IPO note – Home First Finance Company India Limited

Home First Finance Company India Limited IPO

Home First Finance Company offers loans for purchase or construction of homes. The company targets first time home buyers in the low and middle-income category. Company’s gross loan product has witnessed strong growth and has expanded from Rs 1,356 Crs as of March 2018 to Rs 3,730 Crs as of September 2020. The company serves both salaried and self-employed customers.

The company has 70 branches covering 60 districts in 11 states and one union territory in India. It has a high presence in Gujarat, Maharashtra, Karnataka, and Tamil Nadu that cover close to 80% of India’s affordable housing market.

Distribution of network and loan assets:

State # of branches % of Gross Loan Assets
Gujarat 20 39.0%
Maharashtra 15 21.0%
Tamil Nadu 11 10.5%
Karnataka 4 9.3%
Rajasthan 6 5.1%
Telangana 3 5.0%
Madhya Pradesh 5 4.1%
Uttar Pradesh 1 2.6%
Haryana & NCR 1 1.0%
Andhra Pradesh 3 1.4%
Total 70 100.0%

Key strengths:

  1. Plays in the affordable housing market in India that has significant growth potential
  2. 73% of the gross loan assets is lend to a salaried class
  3. Presence in most urbanized states across India
  4. Stable cost of borrowings across years
  5. Experienced management team

Amount in Rs CrHome First Finance Company India Limited Financials

  • Rapidly growing revenues
  • Significantly robust margins and return ratios
  • Reducing expense to income ratios over the years

Offer and Deployment of Net Proceeds

Particulars Amount (Rs Cr)
Fresh Issue Rs 265 Cr
Offer for Sale Rs 889 Cr
Total issue size Rs 1,154 Cr*

*Offer related expenses concerning the fresh issue are yet to be determined

Deployment of funds

  • Increasing the company’s Tier I capital base to maintain the capital adequacy ratio as per the regulations
  • Meet future capital requirements

IPO Factsheet

Home First Finance Company India Limited - IPO Factsheet


Conclusion thoughts:

  • Home First Finance operates in the affordable housing space in India – a country that has the second-largest population, favorable demographics, increasing per capita GDP and increasing financial penetration driven by improving literacy rate and better availability of resources
  • Significant thrust on affordable housing by the government through various initiatives and schemes is an advantage
  • Mortgage penetration in India is lower compared to many economies; highly skewed state-wise penetration levels provide further opportunities
  • The company compares itself with Aavas Financiers amongst listed peers [Total income of Rs 903 Crs for the year ending March 2020 (Rs 711 Crs for the year ending March 2019) and a market price of Rs 1,903 (face value of Rs 10 per share) as on Jan 19th, 2021 close]. Other peers include Bandhan Bank, Aadhar Housing Finance, Aspire Home Finance and Aptus Value Housing Finance
  • The biggest challenge the company faces is ensuring continued collection efficiency and manage the cost of borrowings, much like any company operating in this space
  • Strong revenue growth and robust margins


The information provided in red herring prospectus filed with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend the reader to validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks and should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.

The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at decodefinance.in@gmail.com. For more articles, please visit the website www.decodefinance.in


The author has used his knowledge, experience, and understanding of the subject to write this article. Any views, opinions, and thoughts mentioned in the article belong solely to the author, and not necessarily to the author’s employer (past or current), organization, committee, or other group or individual.

Under no circumstances the author shall be liable for any views or analysis expressed in this note. Further, the opinions expressed are not binding on any authority or Court. We advise readers to consult their financial advisor for assistance in their specific case.

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