Home First Finance jumps 9% after raising ₹1,250-crore via QIP

ICICI Securities was trading at ₹1.138.20, up 7.46 per cent from Friday's close of ₹1,059 on the National Stock Exchange

Home First Finance share price: Shares of housing finance company Home First Finance surged nearly 9 per cent to hit an intraday high of ₹1,151.20 on Tuesday after the company announced the completion of its Qualified Institutional Placement (QIP).

 

The company raised ₹1,250 crore by issuing 12.8 million equity shares at ₹970 per share, a 4.8 per cent discount to Sebi's floor price of ₹1,019.25 per share. The QIP opened for subscription on April 8 and closed on April 11, garnering solid interest from global and domestic investors. With this, the company’s paid-up capital increased to ₹20.6 crore from ₹18 crore, with total shares increasing to 1.03 million from 0.9 million. 

 

According to an ICICI Securities report, the fresh capital of ₹1,250 crore will offer adequate capital to fund incremental growth, as the company plans to achieve total assets under management (AUM) of ₹40,000 crore by FY30, implying a 27 per cent CAGR between FY24-30.

 

At 2:55 PM, the stock was trading at ₹1.138.20, up 7.46 per cent from Friday’s close of ₹1,059 on the National Stock Exchange (NSE). In comparison, the benchmark NSE Nifty50 index was trading at 23,323.35, up 494.80 or 2.17 per cent. The company’s total market capitalisation stood at ₹10,248.32 crore. 

 

The stock is trading around 17 per cent down from its 52-week high of ₹1,383.3, which it touched on October 9, 2024. On a year-to-date basis, the stock has jumped nearly 9 per cent compared to around 1.1 per cent fall in the Nifty50 index. 

 

The brokerage firm has upgraded the stock’s rating to ‘Buy’ from ‘Add’. With the target price of ₹1,350, it expects a 17 per cent upside from the current market price. 

 

“With higher visibility of Home First sustaining its growth momentum and steady 15 per cent RoE by FY27E, we upgrade the stock to BUY (from Add) and revise our TP to ₹1,350, valuing it at 3x Sep’26E BVPS (earlier 3.5x Sep’25E),” the brokerage said.

 

According to ICICI Securities, since its listing in September 2021, Home First Finance has managed to stand out among its competitors in the affordable housing space. The company has continuously delivered 6-8 per cent Q-o-Q growth every quarter since listing which is a testament to its business resiliency and management’s ability to navigate external challenges arising from a rising rate cycle, regulatory challenges and state-specific issues. 

 

However, the company’s reliance on a front-end team for sourcing and collections, and lower-than-estimated AUM growth are among the key risks, as per ICICI Securities.