Incorporated in 2010, Home First Finance Company India Limited is a Housing
Finance Company. It is primarily engaged in the business of lending of
housing loans to first time home buyers in low and middle-income groups.
Outlook & Valuation: Home First has posted strong growth in NII of 58.6%
CAGR between FY18-20 while net profits have grown at a CAGR of 122.6%
during the same period. Despite the Covid-19 crisis the company’s asset
quality has remained largely stable with GNPA and NNPA largely stable at
0.7% and 0.5% respectively at the end of 1HFY2021. The company had a
CAR of 51.7% at the end of 1HFY2021which provides comfort. 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 `143.4 per share. We expect the company to post
strong growth driven by strong demand for affordable housing. Given the
growth prospects, we recommend a SUBSCRIBE rating on the issue.

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