Home First Finance Co. is aiming to achieve assets under management of Rs 20,000 crore by financial year 2027, according to Chief Executive Officer Manoj Viswanathan.
The housing finance company also aims an ambitious goal of achieving between Rs 35,000 crore and Rs 40,000 crore in AUM levels by fiscal 2030, depending on how the tailwinds are and how the economy is flowing, he told NDTV Profit in a conversation on Tuesday.
"We have set a target of Rs 20,000 crore of AUM by FY27. Next two years, we are looking at 25% to 30% AUM growth," the managing director said.
"This rate should be sustainable over the next three to five years. We have been growing between 30% and 35% in the last four years," he added.
In a reducing interest rate environment, he acknowledged that yields remain under pressure but expressed confidence in maintaining spreads. "Most players in the affordable housing segment aim to maintain a minimum spread of 5% to ensure profitability," he said.
Viswanathan clarified that return on equity was the preferred metric for tracking performance because of fluctuations in return on assets due to leverage changes. He expects the RoA to fluctuate between 3% and 4% according to leverage.
The company exited Q4 FY25 with a 17% RoE and aims to deliver an average RoE of 16% to 16.5% between capital raises. "Post-capital raise, ROE may dip to 13–14%, but it will climb back to 17% to 17.5% as leverage increases," he said.
When asked about what sets the company apart in the affordable housing space, he highlighted the share of individual housing loans in the balance sheet and the company's technology-driven approach.
"We have 85% of our loans devoted to individual housing loans, which is the highest share amongst the peers. Another factor is our devotion to technology.
"We are one of the early adopters of the Salesforce platform, centralised underwriting model, and AI/ML-based underwriting. Our operating expense-to-assets ratio is the lowest among the peers," he said.
The company's operating expense-to-assets ratio was 2.7% as of Q4 FY25. Home First Finance expects to further reduce operating expenses by 5–10 basis points every two years, potentially bringing the operating expense-to-assets ratio to 2.6% in a couple of years, according to Viswanathan.
However, he emphasised that the focus remains on growth rather than further cost optimisation as the cost structure is already lean.
Home First Finance recently raised Rs 1,250 crore in equity. Viswanathan said it would support growth without the need for further dilution until FY29. "It will take about four years to reach our leverage threshold of five times again," he said.
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