Home First Finance Company shares began trading at a premium over the IPO price and were at a market capitalization of Rs 5,349 crore.
SGX Nifty was hinting at a gap-down opening.
Home First Finance Company made its trading debut on Dalal Street today at Rs 612 per share, a premium of Rs 94 or 18.18% from the issue price. Shares of the firm surged further, after the initial few minutes of trade to reach Rs 637 apiece. Home First Finance became the third IPO of 2021 to list on the bourses successfully. On listing the housing finance firm was commanding a market capitalization of Rs 5,349 crore. Home First’s IPO was subscribed 26 times by investors, bidding for 41.64 crore shares against 1.56 crore that were on offer. At the end of the day’s trade, share price of Home First Finance Company was down 13.8% from the listing price and just 1.8% above the issue price.
The issue ran through the last two weeks of January, where investors were offered the shares in a bid lot of 28 equity shares or multiples, priced at Rs 517-518 per share. This translated to an issue size of Rs 1,150 crore. Largely the issue is an OFS with a fresh issue of just Rs 270 crore. QIBs were the largest bidders for the issue, placing bids 52.53 times their portion, followed by non-institutional investors (NII) who bid 39 times their quota. Retail investors bid for just 6 times their portion, taking the total bidding for the issue to 26.66 times.
Home First focuses on first time home buyers with an average loan ticket size of Rs 10 lakh. “It has built a wide distribution network of 70 branches spread across 11 states with Gujarat and Maharashtra contributing 60% share in loans,” brokerage firm Motilal Oswal said in a note. Home First Finance Company’s disbursements quadrupled to Rs 1,570 crore over fiscal year 2017-2019, delivering a loan book CAGR of 56% over the financial year 2017-2020. Motilal Oswal has a ‘Subscribe for long term’ view on the issue, valuing it at 4.8x FY20 P/BV which is comparable to peers.
Analysts at Yes Securities had a subscribe rating on the issue. “Aided by its high growth momentum on a smaller base, superior underwriting standards, and efficient collections management, Home First Finance delivered a healthy RoA of 2.7% in FY20,” they said. Ye Securities values the issue at post-money P/BV of 3.4x. Just ahead of the listing, Home First Finance shares were trading with a hefty premium of Rs 140 per share in the unlisted space.
(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)