Home First Finance Company IPO (HFFC) is launched today on Jan, 21, 2021 for subscription, this has been the third IPO launched in 2021 following IRFC IPO & Indigo Paints IPO. There are many other upcoming IPO’s in 2021 which are scheduled to be launched this year. Home First Finance Company IPO GMP (Grey Market Premium) is ₹650 at the moment.
Coming back to HFFC IPO, the Home First Finance Company India Limited is is a technology driven an affordable housing finance company. The company primarily serves to the low and middle income groups by offering them housing loans to construct and buy homes. It further offers other loans like loans against property, developer finance loans, and loans to buy commercial property.
Home First Finance Company India Limited is comprised 92.1% of its Gross Loan Assets, as of September 30, 2020. According to the CRISIL Report, it had the highest share of NHB (National Housing Bank) refinance (26%) among its peers in its borrowing mix as of March 31, 2020.
In this post we will not only know about all the details related to Home First Finance Company IPO, such as Issue size, Issue type, Bid lot, price range, issue date, Cut-off timings but also about the financials step by step.
So, Let us first start by knowing in brief about Home First Finance Company India Limited (HFFC).
About Home First Finance Company India Limited (HFFC):
HFFC was incorporated as ‘Home First Finance Company India Private Limited’ at Bengaluru, Karnataka as a private limited company dated February 3, 2010. Subsequently, it was converted to a public limited company and consequently the name of Company was changed to ‘Home First Finance Company India Limited’ dated March 14, 2018.
HFFC was founded by former Mphasis Chairman Jaithirth Rao and Bank of Baroda’s MD and CEO PS Jayakumar.
The company has established a differentiated technology framework with customized systems and tools, enhancing convenience for its customers as well as increasing operational efficiency. It invested ₹201.19 million in its information technology systems during the six months ended September 30, 2020 and the last three financial years.
HFFC also has deep penetration in the largest housing finance markets, It had a network of 70 branches covering over 60 districts in 11 states and a union territory in India. It has set up a paperless process to onboard customers efficiently. Its customer mobile application, ‘Home First Customer Portal’ had approximately 26,098 active registrations comprising approximately 58.7% of its customer base as of September 30, 2020.
Mortgage penetration in India is lower than other emerging economies owing to lower per capita income and higher proportion of informal employment in the country. However, CRISIL Research believes rising urbanisation, growing disposable income, and favourable demographics will lead to higher mortgage penetration going forward.
Therefore, Home First Finance Company India Limited will definitely going to benefit from it. Let us talk about some of the core financials aspects of HFFC.
Financials Of Home First Finance Company India Limited (HFFC):
The most important thing before applying for an IPO is to know the financial condition of a company, let us know how HFFC as a company stand. Checkout the image below to know:
As you can see in the image above, the total assets of the company (HFFC) has increase FY20 Sep, whereas revenue has decreased during the same period, a prominent reason is the pandemic (Corona). Likewise the PAT has also seen a major drop for the same tenure.
HFFC posted a net interest income of 58.6 percent CAGR between FY18-20 while net profits grew at a CAGR of 122.6 percent during the period. Despite the COVID-19 crisis, the asset quality has remained largely stable, with gross non-performing assets (NPA) and net NPA at 0.7 percent and 0.5 percent, respectively, at the end of September 2020.
Whereas, the company’s Gross Loan Assets have grown at a CAGR of 63.4% between the financial year 2018 and the financial year 2020 and increased from ₹ 1,355.93 crores as of March 31, 2018 to ₹ 3,730.01 crores, as of September 30, 2020.
CARE Ratings has upgraded HFFC’s rating from ‘CARE A-‘ as of 31 March 2017 to ‘CARE A+’ as of 30 September 2020. ICRA Ltd has given it an A+ (stable) rating.
Home First Finance Company India Limited(HFFC) Peers Comparison:
HFFC may be not new in the housing industry, but there are many other good companies belonging to the same industry, therefore it will be quite helpful for you as an investor to know the comparison of HFFC with it’s peers.
As compare to its peers the return on equity (ROE) and Return on Assets (ROA) for HFFC is still low, particularly comparing it with private firm. Having said that, the loan outstanding is quite low in comparison to other peers which is great as the chances of NPA will be less.
An analysis by CRISIL Research indicates that housing loan penetration increases at relatively higher levels of per capita GDP. In other words, India’s lower per capita income acts as a constraint to deeper mortgage penetration.
At the higher end of the price band, the stock would be trading at P/BV of 3.6x fully diluted post issue book value of Rs 143.4 per share.
Housing demand has a direct relationship with affordability of homes and annual income. Though
affordability of homes has improved in the last few years due to real estate prices remaining stagnant and rising incomes, home prices are very high in several parts of the country. Affordability is arrived at dividing home price with average annual income.
Now, Let us move on to the Home First Finance Company IPO and know everything in detail about the same.
Home First Finance Company IPO Details:
Home First is planning to raise about 1200 crores in the IPO. The price band has been fixed at Rs.517-518 per share with a minimum bid of 28 shares. The issue size has been reduced to 1.56 crore shares (or Rs 880 crore) after fund-raising from the anchor book. The company raised Rs 346 crore from anchor investors on January 20.
Home First Finance Company IPO GMP (Grey Market Premium) is currently trading at ₹650 at the moment.
Objective of the issue :-
To augment company’s capital base to meet future capital requirement.
To achieve share listing benefits on the exchange.
Checkout the below image to know about the important dates related to HFFC IPO.
Frequently Asked Question (FAQ):
1.What Is The Symbol For Home First Finance Company India Limited(HFFC)?
Ans: The Symbol for HFFC is HOMEFIRST
2.When Home First Finance Company IPO Coming?
Ans: The Issue Period for Home First Finance Company IPO is 21-Jan-2021 to 25-Jan-2021.
3. Post Modification Period For Home First Finance Company IPO?
Ans: The Post issue Modification Period for IPO is 27-Jan-2021 (10.00 A.M. to 11.00 A.M.)
4. What Is The Cut-off Time Period For UPI Mandate For HFFC IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 27-Jan-2021(upto 12:00 PM).
5. What Is The Issue Type For Home First Finance Company IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Home First Finance Company IPO?
Ans: The Price (Band) Range for Home First Finance Company IPO is Rs.517 to Rs. 518 per equity share.
7. What Is The Lot Size For Home First Finance Company IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Home First Finance Company IPO is of 28 Equity Shares and in multiples thereof 28 Equity Shares.
8. Who Are The Book Running Lead Managers For HFFC IPO?
Ans: The Book Running Lead Managers are, Axis Capital, Credit Suisse Securities, ICICI Securities and Kotak Mahindra Capital for HFFC’s issue. KFIN Technologies Pvt. Ltd. is the registrar.
9. What Is The Face Value For HFFC IPO?
Ans: The Face Value is of Rs. 2 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For HFFC IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Bid Quantity for QIB Investors 1,56,20,948 equity shares in multiple of 28 Equity Shares
The Maximum Bid Quantity for NIB Investors 1,11,57,804 Equity Shares in multiple of 28 Equity Shares
The Address of the Registrar Selenium Tower-B Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad 500 032 Telangana, India.
The Contact person name number and Email id is – M Murali Krishna, +91 40 6716 2222, email@example.com
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
Home First Finance Company IPO Subscription Today:
In Retail Individual Investors(RIIs) category the HFFC Issue was subscribed 0.50 times as per latest data.
The prospectus of the company does look promising, having said that there are always risk associated while investing in equity. Similarly there are certain risk which may effect the company overall, for example:
- · The availability of cost-effective funding sources is extremely important. Any disruption in these might impact business.
- · The continuing impact of the COVID-19 pandemic could have an adverse effect on the business.
- · Volatility in borrowing and lending rate could lead to the net interest income fluctuating.
- · An inability to recover outstanding loans might affect the business negatively.
- · The housing finance industry is highly competitive as it boasts of many big brands and players.
- · Also, the Indian housing finance industry is heavily regulated. Any change in laws and regulations could have an unfavorable impact on HFFC’s business.
Therefore, it is always advisable to go through HFFC Limited – DRHP to know in detail about the company.
Applying for Home First Finance Company IPO is quite simple, you just need to check with your broker as most of the stock broker in India provide you the platform to apply directly through their portal instead of ASBA process or from bank.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.