Why this comparison matters (and who this is for)
NBFCs are the backbone of India’s consumer and MSME credit engine. When you evaluate unlisted NBFCs like HDB Financial Services (HDFC Bank group) and Hero FinCorp (Hero Group), the questions that truly determine value are:
- Are they growing AUM without overreaching on risk?
- Are NIMs (Net Interest Margins) holding up as the rate cycle turns?
- What’s happening with GNPA/asset quality?
- And crucially in 2025: where is tech spend going—underwriting, collections, analytics, channel digitisation?
This article compiles latest public data and rating-agency notes, then adds a practical angle: how investors and vendors can access these names in the unlisted market—safely and efficiently—through UnlistedCorner.
Snapshot: where HDB Financial & Hero FinCorp stand (FY24–FY26 to date)
- HDB Financial Services (HDFC group)
- Loan book / AUM: ~₹1.07 lakh crore in FY25 (company & broker notes).
- Q1 FY26 profitability & margin: NII up ~18% YoY; NIM ~7.7% (vs 7.6% in Q4 FY25). PAT down ~2% YoY.
- Asset quality: FY24 reference shows GNPA ~1.9%; Q1 FY26 commentary indicates gross stage-3 ~2.56% (single quarter, not full-year). Treat quarters as snapshots; watch the trend.
- Hero FinCorp (Hero group)
- AUM/loan assets: FY24 AUM ~₹51,821 crore; FY25 disclosures & notes suggest slower growth and stress pockets.
- FY25 stress: Rating & research updates flag NIM moderation and higher credit costs; GNPA rising to ~5.0–5.4% (vs ~4.0–4.35% earlier) amid write-offs and clean-up.
- Sector backdrop: With RBI’s rate-cut cycle underway, NIMs are expected to compress modestly across lenders, especially where deposit/bank funding re-prices faster than loan yields. NBFCs that rely on bank lines may feel some margin pressure where they go head-to-head with banks.
How to read this: AUM growth + steady NIM + controlled GNPA = durable compounding. Any one of these wobbling isn’t fatal, but when all three wobble together, re-price your risk.
The 4 metrics that matter (and what to watch in each)
1) AUM Growth: Scale is good—if it’s disciplined
- HDB Financial: Multi-year compounding with FY25 AUM around ₹1.07 lakh crore, diversified across secured/unsecured retail, and supported by AAA borrowings. Scale + parentage lowers cost of funds, which helps margins.
- Hero FinCorp: FY24 AUM crossed ₹51,821 crore (+24% YoY); FY25 saw pressure with slower growth and balance sheet clean-up, per public updates. Growth should be evaluated alongside asset-quality actions and write-offs.
Investor note: Prefer measured AUM growth with data-driven underwriting and ring-fenced vintage performance over raw expansion.
2) NIM (Net Interest Margin): The profit engine
- HDB Financial: Q1 FY26 NIM ~7.7%; yields ~14% and average cost of funds ~6.4% offer healthy spreads for a retail-focused NBFC.
- Hero FinCorp: NIM moderated through FY24–FY25 as risk weights/funding costs moved up; rating notes repeatedly flag spread compression.
- Macro: Ratings research expects 10 bps NIM compression for banks in FY26; NBFCs may feel pressure in segments where they directly compete. Tech-led sourcing/collections can cushion some impact.
Investor note: Don’t anchor on one quarter. Check the trailing 12 months and the composition of NII (fee vs interest) to avoid false comfort from one-offs.
3) GNPA / Asset Quality: Clean growth or postponed pain?
- HDB Financial: FY24 reference near 1.9% GNPA; Q1 FY26 gross stage-3 ~2.56%. Focus on provisioning coverage and flow rates from stage-2 to stage-3 rather than headline GNPAs alone.
- Hero FinCorp: GNPA moved up to ~5–5.4% in FY25, with higher write-offs; agencies highlight subdued profitability and the need to tighten risk buckets.
Investor note: Asset quality is cyclical. What matters is the playbook: early warning systems, bucket roll-back, and PCR (provision coverage). Read rating notes and annual reports for specifics, not just the ratio.
4) Tech Spend & Digital Execution: Where the edge lives now
- HDB Financial: Company materials emphasise embedded technology in origination and hybrid credit models; AAA rating and diversified borrowings aid margin stability, but the operational edge is in analytics-driven underwriting and collections.
- Hero FinCorp: Public materials acknowledge digitisation initiatives; however, profitability and asset quality in FY25 suggest further tech + risk model hardening is likely a management focus (as also hinted by rating notes).
Investor note: Few NBFCs disclose a clean “tech spend” line. Track signals: digital originations share, cost-to-income ratio, early-delinquency cures, and resolution times.
Quick-compare table (latest public cues)
|
Metric |
HDB Financial |
Hero FinCorp |
Context / Source |
|
AUM / Gross loans |
~₹1.07 lakh cr (FY25) |
~₹51,821 cr (FY24); slower in FY25 |
Company/Broker notes; ARs. |
|
NIM (recent) |
~7.7% (Q1 FY26) |
Moderated in FY24–FY25 |
HDB Q1 FY26 pres/news; ICRA/CARE notes. |
|
GNPA / Stage-3 |
FY24: ~1.9%; Q1 FY26: ~2.56% |
~5.0–5.4% (FY25) |
Bank IAR (HDBFS note), Q1 news; Planify/ICRA/IPOCentral. |
|
Tech/Analytics |
Hybrid credit models; embedded tech in origination & collections |
Digitisation ongoing; rating notes call out margins/asset-quality challenges |
Company/broker notes; rating rationales. |
|
Direction of travel |
Scale + margins resilient, monitor credit costs |
Rebuild profitability, tighten risk, invest in tech |
Synthesis of public data; sector NIM caution. |
Method note: Tech spend is poorly disclosed line-by-line. We use disclosed signals (digital share, cost metrics, credit outcomes) and management commentary as proxies.
What this means for unlisted investors today
- Select for resilience, not just growth. HDB’s margin profile and loan book diversity stand out; Hero FinCorp offers turnaround optionality if FY26 sees clean execution on asset quality and spreads.
- Expect NIM compression pockets as rates drift—NBFCs with AAA borrowings and diversified liabilities are better placed.
- AUM ≠ earnings unless collections and provisioning are under control. Rising write-offs can mask underlying growth.
How to access these names safely (and sell them later)
At UnlistedCorner, we specialise in buying/selling unlisted shares, delisted stocks, pre-IPO & private placements, with a KYC-first workflow and a vendor system (Channel Partner) for dealers. You can:
- Browse live cards (e.g., HDB Financial, Tata Capital, NSE, etc.), see reference prices and lot sizes, then raise an inquiry.
- Complete KYC, receive verified quotes, and close via documented DP-to-DP off-market transfers and contract notes—no informal detours.
- If you’re a vendor/dealer, register to list inventory, manage quotes, and capture qualified deal-flow through our marketplace.
We’ve been a trusted facilitator for 15+ years, and our blog explains risks, pricing discipline, and exit planning across names like Tata Capital, NSE and more.
Due-diligence playbook for NBFCs (steal this)
- Underwriting: Segment mixes (secured/unsecured), ticket sizes, geography, vintage curves.
- Funding: Ratings, average CoF, maturity ladder, and bank line diversity.
- Margins: NIM bridges (yield minus CoF), fee income stability.
- Asset quality: Stage-2 migration trends, GNPA/NNPA, PCR, and write-off discipline.
- Ops & tech: Digital originations, collections stack, fraud analytics, call-center productivity, and cost-to-income ratio trajectory.
- Governance: Board oversight, related-party exposure, and audit commentary.
Where to find it (fast): annual reports, Q1 FY26 presentations (for HDB), rating rationales (ICRA/CARE), and our UnlistedCorner blog primers that benchmark peers.
Pricing & risk: practical rules for unlisted NBFC shares
- Work with ranges, not targets. OTC quotes vary by lot and inventory. Sanity-check versus listed peers on P/B and ROE, then haircut for liquidity.
- Size positions for multi-quarter holding. NBFC cycles don’t resolve in weeks.
- Build your exit plan early (watch IPO windows, policy changes, and rating actions).
- Document everything—deal sheet, ISIN, DP IDs, bank details, and transfer proofs.
- Avoid informal channels. Keep your audit trail clean; use recognised facilitators and follow KYC/AML norms—our platform is designed for this.
Buy-side & Vendor callouts (UnlistedCorner workflow)
For Investors (Buy-side)
- Create account → KYC.
- Browse HDB Financial / Hero FinCorp cards → submit inquiry with lot size.
- Receive verified quotes & timelines → agree the deal sheet.
- Execute DP transfer per instructions → contract confirmation shared.
For Vendors/Dealers
- Register as Channel Partner → verification.
- List inventory, update quotes, respond to investor leads.
- Close deals with documented settlement flows; track commissions in dashboard.
FAQs
Q1) Which metric should I prioritise for NBFCs—AUM growth, NIM, or GNPA?
All three matter together. AUM gives scale, NIM funds opex/credit cost, GNPA/NNPA reveals quality. A high AUM with falling NIM and rising GNPA often leads to P/B de-rating later. Use rating notes and quarterly decks to triangulate.
Q2) Is HDB Financial “better” than Hero FinCorp right now?
HDB shows stronger margins/NIM and large-scale AUM with stable asset quality trendlines; Hero FinCorp is addressing elevated GNPAs and margin compression. That said, turnarounds can create upside—if FY26 shows decisive improvement.
Q3) Where do I see tech spend numbers for NBFCs?
Few NBFCs disclose a neat “tech spend” line. Track digital share of originations, cost-to-income, collections KPIs, fraud hits, and early-bucket cures. Company and rating documents call out analytics, hybrid credit models, and collection stacks as levers.
Q4) Are NIMs going to fall in FY26?
Base case: industry-wide mild compression as the rate cycle eases; funding re-prices while loan yields adjust with a lag. NBFCs with AAA funding and diversified liabilities can cushion this better.
Q5) Can I buy HDB Financial or Hero FinCorp on UnlistedCorner?
Yes—create an account, complete KYC, browse the cards, and submit a buy/sell inquiry. Vendors can list inventory and receive qualified leads through our system.
Final word
HDB Financial and Hero FinCorp illustrate two different NBFC stories in 2025: scale with margin resilience vs rebuild and re-risk-price. For unlisted investors, the edge is not just in spotting AUM growth—but in scoring NIM durability, asset-quality discipline, and credible tech execution.
If you want exposure (or you’re a dealer with inventory), UnlistedCorner gives you the inquiry → verified quote → documented DP transfer loop plus a Channel Partner system for vendors—so discovery, pricing, and closure stay structured and compliant.