By Dominick Rodrigues
Mumbai: Home First Finance Company Ltd announced the launch of its IPO of equity shares from January 21 to January 25 at between Rs 517 and Rs 518 per equity share, aggregating up to Rs. 11,537.19 million.
Manoj Vishwanathan, MD/ CEO, Home First Finance Company Ltd, here today highlighted the company as a ‘tech-driven, affordable housing finance’’ with presence in 60 districts of 11 states and providing home loans to customers that included mostly first-time home buyers in the: salaried (75%), Self-employed (25%) and other segments.
“Our future strategy includes: leveraging technology to grow our business and develop end-to-end digital process, expand our branch network in large affordable housing markets, grow productivity and reduce operating costs in branches via continuous automation,” he said.
Replying to questions, Vishwanathan said the emphasis continued on adding/hiring staff at various levels as per requirements, while maintaining the company’s three-pronged credit process to enable loans for customers struggling with credit documentation/validation.
The company’s lead business channels and other sources included: builders (who are approached by home-buyers), shop keepers, he said while emphasizing the company’s philosophy of +turning around loans quickly (within 48 hours).+ “We have over-provided to protect ourselves against possible disruptions. While Mumbai and Gujarat represent 50% of our market, the Southern states comprise 35% with Madhya Pradesh, Rajasthan and Uttar Pradesh being remaining 15%.”
“Our company was set up in 2010 and has presently grown to Rs 3,730 crores, where our loan books — having 44,467 customers — comprise 92% pure housing loans between Rs 5 and Rs 25 lakhs. The investors include Warburg Pincus (29.2% stake), truenorth, GIC, Bessemer Venture Partners etc.”
“We are a technology-driven company with Data Science-backed underwriting and in-depth understanding of local markets. Our Net worth is Rs 988.2 crores and our PAT was Rs 53 crores. Our customers included: teachers, diamond polishers, fabrication shops – all which have a steady income but face problems providing credit documentation,” he said while describing this segment as a “formal/informal and self-employed segment” and huge, untapped opportunity in a large market with increasing income.
Highlighting the company’s holistic use of technology and deep distribution in relevant markets through analytics-driven electronic collections, data on Cloud and Company mobile App for customers, he said its portfolio displayed declining trend of bounce rates over the last few quarters and GNPA less than 1 per cent during the pandemic.
“In the post-covid scenario (where 10% of our employees were affected but we hand-held them till their return to work), we raised Rs 860 crores in the first half of H1FY21 at 8.0% incremental cost of borrowing while continuing digital customer engagement and witnessing 96% collection efficiency in October 2020.”
Nutan Gaba Patwari, CFO, said the company borrowings represented a diversified mix that included PSU banks (27%), private banks (22%) and its growth being best at 63%, compared to its peers.
The Offer aggregating up to Rs. 11,537.19 million comprises of a fresh issue of up to Rs. 2,650 million and an offer for sale aggregating up to Rs. 8,887.19 million by the Selling Shareholders, being True North Fund V LLP (“True North”) and Aether (Mauritius) Limited (“Aether”) (collectively, “Promoters”), Bessemer India Capital Holdings II Ltd, an existing investor and certain individual shareholders of the Company.
The fresh issue portion of the Offer aggregates up to Rs. 2,650 million, excluding the pre-IPO placement of approximately Rs 750 million and Rs 40.84 million to Orange Clove Investments B.V (an affiliate of Warburg Pincus) and certain employees of the Company, respectively by way of preferential allotments. The Offer for Sale aggregates up to Rs 8,887.19 million; the breakup of which is as the follows: up to Rs. 4,356.15 million by True North, up to Rs. 2,912.83 million by Aether, up to Rs. 1204.61 million by Bessemer India Capital Holdings II Ltd. and up to Rs. 413.60 million by the two individual shareholders.
Axis Capital Limited, Credit Suisse Securities (India) Private Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited are the BRLMs to the Offer.
