Home First Finance Company IPO opens on January 21, 2021, and closes on January 25, 2021, with a total IPO size of Rs 1153.7 crores. The IPO includes a fresh issue of Rs 265 crores and an offer for sale of Rs 888.7 crores.
Incorporated in 2010, Home First Finance is one of the fastest-growing housing finance company with a pan India presence. It provides home loans to first-time homebuyers in low and middle-income groups and extends loans to salaried and self-employed individuals and customers with income levels less than Rs 50,000 per month. Home first is one of the fastest-growing housing finance companies. The company’s loan book has grown over ten times in the period from 2015 to 2020.
As of March 31, 2020, it has served 43, 094 active loans in 70 branches across 11 states and one union territory with a key presence in Gujarat, Maharashtra, Tamil Nadu, and Karnataka.
The company was founded by Mr. Jaitirth Rao (Jerry Rao), the founder of IT company Mphasis and its former CEO, and Mr. PS Jayakumar, the former MD, and CEO of Bank of Baroda and Citibank Consumer Business Head.
Company’s Promoters
True North Fund V LLP and Aether (Mauritius) Limited. Further, Bessemer has invested in the Company since January 2011 and Orange Clove Investments B.V. (an affiliate of Warburg Pincus, a global private equity investor) has recently increased its stake from 25% to 30.6%.
Qualitative Factors
- A technology-driven company with a scalable operating model.
- Customer-centric organizational commitment.
- Deep penetration in the housing finance markets with diversified sourcing channels.
- Centralized, data science backed underwriting process.
- Technology-driven collections system.
- Well-diversified and cost-effective financing profile.
- Experienced management team with well qualified operational personnel and marquee investors.
Objects of the Offer
- To utilize net proceeds towards augmenting capital base for future capital requirements.
- To enjoy the benefits of listing of the Equity Shares on the Stock Exchanges.
Financials of Home First Finance Company
| Particulars (in ₹ crores) | H2 FY21 | FY20 | FY19 | FY18 |
| Total Assets | 3722 | 3480 | 2482 | 1365 |
| Total Revenue | 243 | 420 | 271 | 134 |
| PAT | 53 | 79 | 45 | 16 |
The AUM of the company has grown from Rs 847 crores in 2017 to Rs 3618 crores in March 2020 and the Company’s revenue grew at a CAGR of 66%.
Valuation
The company’s P/E ratio comes out to be around 48.10, which is higher than the industry P/E, which is 22.1. The Return on Equity (ROE) is 10.9%, and the Net Profit Margin (NPM) is 21.77%. The Cost to Income ratio has decreased from 68.4% in 2017 to 45.8% in 2020. The ROA has improved from 1.4% in 2018 to 2.7% in 2020. ROE also improved from 5.1% in 2018 to 10.9% in 2020. The ROE numbers are lowered mainly due to the low leverage. The GNPA is 0.87% and the NNPA is 0.67% which is still under 1%.
Home First Finance Company IPO Details
| Issue Open | Jan 21, 2021 – Jan 25, 2021 |
| Issue Type | Book Built Issue IPO |
| Issue Size | [.] equity shares of ₹ 2 (aggregating up to ₹ 1,153.7 Cr) |
| Fresh Issue | [.] equity shares of ₹ 2 (aggregating up to ₹ 265 Cr) |
| Offer for Sale | [.] equity shares of ₹ 2 (aggregating up to ₹ 888.7 Cr) |
| Face Value | ₹ 2 per equity share |
| Issue Price | ₹ 517 to ₹ 518 per equity share |
| Market Lot | 28 shares |
| Min Order Quantity | 28 shares |
| Listing At | BSE, NSE |
| Allotment Date | Jan 29, 2021 |
| Listing Date | Feb 3, 2021 |
Home First Finance IPO Lot Size and Price (Retail)
| Application | Lots | Shares | Amount (Cut-off) |
| Minimum | 1 | 28 | ₹14,504 |
| Maximum | 13 | 364 | ₹188,552 |
Home First Finance Bid Details
| Sl No. | Category | Subscription Status (No. of times) | ||
| 21 Jan 21 | 22 Jan 21 | 25 Jan 21 | ||
| 1. | QIB | 1.28x | 1.35x | 52.5x |
| 2. | NII | 0.13x | 0.61x | 39x |
| 3. | RII | 1.29x | 3.4x | 6.58x |
| Total | 1.04x | 2.2x | 27x | |
| Book Running Lead Managers to the Offer |
| 1. Axis Capital Limited |
| 2. Credit Suisse Securities (India) Private Limited |
| 3. ICICI Securities Limited |
| 4. Kotak Mahindra Capital Company Limited |
| Registrar to the Offer |
| KFin Technologies Private Limited |
| Selenium Tower-B Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad – 500 032 Telangana, India Tel: +91 40 6716 2222 E-mail: hffcl.ipo@kfintech.com Investor grievance E-mail: einward.ris@kfintech.com Website: www.kfintech.com Contact Person: M Murali Krishna SEBI Registration No.: INR000000221 |
| Registered and Corporate Office: 511, Acme Plaza, Andheri Kurla Road, Andheri East, Mumbai, Maharashtra 400 059, India; Telephone: +91 22 6694 0386 |
Source: Home First Finance Company India Limited RHP
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