Home First Finance IPO: Consolidated Brokerage Views

This post on Home First Finance IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Home First Finance IPO or not.

Related Posts : Home First Finance IPO Review

Home First Finance IPO: Grey Market Premium etc.

  • 25-01-21 GMP 100-110
  • 23-01-21 GMP 110-120
  • 20-01-21 GMP Rs. 170

Subscription: Home First Finance IPO ( x times)

Day / X timesQIBNIIRetailTotal 
Day 352.6339.086.626.71
Day 21.360.613.402.22
Total Retail Applications ~ 1512017
Appl wise Retail5.43x

Consolidated Brokerage Views on Home First Finance IPO

Angel Broking :”Subscribe: Home First has posted strong growth in NIIof 58.6% CAGR between FY18-20 while net profits have grown at a CAGR of 122.6% during the same period. Despite the Covid-19 crisis the company’s asset quality has remained largely stable with GNPA and NNPA largely stable at 0.7% and 0.5% respectively at the end of 1HFY2021. The company had a CAR of 51.7% at the end of 1HFY2021which provides comfort. 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 `143.4per 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.

Capital Market : ” Score 47/100 ; The company, being in the affordable housing finance segment, the focus is on customers in the low and middle-income groups which are prone to various risk such as loss of employment, insolvency, lack of liquidity or personal emergencies such as the death of an income generating family member, including on account of events such as the COVID-19 pandemic. Further, the self-employed customers are often considered to be higher credit risk customers due to their increased exposure to fluctuations in cash flows and to adverse economic conditions. The company needs to sustain strong loan growth and maintain stable asset quality and profitability to support premium valuation.”

Choice Broking: “At the high price band of Rs518,theissue is valuedat P/BV of 3.6x post issue BVPS of Rs143.5. Demanding valuation seems fully priced. Subscribe with Caution to Home First Finance IPO”

HEM Securities: “According to the ROCCO Report 2020, company was ranked as a tier one application-to-peer (“A2P”) service provider internationally. Further, company was ranked second globally as a tier one A2P service provider in 2017. Company was also ranked first for ‘value added services’ provided, its ‘implementation process’ and its ‘uptime performance’ among tier one vendors. In the three months ended June 30, 2020, through its cloud communications platform, company processed more than 6.95 billion billable transactions. In Fiscal 2020, company’s platform managed more than 30.31 billion billable transactions from its clients and was used by more than 2,700 clients while it managed more than 24.74 billion billable transactions in Fiscal 2019.Therefore, we recommend “Subscribe” to the Home First Finance issue both for listing gains & long term horizon.”

Geojit: At the upper price band of Rs.518, HFFC is available at a P/BV of 3.6x on its FY21E BV of Rs. 143.4(annualized), which is fairly priced. In spite of short to medium term concerns like COVID-19 and moratorium, we expect HFFC to maintain good growth trajectory in affordable housing market. We recommend Subscribe with a long term perspective.”

SMC: “Score 2.5/5 ; Home First Finance is a fastest growing mortgage lender in India. It has shown strong revenue and margin growth in the last 4 years. However at this valuation, the issue looks expensive. As affordable housing segment is set to grow more with Government of India’s drive of “HOME FOR ALL BY 2022”, investors may opt the issue with long term perspectives”

SP Tulsiyan Website: “In view of contracting profit margin, structured objects of fresh issue, client concentration risk and unattractive pricing, one can give the Home First Finance IPO a miss.”

Ventura : At the upper price band of the IPO, Home First is valued at 2.6X FY23 P/BV. Given the strong prospects, we recommend a BUY on the stock.”

Yes Securities : “Aided by its high growth momentum on a smaller base, superior underwriting standards, and efficient collections management (GNPAs at <1% and modest credit costs), HFF delivered healthy RoA of 2.7% in FY20. RoE of 11% looks modest owing to lower leverage at 4x in FY20. The issue is priced at post-money P/BV of 3.4x compared to its nearest competitor Aavas Financiers which trades at 6.8x on September BV.”


Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.

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