Global private equity firm Warburg Pincus has increased its stake in the IPO-bound Home First Finance Company (HFFC) by 5.03 percent
The leading affordable housing finance company, on January 14, announced that certain existing shareholders of the company have sold a part of their equity shareholding in the company to Orange Clove Investments B.V., an affiliate of the private equity funds managed by Warburg Pincus.
As a part of the share subscription and purchase agreement dated October 1, 2020, and pursuant to the approval of the RBI, "Orange Clove has purchased 5.03 percent shares from the existing shareholders. Post the transaction, Orange Clove now owns 30.62 percent in HFFC," the statement said.
Warburg Pincus considered this as a great opportunity to expand its investments in the financial services sector in India and believes that the existing association will help Home First to further strengthen its financial position and growth prospects.
In October last year, the private equity investor had picked up 25 percent stake in the Mumbai-based private lender for Rs 700 crore from existing marquee PE firm shareholders.
Home First Finance Company received the approval from the capital market regulator Sebi for its initial public offering in March last year. The Rs 1,500-crore public issue comprises of a fresh issue of Rs 400 crore and an offer for sale of Rs 1,100 crore by promoters and existing shareholders.
The offer for sale consists of Rs 498.4 crore worth of shares by promoter True North Fundv LLP, Rs 332.2 crore shares by promoter Aether (Mauritius), and Rs 176.4 crore by investor Bessemer India Capital Holdings II, Rs 56 crore by PS Jayakumar, Rs 35.9 crore by Manoj Viswanathan and Rs 1.1 crore by Bhaskar Chaudhry.
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Founded in 2010, Home First is a technology-driven, affordable housing finance company, providing home loans to customers from low and middle-income groups, who are building or buying their first homes. Over the last 10 years, Home First has sanctioned home loans to more than 50,000 customers in 60 districts, across 11 states and 1 union territory. As of September 2020, Home First had an AUM of Rs 3,730 crore with a net worth of Rs 988 crore and gross non-performing assets of 0.74 percent.
HFFC had reported a 44.1 percent year-on-year growth in profit at Rs 52.95 crore for the six-month period ended September 2020, on a revenue of Rs 88.2 crore which increased by 36.9 percent YoY. In the financial year 2019-20, profit rose by 75.3 percent to Rs 79.25 crore and revenue jumped 45.4 percent to Rs 151.27 crore compared to the previous year.
Axis Capital, Credit Suisse Securities (India), ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers to the issue.