Home First Finance Corporation was founded in 2010 based in Mumbai. The company is an affordable housing finance company. The company offers home loans to lower and middle class to buy homes. They also offer loans against property, developer finance to buy commercial properties as well.
The company has a diverse lead generation source channel including connectors, contractors, architects, affordable housing developers, and others. As on Sep 30, 2019, the business has a strong branch network of 65 branches across 60 districts in 11 different states and a union territory in India with a key presence in markets such as Maharashtra, Karnataka, Tamil Nadu, and Gujarat.
It offers quick and transparent loan transactions through its mobile app. As on Sep 30, 2019, it has serviced a total of 37,086 active loans. Its Gross Loan Assets have grown at a CAGR of 69.8% between FY2017 and FY2019 and increased from INR8,473.16 million as of 31 March 2017 to INR31,133.76 million as of 30 September 2019.
Strengths of the Company:
1) Technology-driven affordable housing company.
2) Strong penetration in the largest housing finance market.
3) Diversified lead source channel.
4) Sound fundamentals.
IPO Objective:
1) To augment a company’s capital base to meet future capital requirements.
2) Listing benefits.
IPO Details:
| Home First Finance IPO details | |
| Subscription Dates | 21 – 25 January 2021 |
| Price Band | INR517 – 518 per share |
| Fresh issue | INR265 crore |
| Offer For Sale | INR888.72 crore |
| Total IPO size | INR1,153.72 crore |
| Minimum bid (lot size) | 28 shares |
| Face Value | INR 2 per share |
| Retail Allocation | 35% |
| Listing On | NSE, BSE |
Tentative Timetable
19th Jan – Announcement of Price Band
20th Jan – Anchor Investors Allotment
21st Jan – Offer Opens
25th Jan – Offer Closes
29th Jan – Finalisation of Basis of Allotment
01st Feb – Unblocking of ASBA Accounts
02nd Feb – Credit of Equity Shares to Depository Accounts
03rd Feb – Commencement of Trading
Financial Performance:
| Home First Finance’s financial performance (in INR crore) | ||||
| FY2018 | FY2019 | FY2020 | H1 FY2021 | |
| Revenue | 134.2 | 270.9 | 419.7 | 243.2 |
| Expenses | 110.0 | 205.7 | 312.4 | 172.8 |
| Net income | 16.0 | 45.1 | 79.1 | 52.8 |
| Net margin (%) | 11.9 | 16.6 | 18.8 | 21.7 |
Outlook:
AUM of the company Stands around Rs 3700 cr while the net worth of the company is Rs. 988 cr. For the six months ended September 30, 2020 and the financial year 2020, it sanctioned 2,591 and 15,591 loans on account of leads generated through 887 and 2,553 connectors, respectively. At the upper price band of Rs 518, the issue is priced at a 4.1x P/BV ratio. The RoE and RoA of HFFC is 11% and 2.94% respectively.
Revenue of the company is increasing YoY with a strong strong increase of 150% in total assets. The profit of HFFC increased by 70% CAGR since 2018 with an increase in profit margins. Eying the growth in real estate, NBFC-Housing companies are expected to have a strong boost. We assign a “Subscribe” rating for listing gain and long term.
