Home First is a mid sized relatively new NBFC catering to retail home loans to salaried class. Major concentration is in the states of Gujarat and Maharashtra but management is gradually scaling up in other states. Warburg Pincus is the largest shareholder and the quality of the loan book now is very good. After covid related disruptions we expect the company to scale up lending and that should drive net interest income and securitization revenues. Although scope for retail home loans is immense, it is a highly completive segment with Banks having an edge due to low cost of funds. Home First’s strategy to focus on loan origination and then securitizing these with banks is a sound strategy. We have a neutral weight rating given its valuation and risk return profile – 04-05-2021 Price: 510.04 Rating: Neutral Weight
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