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Home >Markets >Ipo >Home First IPO fully subscribed on Day 1

Home First IPO fully subscribed on Day 1

The portion reserved for retail investors was subscribed 1.29 times, while non-institutional investors picked up 10% of the shares reserved for them

The portion reserved for retail investors has been subscribed 1.28 times and that of non-institutional investors 10%, while qualified institutional buyers' was subscribed 1.28 times

Mumbai: 1154 crore initial public offer (IPO) of Home First Finance Company India was subscribed 1.03 times on Thursday, the first day of bidding.

Mumbai: 1154 crore initial public offer (IPO) of Home First Finance Company India was subscribed 1.03 times on Thursday, the first day of bidding.

The affordable housing finance company's public issue received bids for 1.62 crore lakh equity shares against an offer size of more than 1.56 crore shares, data available on the exchanges showed.

The affordable housing finance company's public issue received bids for 1.62 crore lakh equity shares against an offer size of more than 1.56 crore shares, data available on the exchanges showed.

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The portion reserved for retail investors has been subscribed 1.28 times and that of non-institutional investors 10%, while qualified institutional buyers' was subscribed 1.28 times.

The price band for the issue, has been fixed at 517-518 per share, which will close on January 25.

"Aided by its high growth momentum on a smaller base, superior underwriting standards, and efficient collections management, Home First delivered a healthy return on assets (RoA) of 2.7% in FY20. Return on equity (RoE) of 11% looks modest owing to lower leverage at 4 times in FY20. The issue is priced at post-money P/BV of 3.4 times compared to its nearest competitor Aavas Financiers which trades at 6.8 times on September book value (BV)," said Yes Securities.

The public issue comprises a fresh issue of 265 crore and an offer for sale of 888.71 crore by promoters True North Fund V LLP and Aether (Mauritius), investor Bessemer India Capital Holdings II Ltd, and two individual shareholders-PS Jayakumar and Manoj Viswanathan.

Analysts at Motilal Oswal in an IPO note said "With the government's focus on 'Housing for All' by 2022, affordable housing has seen strong growth over last six years. Smaller players like HFF have created a niche in this space and are capitalizing on this multi-year opportunity".

"We like the company as the leverage on digital technology, wide distribution network, high quality housing finance portfolio, and robust expansion plans. It showed resilience during covid-19 with more than 96% collection efficiency. The issue is valued at 4.8 times FY20 P/BV which is comparable to peers. We recommend Subscribe for Long Term" it added.

The company plans to utilise net proceeds from the fresh issue for augmenting its capital base to meet future capital requirements, arising out of the growth of business and assets.

Incorporated in 2010, Home First Finance Company India primarily provides housing loans to first-time homebuyers in low and middle-income groups, for commercial property, loan against property and construction finance.

Also, on Thursday, the IPO of Pune based Indigo Paints Ltd saw a subscription of 6.92 times, the second day of bidding.

The paints company's public issue received bids of 381.75 lakh shares against the offered 55.18 lakh shares, as per the data available on the exchanges.

The portion reserved for retail investors was subscribed 9.49 times. Qualified Institutional Buyer and Non-Institutional Investor category was subscribed 3.86 times and 5.31 times respectively. The portion reserved for eligible employees was subscribed 1.81 times.

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