2012. Technically, that makes us a 25-year- old start up! With the advent of technology the digital revolution, and India being in a phase of strong economic growth, it made sense to strengthen our presence in the financial services sector. While I agree that there was a certain degree of risk in the business, but the potential rewards were tremendous, and this would be an ideal way to diversify an otherwise manufacturing centred business group.

Interviewer: With so many new FinTech start-ups coming up, do you think it would cannibalize business .

Abhimanyu Munjal: We feel that this start up ecosystem of financial technology or FinTech is here to stay and disrupt the FS market. We are also sure of the convergence that will occur between the start-ups and the traditional lenders. They will live symbiotically and will grow the pie rather than cannibalize, just as we had done in our business.

Fundamentally, the ideas need to be unique and tailored to India. India is a very diverse country and what works in the southern part of the country may not work in the northern or eastern part. As a result, we cannot blindly copy models prevalent in the west and transplant them here. It is ok to be inspired but the ideas should be customized for India. As pioneers of this ecosystem, you should also be careful. There are enough and more non-profitable business models out there and many which our not defensible, so please, find your niche, a good niche, and go after it as if you own it.

Interviewer: The competitive environment keeps start-ups on their toes, as there is little margin for error, and at the same time scaling-up is a challenge. How did you cope?

Abhimanyu Munjal: We are a manufacturing focused group, financial services on the other hand is a totally different business with very different characteristics. Therefore, we used a bottom up approach to understand this business and ensure that we understood the pain points of our customers. We realised early on that customers in India are highly value conscious and that's what we strive to provide. Our products are flexible, hassle-free and come with competitive pricing. This worked well for our Two Wheeler business. On the other hand, we focussed on increasing the market size by targeting SME businesses which were underserved by India's traditional financiers. Today, we have a LAP and SME based asset book of over INR 3,000 crores.

We expanded our presence and are available at about 3,000 touch points across 1,008 cities, towns and villages, with a team strength of 4,000 individuals and an overall asset book of INR 10,000 Crores. We have grown our book by over 33 times in the past four years.

Interviewer: What are the key parameters for FinTech start-ups to measure success?

Abhimanyu Munjal: Real businesses generate real profit and not just valuations. Please do not get carried away by valuation bubbles and customer acquisition numbers as in the long run you need to generate cash flows to remain viable. It is imperative that while achieving the numbers you create the building blocks of the company, so that in a high growth scenario, the enterprise does not get compromised by surprises.Every time we enter a line of business, my mandate to the team is the product should be profitable on a unit level, at scale, with all overheads accounted for, because it is only then that I know the business makes sense.

Interviewer: To get started on the right foot what would you advice other start-ups in India?

Abhimanyu Munjal: I believe it is important to have mentors. I had very large shoes to fill given the success enjoyed by my grandfather, my father and my uncles. In fact, it was my uncle, Mr. Pawan Munjal, who drove me to focus on this business. In 2012, I was involved in 3 or 4 initiatives for the group but he pushed me to give them up and focus on this and only this. That was a very good advice and now Hero FinCorp is where I devote most of my time. My grandfather used to say "Hauley chal", which in Punjabi means, go slow, go step by step. And this has also been critical in moulding me. I have always worked with a sense of urgency, but advice like this grounds you and offers a different perspective. So please find a mentor if you don't already have one.

Interviewer: What are the key learnings from your Start Up journey?

Abhimanyu Munjal: Our first learning was to reach our customers with a differentiated product. Through the site-visits and research that we conducted, we came up with a differentiated, tech enabled process. Second, we learnt that in order to get our team mates to understand and internalize this differentiated process we needed to embrace a philosophy of "unlearn and then learn". When disruptions are happening so fast, one has to be nimble footed and open to change. When you go out and hire, across all levels you will learn that people will say "sir, yeh dhanda to aisey hi hota hai!" (There is no other way to do this business). My experience suggests, that one should go with their gut.

Third, learn quickly. Initially, we made errors by not thinking through things like the disbursement and collections process! We realized we were too new in this business, but we learnt quickly. Please do the same. Do not be scared to pivot and adjust your model. You will realize that in order to scale up, much of the initial vision will change. This is a fact of life and we are still facing these questions even at our scale.

Lastly, we never took our eyes off the profitability of our business. We were lucky to inherit a profitable enterprise but taking it to the next level required a very careful balance between investment and cost control.

Interviewer: Thank you for taking the time to talk to us, we look forward to interacting with you in the future as well.

Did You Know


The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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