Hero FinCorp Ltd, the retail lending arm of Hero MotoCorp Ltd, said on Thursday that it had raised Rs1,000 crore, as it seeks to expand its loan book more than four-fold by 2020.

The non-banking financial company (NBFC) raised Rs570 crore from (PE) firm ChrysCapital Advisors Llp; Rs132 crore from Credit Suisse Group AG; and Rs300 crore from Hero Group.

Hero FinCorp, in which Hero MotoCorp has a 40.3% stake with the rest owned by its promoters, is targeting expanding its loan book to Rs35,000 crore by 2020 from Rs8,000 crore now.

“The fresh investments that we have received are going to significantly contribute towards our expansion plans,” said Abhimanyu Munjal, joint managing director and chief executive officer, Hero FinCorp.

Mint reported last month that Singapore investment firm Temasek Holdings Pte. Ltd and ChrysCapital were in final stages of talks with Hero FinCorp. to acquire a minority stake.

Hero Group chairman Pawan Munjal said on Thursday that the financial services market in India had grown vastly in recent years, but still remains largely “under-penetrated”.

“With Hero FinCorp, we aim to capitalize on this opportunity by providing credit power to financially excluded customers across the hinterland,” Munjal said.

He added that the group could explore opportunities in the banking space as they emerge but added that the focus would remain on Hero FinCorp.

Hero FinCorp is led by Abhimanyu Munjal, the younger son of late Raman Munjal, elder brother of Pawan Munjal. Abhimanyu’s elder brother Rahul Munjal runs Hero Renewable Energies Pvt. Ltd. These businesses are seen as the New Delhi-based group’s attempts to diversify into other fast-growing businesses to accommodate third-generation family members into the business.

Hero FinCorp may need to raise more money since the amount raised on Thursday may not last more than 18 months. The NBFC plans to enter new product segments such as home loans and used two-wheeler loans and aims to augment existing businesses, with a special focus on used car finance, consumer durable/loyalty loans and loans to small- and medium-sized businesses. It will also look to partner with fin-tech startups.

“It’s a positive step for the Hero group. Hero FinCorp raising Rs1,000 crore increases its capital adequacy ratio, and will help the company penetrate into the rural market even further. While the rural sector’s access to capital for two-wheeler loans is fairly healthy, Hero FinCorp’s latest push will provide another avenue of access to the informal banking system,” said Mahantesh Sabarad, deputy chief of equity research, SBICap Securities Ltd.

Hero FinCorp has grown from an asset size of Rs300 crore in 2013. It has financed more than 1 million customers, including some 2,000 small- and medium-sized businesses, with no or limited credit histories. It plans to finance around 8% of the 10 million two-wheelers its parent firm plans to sell in the local market over the next four years.

At least 35% of the two-wheelers sold in India are financed by lenders. According to an industry estimate, the size of India’s two-wheeler financing market is around Rs30,000 crore per year, with HDFC Bank Ltd and Bajaj Finserv Ltd among the leading financing institutions.

Following the financial crisis of 2008, many large private banks shrank their retail lending portfolios, including their auto and personal loan books. But in the past year, many of these lenders are again focusing on the retail loan market as demand for corporate credit stagnated.

ChrysCapital has made 15 investments in India’s financial services sector to the tune of $600 million in the past 17 years.

“ChrysCapital believes Hero FinCorp has all the ingredients to scale multifold and create significant shareholder value in the future,” said Sanjay Kukreja, partner, ChrysCapital.