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Warburg Pincus picks up 5% more in IPO-bound Home First Finance
Photo Credit: VCCircle

US-based private equity firm Warburg Pincus has picked up an additional 5.03% stake in Home First Finance Company India Ltd, reportedly looking to float soon.

In a statement, affordable housing-focused Home First said Warburg Pincus’s Orange Clove Investments B.V. has picked up this stake from existing shareholders. It did not disclose the financial details of the transaction.

Warburg Pincus now holds 30.62% of the paid-up equity share capital of the company. 

The PE firm first bet on the firm in October last year, when it invested Rs 700 crore ($95.38 million) through a combination of a primary capital infusion and a purchase from some existing shareholders.

According to an addendum to the draft red herring prospectus (DRHP) filed by Home First with regulators, that transaction gave Orange Clove Investments a little more than 25.6% stake in the company.

Going by VCCEdge, sellers in that transaction included Bessemer Venture Partners and True North. The latter owned three-fourths of the company as of November 2019, when Home First filed for an initial public offering (IPO).

True North had planned to make a partial exit in the IPO, which received regulatory approval in March last year. 

Per the DRHP, the IPO will comprise a fresh issue of up to Rs 400 crore and an offer for sale by existing investors worth up to Rs 1,100 crore.

Home First says it is a technology-driven lender that provides loans to customers from low and middle-income groups. The company says it has sanctioned financing to over 50,000 customers across 11 states in the last 10 years.

The firm has consistently improved its top and bottom-line figures over the past few years, per data with VCCEdge. For example, it reported net sales of Rs 398.66 crore for the 2019-20 financial year, a 53.34% jump from the previous fiscal. 

Similarly, it reported net profit of Rs 79.55 crore for the same period, an increase of nearly 74%.

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