The initial public offer of Home First Finance Company India was fully subscribed today, which was the first day of bidding. The Rs 1,153 crore-initial public offering (IPO) of mortgage lender Home First Finance Company India Limited has been subscribed 79% so far.
The affordable housing finance company’s public issue received bids for 1.62 crore lakh equity shares against an offer size of more than 1.56 crore shares, data available on the exchanges showed.
The company already raised Rs 346 crore from anchor investors on January 20 and the issue size has been reduced to 1.56 crore shares (or Rs 880 crore) after fund-raising from the anchor book.
The portion reserved for retail investors has been subscribed 1.29 times and that of non-institutional investors 12.7%, while qualified institutional buyers’ portion set aside was subscribed 1.28 times.
The public issue comprises a fresh issue of Rs 265 crore and an offer for sale of Rs 888.71 crore by promoters True North Fund V LLP and Aether (Mauritius), investor Bessemer India Capital Holdings II Ltd, and two individual shareholders-PS Jayakumar and Manoj Viswanathan.
This is the third public offering of 2021, after IRFC and Indigo Paints.
As reported by Moneycontrol Jyoti Roy, DVP- Equity Strategist at Angel Broking, said, “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. 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.”
Home First Finance has set a price band of Rs 517-518 per equity share, with a face value of Rs 2 each. The issue closes on January 25. Investors can bid in lots of 28 shares and multiples thereof. After the issue, Home First Finance’s implied market capitalisation could rise between Rs 4,518 crore and Rs 4,527 crore.
Incorporated on February 3, 2010, Home First Finance is an affordable housing finance company that targets first time home buyers in low- and mid-income groups. It primarily offers customers housing loans for the purchase or construction of homes, which comprised 92.1% of gross loan assets, as of September 30, 2020. Gross loan assets have grown at a CAGR of 63.4% between FY18-20 and increased to Rs 3,730.01 crore as of September 30, 2020.
Its net worth stood at Rs 988.2 crore as of 1H FY21. Home First Finance has a network of 70 branches covering over 60 districts in 11 states and a union territory in India, with a significant presence in the states of Gujarat, Maharashtra, Karnataka and Tamil Nadu.