The Home First Finance Company IPO went live today. If you haven’t subscribed yet, but have plans to do so, here are the key factors to consider before subscribing.
Who is HFFC?
HFFC is an NBFC that offers specialised housing loans to low-income group categories. It primarily provides home loans in the urbanised areas of various states. Starting in 2010, the company has set-up a technology-backed customer-centric business model to drive business in small-sized home loans. It targets first-time homebuyers and offers loans for buying and constructing homes, as well as for purchasing commercial properties, developers’ loans, and loan against property. It has deep market penetration and an established multi-channel lead generation source involving developers, architectures, contractors, and more. As of September 2020, HFFC has 70 branches in 60 districts of 11 states.
The total market capitalisation value of HFFC stands at Rs 4040.40 crores. The company has managed to maintain a strong growth rate over the years. Between FY2018 and FY2020, HFFC’s gross loan asset grew at a CAGR of 63.4 percent. Around 73.1 percent of its client belongs to the salaried category. However, it also caters to the significant market of self-employed buyers. They constitute 25 percent of HFFC’s client base. As on September, HFFC has serviced 44, 796 active loan accounts and its stage-3 loans expressed in percentage of gross loan asset was 0.74 percent.
The company leveraged technology in housing finance to create a transparent, customer-centric system from onboarding to collection. It has a robust collection management system, and around 93 percent of the group was non-cash based.
In the last three financial years, the company recorded CAGR of 60 percent growth in its revenue earning and around 122 percent CAGR in its profit earning.
Housing finance is one of the largest market segments in India. The total market size of Rs 20 lakh crores occupied by banks, which hold the significant portion with Rs 13 lakh crores market share and NBFC with Rs 7 lakh crore. Between FY2015 and FY 2019, the industry registered a CAGR of 20 percent. The industry is expected to register strong growth to reach to Rs 28.4 lakh cores by 2022.
Details Of The IPO Offer
- HFFC launches an IPO offer comprising 2.22 crore shares for a total value of Rs 1,153 crores
- Home First Finance IPO launch date is January 21. The subscription window will remain open for five days until January 25, 2021. Finalisation of allotment process will conduct on January 29 and listing will happen on February 3, 2021
- The issuer has reserved half of the offer for QIBs and 35 and 15 percent respectively for non-institutional buyers and individual retail investors
- Interested investors will have to apply for a minimum of 28 shares and raise their bid size to 13 lots
- HFFC IPO shares have launched in the price band of Rs 517-518; respectively 258.50 and 259 times higher than the face value
- The company is looking to enhance its capital equity base and meet future capital expenses rising from business expansion
- Ahead of the IPO launch, HFFC had raised around Rs 79 crores through pre-IPO allotment route to Orange Clove and employees
- HFFC shares will list in both Bombay Stock Exchange and National Stock Exchange
Now apply for HFFC IPO from Angel One website or mobile app. Click here.