In this article, FinTuts will share its views or insights about the Home First Finance Company IPO, so that you can take a self-decision on your investment or wealth creation journey and can be financially literate and atmanirbhar.
Incorporated in 2010, Mumbai-based, Home First Finance Company is an affordable housing finance company that mainly caters to the low and middle-income groups by offering them housing loans to construct and buy homes.
The company also provides other loan options such as loans against property, developer finance loans, and loans to buy commercial property. It has a diverse lead generation source channel including connectors, contractors, architects, affordable housing developers, and others.
The company operates a network of 65 branches covering over 60 districts in 11 states and a union territory in India. Also, the company has a significant presence in the urbanized regions of Gujarat, Maharashtra, Karnataka, and Tamil Nadu and has sanctioned over 50,000 home loans.
The company has received SEBI’s approval for an initial public offering in March last year, but the coronavirus pandemic led to the delay in its plans. Private equity fund Warburg Pincus(WP) holds a 30.62% stake in the company.
As of 30/09/2019, Home First Finance currently has an A+(stable) rating from ICRA Limited.
Axis Capital, Credit Suisse Securities (India) Pvt Ltd, ICICI Securities, and Kotak Mahindra Capital Company are the book running lead managers to the issue.
Objectives of Home First Finance Company IPO:
- To augment the company’s capital base to meet the future capital requirement
- To achieve share listing benefits on the exchange
Statistics of Home First Finance Company IPO
Let’s look at the strengths of Home First Finance Company:-
- Technology-driven affordable housing company
- Strong penetration in the largest housing finance market
- Diversified lead source channel
- The experienced and well-qualified managerial team
- Government initiatives like the Pradhan Mantri Awas Yojana(PMAY)
Let’s look at the weaknesses of Home First Finance Company:-
- Disruption in the sources of funding
- Default by borrowers and delay in repayment of loans
- Company borrowing costs may depend on the credit rating agency’s ratings
- May face asset-liability mismatches
Highlights of Home First Finance Company IPO
- Issue Size: Around ₹1,153.72 Cr
- Face Value: ₹2 per equity share
- IPO Price: ₹517 to ₹518 per equity share
- Market Lot: 28 Shares(1 Lot)
- Min/Max Order Quantity: 28 Shares(1 Lot) – 364 Shares(13 Lot)
- Minimum/Maximum Amount: ₹14,504 – ₹1,88,552
- Listing At: BSE, NSE
- Retail/HNI/QIB Allocation: 35%/15%/50%
- Promotor Holdings: 52.85% (Pre-Issue)
- Promotor Holdings: 33.70% (Post-Issue)
- Issue Size: 2,94,11,764 shares ( ₹1,153 cr)
- Fresh Issue: – shares (₹265 cr)
- Offer for Sale: – shares (₹888.72 cr)
- IPO Opening Date: Jan 21, 2021
- IPO Closing Date: Jan 25, 2021
- Basis of Allotment Date: Jan 29, 2021
- Initiation of Refunds: Feb 01, 2021
- Credit to Demat Account: Feb 02, 2021
- IPO Listing Date: Feb 03, 2021
GMP of Home First Finance Company IPO
Grey Market Premium(GMP) is the price at which a listed company’s equity shares are traded in the grey market. Grey Markets are basically unauthorized or unregulated equity share distribution channels other than the regulated stock market.
Investors might mistake grey markets as illegal. But it help investors predict the performance of an IPO legitimately and sometimes it boost the listing price.
Tentatively, the Grey Market Premium of Home First Finance Company IPO is around Rs.90-100. The Subject to Sauda and Kostak price of Home First Finance Company IPO seems to be around Rs. 2,500 and Rs 500-600 respectively.
The Bottom Line | Verdict
According to CRISIL Research, the affordable housing outstanding credit will increase at approximately 9%-10% CAGR by FY23. From 2015 to 2019, this market grew by approximately 20%.
Looking at the financial performance of Home First Finance Company over the last three years, the total income of the company showed tremendous growth at a CAGR of 63.4%. The improvements in margin and attractive valuation with healthy return ratios are making HomeFirst a good choice.
Investors may take a position in the IPO and if allotted should book gains at the time of listing and may later add the stock at dips in lots as the stock can be seen under pressure due to increasing NPAs.
We hope that this article might have surely helped you to understand in general about the Home First Finance Company IPO.
If you liked reading about this article, please do visit our other articles regarding Mutual Fund or Passive Income related reviews.
Besides, should you have any concerns, please feel free to comment below or do reach out to us. FinTuts will be happy to help. #HappyInvesting.