The Home First Finance IPO, bidding for which closed on January 25, was subscribed 26.66 times. The issue had received bids for 41,64,36,944 shares against 1,56,20,948 shares on offer, according to data available with NSE.
The portion reserved for qualified institutional buyers(QIBs) was subscribed 52.53 times, for non-institutional investors 39 times and for retail investors 6.59 times.
A day prior to listing, the issue was commanding a grey market premium of Rs 130, helped by the post-Budget rally in the secondary market, said dealers. The grey market premium of Home First Finance’s shares had plummeted more than 50 per cent in the past few sessions to as low as Rs 60, after quoting at Rs 150 on January 24.
The IPO included an offer for sale (OFS) of Rs 888.72 crore worth shares, and a fresh issue of shares worth Rs 265 crore. The price band for the issue was fixed at Rs 517-518. Investors could bid for a minimum of 28 equity shares and in multiples thereafter.
Analysts said the HFC has reported a strong set of numbers over the last couple of years. Asset quality for the company, which caters to first-time home-buyers in low- and middle-income groups, has remained strong so far despite the Covid-19 crisis. Valuation-wise as well, the issue was available at modest price-to-book value (P/BV) multiples compared with its listed peer, Aavas Financiers.
Over FY17-20, Home First registered loan and disbursements growth of 56.7 per cent and 56.2 per cent, respectively. It managed to tweak its housing loans’ share to 92 per cent in FY20, from 96.7 per cent in FY17, and share of loan against property (LAP) to 5.1 per cent, from 2.1 per cent. Its lending spread improved to 4.5 per cent in FY20, from 3.3 per cent in FY17.
Home First operates with an average housing loan ticket size of Rs 10 lakh, and has a strong presence in economically healthier states, like Gujarat (39 per cent of gross loan portfolio), Maharashtra (21 per cent), Tamil Nadu (10.5 per cent), Karnataka (9.3 per cent) and Rajasthan (5.1 per cent).
