home first finance fund raise: Home First Finance to raise $75 million from US Development Finance Corporation

Kolkata: Home First Finance Company India is looking to raise $75 million in its maiden external commercial borrowing from the US Development Finance Corporation (DFC) as the mortgage lender aims to grow business by 30% in FY25.

The company is in the final leg of getting all the regulatory approvals from the US for the fundraise.

“An agreement is likely to happen soon and the drawdown is expected in the second quarter,” Home First Finance managing director Manoj Viswanathan told ET in an interview.

The pricing for the 10-year loan from DFC is in line with our current cost of funds, he said.

The lender’s marginal cost of borrowing for the funds raised during the quarter to March 31, 2024 was 8.7%. The average cost of borrowing for FY24 was 8.2%, up 80 basis points year-on-year.”This (raising ECB) is aimed at diversifying our source of borrowing,” Viswanathan said. The company will get the fund from DFC in two to three phases.DFC could not be immediately contacted for comments.Home First Finance’s total borrowings including debt securities were at Rs 7,302 crore as on March 31 while it had a liquidity of Rs 2,055 crore.

The lender with Rs 9,698 crore assets under management at the end of March aims to grow it by 30% in FY25. It is planning to expand its distribution network by adding another 20-25 branches this fiscal, to raise the tally from 133, and grow its manpower by 40% in FY25 over 1,250 as of end of March.

“We continue to build distribution by simultaneously entering new markets and deepening our presence in existing markets. Uttar Pradesh, Madhya Pradesh and Rajasthan are emerging as large affordable housing markets and we have taken steps to strengthen our presence and expand distribution in these states,” Viswanathan had said after announcing the quarterly earnings Thursday.

Home First Finance is an affordable housing finance company that targets first time home buyers in low- and middle-income groups. It primarily offers loans for the purchase or construction of dwelling units. About 86% of its portfolio comprises home loans with an average ticket size of Rs 11.5 lakh.