Home First Finance Company India Share price and Fundamental Analysis

Company History

Home First Finance Company India Limited was incorporated as a private limited company with the name Home First Finance Company India Private Limited' at Bengaluru, Karnataka on February 3, 2010. Subsequently, the Company was converted into a public limited company and consequently the name of the Company was changed to Home First Finance Company India Limited' on March 14, 2018.

The Company is a technology driven affordable housing finance company registered with Reserve Bank of India (RBI) and the National Housing Bank (NHB) that targets first time home buyers in low and middle-income groups. It primarily offers customers housing loans for the purchase or construction of homes. The Company is primarily engaged in the business of lending of housing loans, loans for the purpose of purchasing a commercial property, loan against property and construction finance.

The Company serves salaried and self-employed customers. Salaried customers account for 73.1% of its Gross Loan Assets and selfemployed customers account for 25.0% of Gross Loan Assets, as of September 30, 2020. The Company serviced 44,796 active loan accounts, as of September 30, 2020. The Company also offers other types of loans comprising loans against property, developer finance loans and loans for purchase of commercial property, which comprised 5.1%, 1.9% and 0.9% of its Gross Loan Assets, as of September 30, 2020, respectively. As of the same date, 32.8% of its Gross Loan Assets were from customers who were new to credit. The average ticket size of its housing loans was Rs. 1.01 million, with an average loan-to-value on Gross Loan Assets of 48.8%, as of September 30, 2020. As of September 30, 2020 and March 31, 2020, its Stage 3 Loan Assets expressed as a percentage of its Gross Loan Assets were 0.74% and 0.87%, respectively.

As of September 30, 2020, the company had a network of 70 branches covering over 60 districts in 11 states and a union territory in India, with a significant presence in urbanized regions in the states of Gujarat, Maharashtra, Karnataka and Tamil Nadu. It has increased the scale of operations and grown its branches by adopting a strategy of contiguous expansion across regions and has strategically expanded to geographies where there is substantial demand for housing finance. According to the CRISIL Report, the 11 states and union territory in which the company is present accounted for approximately 79% of the affordable housing finance market in India during the financial year 2019. The Company utilizes a diverse range of lead sourcing channels such as connectors, architects, contractors, affordable housing developers, in addition to conducting loan camps and micro marketing activities, and utilizing employee and customer referrals and branch walk-in customers.

The Company has leveraged technology in various facets of its business such as processing loan applications, managing customer experience and risk management. It has developed a paperless process to onboard customers efficiently and its well-trained front-end teams appraise customers by conducting home and workplace visits and ensure minimal disruption to a customer's daily routine. The Company offers mobility solutions through dedicated mobile applications for its customers to enable quick and transparent loan related transactions. It has an integrated customer relationship management and loan management system set up on a leading cloud based customer relationship platform providing it with a holistic view of all its customers. The Company utilizes proprietary machine learning customer scoring models to assist it with the centralized credit underwriting process, which has led to consistent and accurate credit evaluation with quick turn around times.

The Company was founded by Jaithirth Rao, P. S. Jayakumar and Manoj Viswanathan and commenced its operations in August 2010. The company is managed by professionals and its Promoters are True North Fund V LLP and Aether (Mauritius) Limited. Further, Bessemer and Orange Clove Investments B.V. (an affiliate of Warburg Pincus, a global private equity investor), has acquired a stake in the Company.

During year 2020-21, the Company expanded the distribution network to 72 branches as at March'21. During the year 2020-21, the Company issued Secured, Rated, Listed, Redeemable, Taxable Non Convertible Debentures on a Private Placement basis aggregating to Rs 240 Crores which are listed on the Wholesale Debt Segment on BSE Limited. In the Equity Segment, the Company raised Rs 75 Crores as primary capital by issue and allotment of Equity Shares to Orange Clove Investments B.V. - an affiliate of the Warburg Pincus Group.

During the year 2020-21, the Company made an Initial Public Offer (IPO) of 2,22,72,556 Equity Shares of a face value of Rs 2 each for cash at a price of Rs 518 per Equity Share (including a share premium of Rs 516 per Equity Share). The offer comprised a fresh issue of 51,15,830 Equity Shares by the Company and Offer for Sale of 1,71,56,726 Equity Shares by True North Fund V LLP, Aether (Mauritius) Limited (Promoters) and Bessemer India Capital Holdings II Ltd, Mr. P. S. Jayakumar and Mr. Manoj Viswanathan (Investor and Individual Selling Shareholders). The Equity Shares of Company were listed on the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on February 3, 2021.

During year 2021-22, the Company expanded the distribution network to 80 branches as at March'22 from 72 branches as at March' 21.

During the year 2021-22, the Company raised (i) Rs 911 Crores borrowings from bank / financial institutions (outstanding as on March'22: Rs 2,103.70 crores), (ii) Rs 605.09 crores raised by way of Direct Assignment (iii) Rs 400 crores through re-finance from NHB (outstanding as of March'22: Rs 1,194.28 crores) and (iv) Rs 99 crores by way of NCDs (outstanding as of March'22: Rs 168.78 crores).

During year 2022-23, the Company expanded the distribution network to 111 branches as at March'23 from 80 branches as at March' 22.

During the year 2022-23, the Company has raised (i) Rs 1860 Crores borrowings from banks / finance companies (outstanding as of March'23: Rs 3,553.53 Crores), (ii) Rs 877.54 Crores raised by way of Direct Assignment & Co-lending (iii) Rs 600 Crores through re-finance from NHB (outstanding as of March'23: Rs 912.99 Crores) and (iv) Rs 280 Crores by way of NCDs (outstanding as of March'22: Rs 346.95 Crores).