Home First Finance IPO is priced at Rs 517-518 per share. It includes a fresh issue of Rs 265 crore and an offer for sale (OFS) of Rs 888 crore by existing shareholders of the firm.
The initial public offerings (IPO) of 2021 have so far garnered decent interest. The second public issue of the year, Indigo Paints, was oversubscribed by investors on the very first day of the subscription window. Hoping to tread on the same path, Home First Finance’s IPO will open for subscription today, making it the third offering of 2021 so far. Ahead of the issue, the firm has raised Rs 346 crore from marquee foreign and domestic investors, allotting them 66.81 lakh equity shares at Rs 518 per share.
Anchor Investors put in Rs 346 crore
Among foreign investors that have picked up shares of Home First Finance include, Nomura Trust, Buena Vista Asia, Fidelity, CLSA Global, BNP Paribas, Goldman Sachs, and Morgan Stanley. Buena Vista Asia, Morgan Stanley and CLSA Global have picked up 5.78% of the anchor investors portion each. Of the total anchor investor portion, 22.29 lakh equity shares were allotted to 5 domestic mutual funds through 26 different schemes. Some of the marquee DII names to have picked up shares of the firm include, Motilal Oswal Financial Services, Sundaram Mutual Fund, ICICI Prudential, and Aditya Birla Sunlife among others.
Issue details, valuations
Home First Finance IPO is priced at Rs 517-518 per share. It includes a fresh issue of Rs 265 crore and an offer for sale (OFS) of Rs 888 crore by existing shareholders of the firm. Through the IPO, the promoter shareholding in the firm will drop to 33.7% from the current 52.85% and the public shareholding will jump to 66.3% from 47.15%. Investors can bid for the issue in a bid lot of 28 shares and multiples thereafter.
“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,” said Rajiv Mehta, analyst, Yes Securities in a recent note on Home First Finance while advising investors to ‘Subscribe’ to the issue. Analysts at LKP Securities believe the issue to the valued at 4.1 (x) 2QFY21 P/ BVPS. “Factoring the superlative return ratios, ROA/ROE of 11%/3%, we believe that Home First Finance Company is worth subscribing. Thus we recommend ‘Subscribe’,” they said.
The issue has been oversubscribed by retail investors as well as non-institutional investors (NII) on day one. Retail subscription stands at 3.29 times while NII portion has been subscribed 1.10 times so far. Qualified Institutional Buyers (QIB) bids stand at just 10% of their quota while employees of the firm have subscribed to 79% portion on offer. Indigo Paints issue has been commanding at a strong grey market premium of more than 50%. The firm is among the fastest-growing decoratives paints companies with a healthy market share. Indigo Paints’ issue closes for bidding tomorrow.
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