Home First Finance Company India Limited: history, ownership, mission, how it works & makes money

A Brief History of Home First Finance Company India Limited

Home First Finance Company India Limited (HFFC) was established in 2010, with a focus on providing affordable housing finance solutions in India. The company primarily serves first-time home buyers and other customers in the low and middle-income segments, which has been a growing market due to rising urbanization and a push for affordable housing by the Indian government.

In its early years, HFFC operated mainly in key urban areas and gradually expanded its footprint across various states in India. By end of FY2022, the company reported a loan book of approximately ₹2,911 crores. Its focus on technology-driven processes has helped streamline operations and enhance customer experience.

The company achieved a significant milestone in 2021 when it went public through an Initial Public Offering (IPO) that raised approximately ₹1,154 crores. The issue price was set at ₹518 per share, gaining substantial interest from investors. Following its IPO, the stock saw commendable performance in the market.

By the end of FY2023, HFFC reported a net profit of approximately ₹136 crores, reflecting a year-on-year growth of about 36% from ₹100 crores in FY2022. The earnings per share (EPS) for FY2023 reached ₹9, compared to ₹6.6 in the previous fiscal.

HFFC’s asset quality remains robust, with a Gross Non-Performing Asset (GNPA) ratio of 1.4% as of March 2023, which is considerably lower than the industry average. The company continues to benefit from a well-diversified funding mix, which includes bank loans, financial institutions, and public deposits, aiding its growth trajectory.

In recent years, HFFC has prioritized technology integration, launching digital platforms for loan origination and management. This move has significantly reduced processing times and improved customer satisfaction. The company’s tech advancements have contributed to a compound annual growth rate (CAGR) of approximately 30% in its customer acquisition since its inception.

The share price has shown resilience and growth, trading at around ₹670 as of October 2023, marking a rise of approximately 29% since its IPO price. HFFC aims to further expand its market presence, targeting a loan book of ₹5,000 crores by FY2025, supported by strong demand for housing finance across India.

Overall, HFFC has established itself as a formidable player in the Indian housing finance sector, with solid financial performance and a strategic focus on technology, ensuring its competitive edge in the market.

A Who Owns Home First Finance Company India Limited

Home First Finance Company India Limited, established in 2010, specializes in providing housing finance solutions primarily to first-time homebuyers. The company operates in the affordable housing segment and has gained a reputation for its customer-centric approach and innovative financial products.

As of the latest available data in October 2023, Home First Finance Company India Limited is publicly traded on the National Stock Exchange (NSE) under the ticker symbol HOMEFIRST. As of the last trading session, the stock price was approximately ₹563 per share, reflecting a market capitalization of around ₹3,200 crores.

The promoter shareholding is primarily held by HDFC Ltd., which owns approximately 43.25% of the total shares. J.C. Flowers & Co. LLC is another key promoter, retaining about 20.09%.

In terms of institutional participation, Home First Finance has attracted several investment firms and mutual funds. Notably, as of the latest report, several well-known mutual funds have invested, including HDFC Mutual Fund and ICICI Prudential Mutual Fund, which have taken significant positions in the company.

Revenue for Home First Finance Company for the fiscal year ending March 2023 stood at approximately ₹600 crores, representing a growth of 22% year-over-year. The net profit for the same period was around ₹110 crores, which is a notable increase from the previous year's ₹90 crores.

The company has a robust asset quality, with a Gross Non-Performing Asset (GNPA) ratio reported at 1.75% as of March 2023, showcasing effective credit risk management practices.

In terms of market trends, the demand for affordable housing finance in India continues to rise, driven by government initiatives and increasing urbanization. Home First's positioning in this segment is likely to attract further investor interest and continue to drive growth.

Home First Finance Company India Limited Mission Statement

Home First Finance Company India Limited (HFFC) is a prominent player in the affordable housing finance segment. Their mission is centered around providing financial solutions that empower individuals to achieve home ownership. This objective resonates with their commitment to enhance the quality of life through the provision of home loans that are accessible and affordable.

As of the latest reports, HFFC has financed over 1,50,000 housing units, targeting first-time home buyers and economically weaker sections. The company emphasizes financial inclusion by offering transparent and customer-friendly solutions.

The mission statement reflects their focus on offering:

• Affordable housing solutions.
• Customer-centric service delivery.
• Innovation in financial products.
• Sustainable business practices.

In the financial year ending March 2023, HFFC reported a revenue of approximately ₹1,200 crore, which marks an increase from the previous year, reflecting a growth rate of 25%.

The company's strategic priorities include leveraging technology to streamline operations, enhancing customer experience, and expanding their footprint in under-served markets. HFFC’s mission is not only about financial growth but also about community building and contributing positively to society.

As of September 2023, the company's gross non-performing assets (GNPA) stood at 1.5%, reflecting robust credit quality management. HFFC’s focus on maintaining low GNPA levels supports their mission of sustainable lending practices.

Home First Finance Company prides itself on fostering a culture of innovation, which is evident in its diverse offering of products aimed at different segments of the housing market. Their mission statement encapsulates the drive to be a leader in affordable housing finance.

How Home First Finance Company India Limited Works

Home First Finance Company India Limited (HFFC) focuses on providing affordable housing finance solutions primarily for first-time homebuyers in India. The company aims to cater to the growing demand for housing, especially in tier 2 and tier 3 cities. HFFC offers a range of products including home loans, loan against property, and construction finance.

As of March 2023, HFFC reported a total loan book of approximately ₹9,500 crore, reflecting a growth of around 30% year-on-year. The company's net profit for the financial year 2022-2023 stood at ₹250 crore, showing an increase from ₹190 crore in the previous year. The return on assets (ROA) was recorded at 2.5%, while the return on equity (ROE) was at 12%.

The company predominantly sources its funds through the issuance of non-convertible debentures (NCDs) and bank loans. As of the latest reports, more than 80% of HFFC's loans are secured against property, ensuring lower risk and robust asset quality. The gross non-performing asset (NPA) ratio stood at 1.5%, while the net NPA ratio was recorded at 0.7%, indicating a strong credit evaluation process and risk management strategy.

HFFC also emphasizes technology integration in its operations. The company uses digital platforms for loan applications and processing, which has streamlined operations and reduced turnaround time. The average loan disbursal time is around 7 days, making it competitive in the housing finance sector.

The company’s target market is primarily the affordable housing segment, which constitutes nearly 60% of its total lending activities. HFFC focuses on individuals with low to moderate income, providing loans typically ranging from ₹10 lakh to ₹50 lakh. The average ticket size of home loans is approximately ₹30 lakh.

In terms of customer base, HFFC has served over 150,000 customers since its inception. The company's initiatives in financial literacy and customer engagement have strengthened its position in the market. HFFC's strategic partnerships with various builders and real estate developers further enhance its offering by providing customers with a range of options.

As of October 2023, the company's share price was trading around ₹600, with a market capitalization of approximately ₹8,000 crore. The stock has shown a year-to-date increase of nearly 20%.

How Home First Finance Company India Limited Makes Money

Home First Finance Company India Limited (HFFC) predominantly generates revenue through the provision of home loans and allied financial products. As a housing finance company, it targets the affordable housing sector, catering primarily to first-time homebuyers. HFFC’s business model centers around offering competitive interest rates, flexible repayment options, and quick disbursement of loans.

In the fiscal year ending March 2023, HFFC reported a total income of ₹873.73 crore, reflecting a significant increase from ₹575.48 crore in the previous fiscal year, marking an impressive growth rate of approximately 51.93%.

The company's net profit for the same period stood at ₹192.27 crore, up from ₹117.60 crore in FY 2022, demonstrating a year-on-year growth of 63.56%.

HFFC primarily sources its income from the following segments:

• Interest Income: Interest from home loans is the largest income segment, contributing significantly to total revenue.
• Processing Fees: Fees charged for processing loan applications form another key revenue stream.
• Other Income: This includes income from insurance commissions and ancillary services related to home financing.

The following table provides a breakdown of HFFC's revenue streams for FY 2023:

HFFC's interest rates are competitive, generally ranging from 8.50% to 10.50%, depending on the customer's credit profile and loan amount. The company has a diverse loan portfolio, with a significant portion of loans being targeted at the Economically Weaker Section (EWS) and Low-Income Group (LIG) segments, which often have lower borrowing amounts but higher growth potential.

As of September 2023, HFFC's asset under management (AUM) reached ₹6,942 crore, with a net interest margin of 3.85%, which is considered healthy within the housing finance sector. The company has maintained a low non-performing asset (NPA) ratio, standing at 1.25% for the same period, indicating efficient credit risk management.

HFFC continues to explore growth opportunities through digitalization, enhancing customer service, and expanding its reach across India. The demand for affordable housing remains robust, driven by government initiatives and urbanization trends, positioning HFFC to capitalize on this growing market.