Home First Finance share price was listed on the exchanges yesterday and made a high of Rs 640 (almost 20% high to the issue price). However, due to some selling pressure during the second half, the stock price closed just 2% above the issue price of Rs 518. The market cap of Home First Finance is over Rs 5000 cr and the stock is witnessing good buying today. Share prices of Home First Finance have soared over 10% from yesterday’s close and the stock is seeing good price and volume action today. The current market price of Home First Finance is Rs 583. 

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Home First Finance Company India is a technology driven affordable housing finance company that targets first time home buyers in low and middle-income groups. Home First Finance primarily offers customers housing loans for the purchase or construction of homes, which comprises 92.1% of its Gross Loan Assets, as of Sept 30, 2020. Its Gross Loan Assets have grown at a CAGR of 63.4% between the financial year 2018 and the financial year 2020 and increased from Rs 13559 mn as of March 31, 2018 to Rs 37300 mn, as of Sept 30, 2020.

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Home First Finance serves salaried and self-employed customers. Salaried customers account for 73.1% of our Gross Loan Assets and self-employed customers account for 25% of Gross Loan Assets, as of Sept 30, 2020. It serviced 44796 active loan accounts, as of Sept 30, 2020.

Home First Finance 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 mn, with an average loan-to-value on Gross Loan Assets of 48.8%, as of Sept 30, 2020. As of Sept 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.

The Issue of Equity Shares of Home First Finance Company aggregating upto Rs 1153.72 Cr (Fresh Issue of Equity shares aggregating upto Rs 265 Cr and Offer for sale of Equity shares aggregating upto Rs 888.72 Cr).

Home First Finance Valuation:

At the upper end of the Home First Finance IPO price band, it is offered at 4.5x P/B, with a market cap of Rs 4688 cr. On comparative basis, the company’s valuation is at a discount compared to Aavas Financiers Ltd. which is currently trading at 6.7x P/B however the valuation is at a premium compared to the other peers