Home First Finance share list at Rs 618.80, a 19% premium over issue price

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Affordable housing finance company Home First share price surged 19 percent in the opening over issue price on February 3, following positive mood at Dalal Street post Budget and amid strong fundamentals with asset quality performance.

Shares started off the day at Rs 612.15 on the BSE, against issue price of Rs 518 per share. On the National Stock Exchange, the stock opened with a 19.46 percent premium at Rs 618.80.

On the NSE, it was quoting 21.62 percent higher at Rs 630,at 10:02 hours IST.

Bengaluru-based Home First Finance Company India, which is primarily engaged in the business of lending of housing loans to first time home buyers in low and middle-income groups, launched its Rs 1,154 crore public issue for subscription on January 21 and closed the same with 27 times subscription on January 25.

The company will utilise net proceeds from its fresh issue (out of Rs 265 crore) to augment capital base to meet future requirements. It has posted strong growth in net interest income of 58.6 percent CAGR between FY18-20 while net profits have grown at a CAGR of 122.6 percent during the same period.

Despite the COVID-19 crisis the company's asset quality has remained largely stable with gross non-performing assets (NPA) and net NPA largely stable at 0.7 percent and 0.5 percent respectively at the end of first half of FY21.

The fast growing home financier had a capital adequacy ratio of 51.7 percent at the end of first half of FY21 which provides comfort, said Angel Broking which expects the company to post strong growth driven by strong demand for affordable housing.

Angel Broking, which also provides loans for the purpose of purchasing commercial property, and loans against property and construction finance, has a strong network of 70 branches covering over 60 districts in 11 states and is strategically placed in geographies with high economic growth and substantial demand for affordable housing finance.

Its loans for purchase or construction of property comprised 92.1 percent of its gross loan assets at the end of September 2020. Salaried customers accounted for 73.1 percent and self-employed customers 25 percent of gross loan assets. Its gross loan assets have registered a growth at a CAGR of 63.4 percent in FY18-FY20.