About Home First Finance
(i) Founded in the year 2010, Home First Finance is the technology-driven home finance company that typically targets first time home buyers in the low and middle-income groups. 91% of the total loan book is given to purchase or construct a house.
(ii) Home First Finance targets salaried and self-employed customers and these two comprises of 72.6% and 24.6% of the loan book, respectively. As on 30.09.2019, it has 37,086 active loan accounts with 3133 Cr of Gross loan book. The average ticket size of the loan is 10.2 Lakh.
(iii) They also offer other types of loans comprising loans against property, developer finance loans, and loans for the purchase of commercial property; however, it comprised only 4.7%, 2.8%, and 1.1% of total Gross Loan Assets.
As on 30.09.2019, Home First Finance has a network of 65 branches covering over 60 districts in 11 states and a union territory in India, with a significant presence in urbanized regions in the states of Gujarat, Maharashtra, Karnataka, and Tamil Nadu.
The company over the years has expanded into those territories where there is a demand for home buyers. Before setting up a new branch in a district, they conduct an in-depth study of the micro markets around the branch to assess the potential demand for housing finance and target regions with increasing urbanization and housing demand.
Underwriting and Risk Management
The company has leveraged technology to process the loan and to manage the risk. They have developed a paperless process of the loan disbursement and they have a dedicated sales team who goes to buyer home and ensure minimal disruption to customer daily routine while disbursement of the loans.
For underwriting, Home First Finance is utilizing proprietary machine learning customer scoring models for a centralized credit underwriting process, which has led to consistent and accurate credit evaluation with quick turnaround time.
They digitally capture over 100 data points of a customer in addition to credit bureau data, observations of the front end teams, and feedback from the underwriting and management teams. They capture and store all the data on a cloud services platform. They have entered into arrangements with third-party service providers through whom they obtain additional information such as fraud-related data, banking, investment and taxation related data, and vehicle ownership of customers, which enables Home First Finance with underwriting and to identify areas of concern and take quick and accurate decisions.
To disburse loans one needs money. Let us see how Home First Finance has borrowed money over the years.
As on 30.09.2019, the company has outstanding borrowing of 2295 Cr. They mostly borrow from the private banks, public banks, NHB (National Housing Board), a subsidiary of RBI, and through assignment transactions. 37% of borrowing is from NHB.
Credit rating is the most important parameter which all analysts should look carefully at. The highest credit rating means the company is serving its principal and interest on time. The highest credit rating is not only good for the lending institutions but also for shareholders of the company.
As on 30.09.2019, Home First Finance currently has an ‘A+ (stable) rating from ICRA Limited.
Founders and Investors
The Company was founded by Jaithirth Rao, P. S. Jayakumar, and Manoj Viswanathan in August 2010. The company is managed by professionals and the Promoters are True North Fund V LLP and Aether (Mauritius) Limited. Further, Bessemer has also invested in the Company.
The company has already filed for an IPO and got the approval from SEBI in the month of March-2020.
Marketing Video of Home First Home Finance
|Total Available Shares:||1000|
|Face Value:||₹ 2 Per Equity Share|
|Lot Size:||100 Shares|
|Current Unlisted Share Price:||₹ Best in Industry Per Equity Share|
|Name of the shareholder||Number of Equity Shares||% of Equity Shares|
|TN V LLP||35997070||42.8|
|P. S. Jayakumar||4037775||4.8|
|Particulars (in Crores)||6MFY20||2019||2018||2017|
|Key Metrics of HFC|