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Home First Finance Company India Ltd Management Discussions

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Home First Finance Company India Ltd Share Price Management Discussions

Like every year, the following section will give you an overview of the relevant drivers of the Housing Finance sector that HomeFirst operates in. We have structured in the following manner for your better understanding:

• Resilience of the Indian Economy - Growth despite major disruptions

• Strong FY24 performance & Strong GDP Growth Outlook amongst peers

• Industrial Momentum Continues, GFCF at highest levels

• Export Drives Vibrancy in Our Core Markets

• Large Opportunity in Indias Housing Finance o Rise of Middle Class & Increasing Discretionary Consumption o Strong Correlation of Per Capita Income with Mortgage to GDP % o Focus on new emerging states as growth drivers for next decade

• Banks focus on large ticket size, less intensive operationally & with cross-sell potential

• Amidst regulatory tightening, secured products like Housing Finance are a preferred segment

• Tech adoption - India is making irreversible & non-linear changes

• Conclusion

HomeFirst has multiple drivers for growth over the next decade. We have highlighted here a comprehensive list of drivers comprising macro drivers, industry drivers, government initiatives and conductive regulatory framework.

Exhibit: Housing Loan Growth Drivers

Housing Loan Growth Drivers for HomeFirst	Improved affordability
	Only 3.0% price rise CAGR
	between Dec18 & Dec23
Resilient Indian Economy	Source: RBI
Economy has weathered major disruptions (GST, Demon, IL&FS, etc).	IndiaStack - a boon to tech led HF players
Highest GDP growth expected amongst large economies.	Industry leading turnaround time - helps create brand
Fiscally prudent macro finances, Leading to lower interest rates in future.
Regulatory compliance strengthening risk management & further strengthening compliant corporates like HomeFirst	Focused presence on large addressable markets
	Industry leading metrics on productivity & Market Share

Housing Loan Growth Drivers

Resilience of the Indian Economy - Growth despite major disruptions

Indian economy has been resilient over the past many decades due to its structural composition supported by various sectors. Services Sector & Domestic Consumption strength has helped Indian economy tide away large disruptions. Indian economy has not witnessed negative growth since 1990s (except Covid-19) and the average decadal growth rate has witnessed increasing trend of around 7% in 2020s decade.

Exhibit: Resilience In India Economy, represented by Increasing decadal GDP Growth Rate. India is a key driver of global GDP growth engine in current times and for decades to come.

Strong FY24 performance & Strong GDP Growth Outlook amongst peers.

According to the latest IMFs World Economic Outlook (April24), world economy is projected to grow by ~3.2% CAGR in the near future, similar to growth observed in in 2023. However, India, which is the fifth largest economy is projected to fare much better than peers with the highest growth rate amongst large economies. It is estimated to grow at ~6.5% CAGR till 2029. Two sectors of the Indian Economy i.e. Services & Industry are expected to grow by 7.9% & 9.0% respectively in FY24 as per RBI. With government initiatives like PLI, improving "Ease of Doing Business" and China +1 factor, these sectors are expected to continue to grow at high growth rates raising economic output, creating more jobs and driving per capita income of the country higher. HomeFirsts business growth is correlated with Indian economys vibrancy creating more locations as housing ecosystem for your company.

Exhibit: Indian Economy contribution by 3 major sectors. Services continue to grow, followed by the industry where the government has a strong focus. Note that the segmental growth numbers are in Gross Value Added (GVA). Sector-wise growth of Indian Economy

GVA Composition of Indian Economy (in%)

Source: MOSPI (FY24 is provisional estimate)

India is expected to be the third largest economy by 2027 (crossing GDP of $5 Tn) after USA and China moving up from its current 5th position

Exhibit: GDP of major economies ($ Bn in Current Prices).

Rank

2016

2017

2018

2019

2020

2021

2022

2023

2024P

2025P

2026P

2027P

2028P

USA

China

Germany

Japan

India

Japan

Germany

India

Japan

India

Germany

France

India

France

India

France

India

France

Italy

Canada

Italy

Russia

Source: IMF World Economic Outlook, Jan24

Industrial Momentum Continues

Over medium to long term, Indian economy is likely to get further strengthened from capex led by government infra and PLI Scheme. The charts below highlights booming economic activity in India.

GFCF as % of GDP at a new high Strong Momentum

Indias current GFCF at ~$1Tn is comparable to Chinas GFCF in 2002. China delivered sharp growth in GFCF investments post that. Considering conducive fiscal policies, China + 1 momentum and prevailing cyclical revival, India is expected to be on its way to mark a similar capex growth pattern in the next few decades as observed in China.

Exhibit: GFCF Trend over past decade Indias current situation is all set to drive GFCF and drive economic growth.

If we look at Indias GFCF to GDP ratio, it has hovered around the 30% of GDP mark for the last 5-7 years (see exhibit below) and it has reached the highest level of 35%+ in Q2FY24. India is amongst the very few countries in the world that is now investing large sums in fixed capital in Infrastructure & industries. Whilst government capex has grown at a 14% CAGR in nominal terms over FY19-23, growth in private sector capex has been relatively modest, growing at 7% CAGR in nominal terms over the same period. We expect the private sector capex to pick-up pace over the next decade on the back of favorable fiscal policies like PLI, China + 1, etc.

Export Drives Vibrancy in Our Core Markets

In FY24, India is expected to deliver merchandise exports of $ 435 Bn, a minor dip of 3% despite the uncertain global macro. Services export is maintaining its momentum and is expected to cross $ 340 Bn in FY24.

India exports a key driver for economic momentum continuation

As per CII, India is poised to target $1 Tn of merchandise exports and a similar level for services exports by 2030.

Home Firsts 6 focused states have higher concentration in Total Export Mix of India (Average of 68% during FY20-8MFY24). By adding the 3 emerging states of Uttar Pradesh, Madhya Pradesh & Rajasthan, this number moves higherto 77%. Presence in high export states have helped us to scale business on the back of vibrant economies created by export industries eventually supporting housing ecosystem.

Exhibit: Exports of 6 specific focused states + 3 Emerging States contribute 4/5^th of India exports.

Overall Exports from 9 states is 18.4 Tn, contributing 80% of Indias Exports in 8 months of FY24

Large Opportunity in Indias Housing Finance vis-a-vis large peers

Because of the small base, mortgage to GDP Ratio in India is rising and is expected to rise.

Highly Industrialised / Urbanised centers have high mortgage to GDP ratio and we believe it will continue as housing ecosystems are developed around these centers. Also, reforms in other states will propel the housing ecosystem driving mortgage penetration.

Rise of Middle Class & Increasing Discretionary Consumption

The growing Indian economy will lead to a rising middle class population and provide a secular opportunity for Housing Finance. In the chart below, we highlight the target segment for HomeFirst i.e. Lower-Mid category plus a section of Upper-Mid category. These segments are seeing the largest addition of households.

Exhibit: With increasing share of middle-class households, the pyramid structure today will turn in to a diamond in 2030 and drive affordable housing segment growth.

Household income per annum classification as per report: Low < $4k(< 3 lakhs), Lower-middle-$8k (< 6 lakhs), Upper-middle -$40k (<30 lakhs), High:>$40k (>30 lakhs). Household Income per annum at FY18 prices.

As per Macquarie, the share of Indias discretionary spending will increase from 21% in 2022 to 39% in 2030. More households & higher discretionary spends is a perfect setup for housing sector growth.

Exhibit: India Household Consumption: Discretionary vs Essential

As per the FY23 Household Consumption Expenditure Survey (HCES) released by the Ministry of Statistics and Program Implementation (MoSPI), we observe that for the first time Rural Indias non-food spends has crossed 50%. This characteristic change of consumption in rural areas has also been due to the rapid urbanisation in the country.

Exhibit: Food & Non-food spend mix of Rural & Urban India consumers. Non-food crossed food spends for the first time amongst Rural consumers highlighting rising affluence of this segment of consumers.

Share of the Wallet in Rural & Urban India

% composition of monthly per capita expenditure

Strong Correlation of Per Capita Income with Mortgage to GDP %

Household consumption patterns change with levels of income. Rising per capita income is a key driver for increasing discretionary spending in microeconomic theory. While food accounts for a greater proportion of the consumption basket at low-income levels, rising incomes make consumers accommodate other items in their consumption. Once an economy reaches middle-income level on Per Capita level, expenditure on discretionary items grows faster than per capita income when per capita income is higher than $7,000 (PPP). It is also this level of per capita income that the need for housing is strongest as the ability of payment of EMI becomes strong. India appears to be at the start of this inflection point for many under-penetrated states which are also our next set of focused states. This makes us expect a sharp rise in demand for housing finance in coming decade and a leading indicator for increasing mortgage penetration as it happened in other countries.

GDP Per Capita comparison (2023) in $ PPP at constant prices

Indias GDP Per Capita though lower than its peers, expected to show high CAGR

Mortgage to GDP ratio in the USA from 1946 to 2000 has seen direct correlation with Per Capita Income. In 1946, per capita income in the USA was at similar levels as where India is now (~$2000 non-PPP adjusted). As incomes rose from $2000 to $5000 (between 1946 to 1973), mortgage penetration has increased from 12% to 30%. If adjusted for PPP, India is at similar levels to where the USA was in 1973. Incomes in the USA have increased from $6000 to $35,000 over 1973 to 2000 and mortgage to GDP has moved from 35% to 52% in the same period.

Increasing per capita income helped increase mortgage penetration in USA

Indian states represent similar traits. Maharashtra, Telangana, Karnataka, Gujarat, Kerala, Haryana, etc. has high Per Capita Income and also have high mortgage penetration. As a strategy, we target these markets as it helps us to scale faster. Our focus states are Maharashtra, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh & Telangana. We believe the states of Uttar Pradesh, Madhya Pradesh and Rajasthan are emerging large markets for HomeFirst and we intend to increase our presence in these 3 states besides 6 focused states.

Focus states + Emerging States represents 80% of our Total Addressable Market (TAM)

Focus on new emerging states as growth drivers for next decade

As a strategy, HomeFirst has had large business presence in Industry focused states. Due to Industrialization, the per capita income of the state is usually higher than other states. Such dynamics helps create housing ecosystem that we look forward to build our presence and has helped us emerge as a large player in our focus states. As you can see below, emerging states have dual drivers for growth: increasing per capita income and large population

Per Capita Income of Key states of HomeFirst presence vis-a-vis population for opportunity

Let us share our views with datapoints on why we are so positive on Uttar Pradesh. We believe that Uttar Pradesh (UP) is now at an inflection point. With increasing industrialisation, improving law & order situation (now stands at #2 in Ease of Doing Business in India, ranking by Govt of Indias "Department for Promotion of Industry and Internal Trade"), UP state is expected to deliver high growth going forward & contribute to Indias growth. Maharashtra & UP are the only 2 states which are expected to have more than $500 Bn GDP by FY28. Mega Infra projects in the state of Uttar Pradesh are Noida International Airport, Ganga Expressway, Noida Film City, Delhi-Meerut RRTS, Metro Rail in various cities, Delhi-Varanasi High-Speed Train, etc. Its Per Capita Income of $4093 (PPP adjusted) as on FY23 is close to the levels seen in Gujarat ($4300 PPP adjusted) in the year FY12. As the income move north of $7000 (PPP adjusted), we believe the discretionary spends takes center-stage for customers and housing becomes an important element in the overall scheme of things. The whole housing ecosystem develops as urbanisation & industrialisation leads to higher property liquidity & volumes in the market. Hence, UP is expected to be a large contributor to HomeFirst in the near future. The AUM of UP for HomeFirst increased from 268 Crs in Mar23 to 414 Crs in Mar24, growth of 55%.

Consistent High Government capex to propel GDP growth of the state

Tamil Nadu continues its growth momentum will continue to be a substantial state for HomeFirst

Tamil Nadu is a powerhouse in Indias economic landscape, known for its resilience and has been a frontrunner in industrialization in the country. Tamil Nadus industrialization has been characterized by a diverse range of industries (Auto, Capital Goods & Engineering, Electronics & IT, Textiles, etc). With supportive infrastructure development, it makes one of the leading states for industrial growth in India. As per Knight Frank, by FY48, when India attains its centenary of independence, Tamil Nadus GSDP is likely to expand to $2.6 Tn and a key contributor to Indias overall economy. These characteristics is what, we believe, makes perfect landscape for HomeFirst. Tamil Nadu currently forms about 15% of our AUM. AUM CAGR has been 43% for the past 3 years.

Exhibit: RBIs Sector-wise lending status also shows that credit to "Industrys" has grown the most in the emerging states in past ~4 years ( Crs)

Period	31-Mar-20	30-Sep-23	CAGR
Maharashtra	9,65,559	10,14,350	1.4%
Delhi	6,83,612	6,67,419	-0.7%
Gujarat	2,29,363	2,85,286	6.4%
Tamil Nadu	2,54,468	2,85,039	3.3%
Karnakata	1,66,403	2,00,277	5.4%
Telangana	1,74,090	1,92,931	3.0%
Uttar Pradesh	80,641	1,43,933	18.0%
Haryana	66,141	1,27,640	20.7%
Rajasthan	57,185	94,668	15.5%
Andhra Pradesh	72,723	89,641	6.2%
Madhya Pradesh	48,420	71,027	11.6%
Chhattisgarh	25,180	41,855	15.6%
Jharkhand	11,140	18,592	15.8%
Uttarakhand	11,851	14,961	6.9%
Himachal Pradesh	4,510	7,112	13.9%
Other States	3,63,149	4,19,244	4.2%
Grand Total	32,14,436	36,73,976	3.9%

Source:RBI

We also see a strong correlation of Per Capita Income with HomeFirsts business growth over the year.

Banks focus on large ticket size, less intensive operationally & with cross-sell potential

In this section, we try to highlight a question that we get from investors i.e. competition from banks. Affordable Housing remains a focused segment with high operational intensity and companies with mono-product focus can deliver better outcomes in the long run. To support the argument, we retrieve data from RBIs repository on ticket-size wise housing finance by banks. It is observed that banks are focused on high ticket size loans which is evident from the rising share of higher than 25 Lakh ticket size loans and vice versa. These large ticket size customers also provide huge cross-sell opportunity to generate other income for the banks. This creates a huge opportunity for non-bank players focusing on less than 25 Lakh ticket size.

HomeFirst is focused on this segment and adds value to customers who are not being addressed by banks.

Amidst regulatory tightening, secured products like Housing Finance are a preferred segment

RBIs sharp focus on strengthening the regulatory framework covering both Banks as well as NBFCs/HFCs augers well for the financial sector. RBI Governor mentioned that financial stability "is a public good that RBI has achieved with great efforts, and it intends to preserve and strengthen the same. Consequently, Compliance is taking the center-stage with 4x increase in RBI penalties on regulated entities (FY20-23) as per a research report. After DHFL crisis, RBI has not only strengthened the regulations for NBFCs (through scale-based regulations), but has also improved its oversight of their business and processes to ensure compliance in letter and in-spirit. Recent times has increased the risk of a potential credit event due to rise in non-mortgage household credit which rose to 8% as of March-2023 from 5.5% in March-2020 (Source: RBI). RBI has expressed discomfort on this number increasing. This poses the risk of over-leveraging and subsequent defaults in case of an economic downturn and RBIs recent actions are clear sign that the regulator wants to advocate disciplined growth in these segments. More specifically for Housing Finance Companies, regulations extending to non-housing products will ensure increased prudence as well as stronger capital buffers as HFCs continues to play pivotal role in credit outreach and hence regulators as well as governments focus and commitment reflects the same. We believe that regulatory environment for Housing Finance Companies will continue to be supportive given the distinct Government thrust for the sector and role that it plays in nation building. HomeFirst is well placed to benefit from stronger operating environment in the future.

Tech adoption - India is making irreversible & non-linear changes

India is innovating a different growth model. A tech led model that is collaborative, equitable and democratizes opportunity at population scale i.e. IndiaStack which aims to drive efficiency & productivity gains and drive long term economy growth. HomeFirsts tech journey was supported by IndiaStack. IndiaStack has digitally transformed the Indian economy and we as first mover took advantage of it right from sourcing documents, collecting customer KYC documents, collecting bank statements, payment collections, etc. HomeFirst is now being admired* for its tech prowess which has led us to industry leading Turnaround Time (TAT) of 48 hours. HomeFirst believes that Digitalisation of Indian economy has more legs to go and we will further improve the experience for our stakeholders.

Exhibit: The Components of Digital India layers

India Stack	Purpose	Components and Timeline						Progress
								1.4 billion Aadhaar enrolments
Identity Layer	Unique digital ID for every India resident	Aadhaar		eKYC		eSign		100 billion Aadhaar based authentications
								17 billion eKYC transactions
								350 million transactions per day
Payments Layer		IMPS		AePS		UPI		570 banks live on UPI ecosystem
								50% value share of all retail payments
								275 million DigiLocker users
Data Empowerment	Enable secure data sharing			DigiLocker		AA		64 million Account Aggregator linked users
		2009	2011	2013	2015	2017	2019

Source: indiastock.org, Macquorie Research, January2024

Source: indiastack.org

HomeFirst has always benefited from new industry level tech initiatives to facilitate processes & improve productivity. In that regard, launch of UPI Ecosystem and Account Aggregator ecosystem has been very beneficial for HomeFirst.

UPI continues to take market share in volume & value from other payment modes available. It grew by 56.6% on volume basis & 43.6% on value basis in FY24 over FY23. UPI mode of payment has facilitated HomeFirsts collection process at lower cost vs traditional methods. Account Aggregator ecosystem is also gaining acceptance as observed in the Accounts Linked and Consents Requests received. In Q4FY24, HomeFirst has processed 47% of applications via Account Aggregator and we expect this number to increase going forward.

	Volume (Mn)			Value (?Bn)
Particulars	FY23	FY24	Var %	FY23	FY24	Var %
UPI	83,751	1,31,165	56.6%	1,39,207	1,99,867	43.6%
Other Modes	22,455	23,737	5.7%	1,83,160	1,98,709	8.5%
Total	1,06,206	1,54,902	45.9%	3,22,367	3,98,576	23.6%
Share
UPI	78.9%	84.7%	+582bps	43.2%	50.1%	+696bps
Other Modes	21.1%	15.3%	-582bps	56.8%	49.9%	-696bps
Total	100.0%	100.0%		100.0%	100.0%

Source: NPCI

In summary, this combination of collaborative innovation and robust regulatory push will continue to drive growth and cutting-edge innovation for digital payments and place India in an advantageous position and HomeFirst will be amongst the first to implement any such initiative to improve productivity in its processes.

IndiaStack in Charts - Digital Public Infrastructure driving new business opportunities, efficiency & productivity

Conclusion

We believe that there are various factors at play for the growth of the housing sector and its finance through mortgage. India will have highest GDP growth amongst large nations and this is expected to sustain from structurally strong policy reforms. Globally, Per Capita Income growth has led to higher mortgage penetration and India will witness the same over the next few decades. As per credit bureau, there is demand of 2mn+ units in a year for housing finance & ticket size between 5-25 Lakhs. Assuming 11.3 Lakh (with inflation of 5% p.a) as average ticket size, there is an opportunity for housing finance of $ 355 Bn over next 10 years for our target customer segment. As per credit bureau, the overall affordable housing outstanding credit grew at mid-teen CAGR over the past decade and expected to grow in similar range over the next decade. HomeFirst is rightly placed to benefit from the many drivers and we are working on our mission of being the Fastest Provider of Home Finance for the Aspiring Middle Class, delivered with Ease and Transparency.

During FY24, HomeFirst continued scaling up and maintained its growth momentum with an increase of 34.7% in AUM over FY23. Further, we registered a growth of 31.5% y-o-y in annual disbursements. This growth stemmed from targeted distribution in key markets, robust liquidity, effective risk management practices, and enhanced technological integration throughout the processes. This focus has translated into a best-in-class return on assets of 3.8% (Mar23: 3.9%) and a return on equity of 15.5% (Mar23:13.5%). Gross Stage 3 (GNPA) stands at 1.7% vs 1.6% in Mar23. Net profit grew by 33.9% to 306 Crs.

Let us examine the building blocks of our growth story for the fiscal year ending 2024.

Assets Under Management

Our AUM increased from 7,198 Crs as of Mar23 to 9,698 Crs as of Mar24 - a y-o-y growth of 34.7%. This shows our ability to meet customers demands and improve our market share across our focus markets.

We are dedicated to expanding our presence across India and minimising concentration risk. We started with a presence in 119 districts at the beginning of the year and have grown our reach to 131 districts at the end of the scal year 2024. Our core states remain Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka. These 6 states comprise ~60% of the total affordable housing finance market in the country. HomeFirst has shown growth in these states over the years (see table below). Our contiguous expansion in these markets is facilitating us to reach our long-term target of 10% market share in each of these markets. As highlighted in MD&A Macro section, we are also increasing our footprint in the emerging states of Uttar Pradesh, Madhya Pradesh, and Rajasthan which we believe could emerge as growth drivers for the company.

AUM in States ( Crs)	FY17	FY20	FY24	CAGR (FY17-FY24)
Gujarat	280	1,438	3,028	41%
Maharashtra	310	785	1,291	23%
Tamil Nadu	80	360	1,355	50%
Telangana	9	176	861	92%
Andhra Pradesh*	-	47	470	77%
Karnataka	76	325	662	36%
Madhya Pradesh	13	141	602	74%
Uttar Pradesh & Uttarakhand	19	96	588	64%
Rajasthan	25	179	576	56%

*CAGR for Andhra Pradesh is from FY20 - FY24

Geographic Presence

At the end of the financial year, our presence was established across 131 districts with 133 branches and 321 touchpoints across 13 states/UT.

The Top 200 districts comprise 82% of the total affordable housing finance market in India (ticket size 5L-25L). HomeFirst is present in 98 of these 200 districts. Our current strategy is to increase our presence to 500 touchpoints in the next 3 years while expanding ~20 branches annually. Our expansion strategy focuses on presence in large affordable housing markets across tiers. The distribution is granular and branches / touchpoint expansion is done in a calibrated manner - ensuring market share growth as well as asset quality, productivity and optimized operating costs. Our strategy of contiguous expansion across regions has been based on evaluating areas with high economic growth and substantial demand for affordable housing finance, as well as industry portfolio-at-risk and socio-economic risk pro les.

For our presence across India, please refer to Geographic Presence on pg no 11.

Disbursements

The Company disbursed 3,963 Crs in FY24 as compared to 3,013 Crs in FY23, registering a growth of 31.5%. HomeFirst has consistently witnessed a rise in the monthly disbursements, accompanied by an expanding borrower base and a healthy loan portfolio. This achievement is attributable to our well-planned branch network expansion, the launch of innovative financial products, and the implementation of state-of-the-art technology to optimize operations and enhance customer satisfaction.

Product Metrics

We continue to focus on all pro les of customers across the home loan journey through a range of products. We have a deep and wide presence in the heart of affordable housing finance segment aka Self-construction, we also continue to expand our builder led individual home loans as well as home resale. We continue to carefully monitor our risk pro le and continue to have low under-construction property exposure. Our to date LTV at the time of Origination stands at 55.6%.

Credit Underwriting Process

We have a data science-backed centralised underwriting with an in-depth understanding of local property markets. We have set up a robust credit approval process comprising the following stages:

Data Science Backed Centralised Credit Approval & Disbursement Process

Initial Screening and Pre- Sanction Check	- Sourcing partners on-boarded after detailed due-diligence.
	- Digital validation of leads through third-party databases for KYC. Filtering out low credit bureau score customers.
	- Extensive workspace, property & residence verification with photo & video uploaded on cloud.
Customer Credit Underwriting	- Data science based centralised underwriting.
	- Integrated CRM & Loan Management System on cloud-based platform.
	- API integration with third party independent sources and usage of account aggregator to help in triangulation of income and proofs submitted during verification and validation done from a single dashboard.
	- Proprietary Machine learning & customer scoring models used for credit decision.
Property Underwriting & disbursement process	- In-depth understanding of operating geographies and property types.
	- Legal and technical assessment through third party vendors & internal team.
	- Proprietary ML backed property price predictor & geo-tagging of all properties.
Loan Collection and Monitoring	- No separate collection team. Same RM responsible for collection, acts as positive feedback loop.
	- Focus on early delinquencies via bounce prediction model. Automated calling & SMS reminders about dues.
	- Tracking installment collection status on real time basis.
	- Payment via Card, UPI, Net banking channels using the Customer App.

Asset Quality: Healthy Leading Indicators

Bounce rates are range-bound and are currently around 15%. Bounce rates continue to be aligned with the movements in overall industry level bounce rates validated periodically with the NPCI data. Our focus on containing early delinquencies as a collection strategy continues to be fundamental to drive robust asset quality.

We continued our relentless focus on early bucket collections. Also, we have provided the feature to our customers to make the payments via the app as well as through remote payment links. This has made the process of making payments much easier for our customers and is reflected in the strength of our collection. Our GNPA % at 1.7% in Mar24 is stable. Our Stage-3 Provision Coverage Ratio stands at 50.9% (75.7% pre-RBI circular) as on Mar24 compared to 59.5% (104.8 % pre-RBI circular) as on Mar23.

Our Financial Performance:

Particulars ( Crs)	FY24	FY23	YoY%
Interest Income on term loans	969.61	682.50	42.1%
Net gain on DA	63.11	38.04	65.9%
Non-interest income	123.82	75.06	65.0%
Total Income	1,156.54	795.60	45.4%
Interest on borrowings and commercial papers	498.66	303.26	64.4%
Net Interest Income	470.95	379.24	24.2%
Net Total Income	657.88	492.34	33.6%
Operating Expenses	232.49	175.60	32.4%
Credit Cost	25.43	21.52	18.2%
Pro t before tax	399.96	295.22	35.5%
Tax expense	94.24	66.93	40.8%
Pro t after tax	305.72	228.29	33.9%
Basic EPS	34.65	26.01
Diluted EPS	33.67	25.20

Key Financial Ratios

Particulars ( Crs)	FY24	FY23	Variance
Pro t after tax on average total assets (ROA)	3.8%	3.9%	- 10 bps
Leverage (Average total assets/average Equity or average Net-worth)	4.1	3.5
Pro t after tax on average equity or average Net-worth (ROE)	15.5%	13.5%	+200 bps
Cost to Income Ratio (Operating Expenses / Net Total Income)	35.3%	35.7%	- 40 bps
Operating Expenses / Average total assets	2.9%	3.0%
Average Debt to average equity ratio	3.1	2.4

Pro t After Tax

Our Pro t After Tax increased by 33.9% to 306 Crs in FY24 from 228 Crs in FY23. Consequently, Our RoE has crossed the critical threshold of 15% in FY24 to 15.5% from 13.5% in FY23. This has been possible due to the healthy growth of the portfolio book coupled with operating leverage and control of credit cost.

Spread on Loans

Our Spreads during the year is 5.5% (excluding co-lending) despite the increase in the cost of borrowing on the back of policy rates increases and MCLRs increase across all banks. We increased the yields by 0.75% in FY23 and 0.50% in FY24 (in Apr23); taking the total increase to 1.25%. Our ability to contain the COB increase only by 80bps despite the sharp increase in deposit rates from banks and MCLR rates. This reflects the companys ability to run a tightly controlled liability franchise at scale with increasing diversification.

Resource Mobilisation Shareholders Funds

Our Shareholders Funds as of Mar24 stood at 2,121 Crs. The increase was primarily due to increase in retained earnings.

Particulars	in Crs
Opening Equity as on Mar23	1,817.34
Add: Shares issued during the year represents increase on account of face value for the shares allotted pursuant to ESOPs exercised	0.10
Add: Increase in securities premium on account of premium received on allotment of shares	6.13
Add: Statutory Reserve transfer for the period	61.5
Add: Increase in retained earnings (net o transfer to statutory reserve)	221.63
Add: Option valuation linked credit	15.02
Add: Other Comprehensive Income	-0.23
Closing Equity as on Mar24	2,121.49

ESOP allotment

During FY24, the company issued and allotted 4,99,400 equity shares pursuant to the exercise of stock options by eligible employees of the company under ESOP plans. Further during the year, 8,51,882 ESOPs were granted to the employees under the HomeFirst ESOP Scheme 2021.

Borrowings

As we increase the scale of our operations, we intend to diversify the sources of borrowings further across various pools of capital. Our performance will help us to improve our credit ratings and enable a reduction in our cost of borrowing.

The Borrowings of the company stood at 7,302.1 Crs as at Mar24 as against 4,813.5 Crs as at Mar23. During the year, funding to the tune of 4,448 Crs was raised. The Companys approach to managing liabilities is characterized by prudent diversification across 31 lending partnerships, underpinned by a strategic focus on securing long-term borrowing at competitive rates. During the year, we entered into relationships with 6 new lenders including distinguished institutions viz. Punjab National Bank, Indusind Bank, Bank of Baroda, UCO Bank, Punjab & Sind Bank & Bajaj Housing finance Limited.

During FY24, the Company has not issued any Commercial Paper or any Short-Term Instrument. Accordingly, the Companys Commercial Paper outstanding was NIL as at Mar24. As at the end of Mar24, we had a liquidity bu er of 2,054.8 Crs comprising of unencumbered cash and cash equivalent of 1,156.0 Crs and 648.8 Crs of unavailed sanctions from the banks and 250.0 Crs of unavailed sanctions from NHB. The Liquidity Coverage Ratio of the Company stood at 180% for the quarter ending Mar24.

We also have cumulative positive ALM gaps in all buckets. ALM framework is monitored in tandem with the Companys business strategy and risk management.

Our analysis of Strengths and weaknesses helps us identify and manage our business risks in a better manner.

STRENGTHS:

1. Strategic selection of markets, deeper and contiguous penetration in large affordable housing finance markets with omnichannel distribution strategy.

2. Best in class tech stack to enhance risk management, customer experience and operational efficiency.

3. Robust risk management framework coupled with strong collection process and culture.

4. Data science-backed underwriting.

WEAKNESSES:

1. Sensitive to changing interest rates and market conditions.

2. Limited brand recognition compared to banks.

OPPORTUNITIES:

1. Growing demand for affordable housing finance in India coupled with existing low mortgage penetration.

2. Demographic factors such as urbanisation, nuclearization and the increasing working population of India driving income growth.

3. Expansion into new geographies.

4. Government initiatives to boost affordable housing.

THREATS:

1. Competitive intensity from time to time.

2. Any adverse movement in the industry / macroeconomic environment.

3. Economic downturns and natural disasters affecting portfolio quality.

Risk Management

Risk Management at Home First is a continuous and dynamic process which includes identifying, assessing, measuring, and recommending mitigation plans/techniques for known risks.

The primary objective of risk management is to help business teams make informed decisions and take proactive measures to manage and mitigate the risks effectively to ensure financial sustainability. This includes,

(I) Ensuring regulatory compliance on risk management and prudential norms set by Regulators and by the Board.

(ii) Identifying the areas of risks involved in the business and suggest the method to measure/quantify the risks.

(iii) Evaluating current controls and suggest enhancements/risk mitigants, if required, for identified risks.

(iv) Monitoring the Risk Appetite thresholds approved by the board for the key risks.

(v) Envisaging emerging risk based on recent developments on the Regulatory and Economic front and evaluate the impact.

Home First is exposed to various risks that are an inherent part of any lending business. The major risks are Credit Risk, Market Risk, Liquidity Risk, Interest Rate and Operational Risk, including IT Risk. Alongside, some of the critical non- financial risks applicable are Reputation Risk, Compliance Risk, ESG Related Risk, Cybersecurity risk, etc. To enable efficient management of risk, an independent Risk Governance Structure, in line with regulations is in place. This is in the context of separation of duties and ensuring the independence of risk measurement, monitoring and control functions. The Risk management framework is enhanced in line with Regulatory guidelines/directives with a formal Risk Appetite Framework, Stress Test Scenarios, Early Warning Signals (EWS) and assessment of risks (those that are not captured/factored in the capital adequacy prescribed by the Regulator) under Internal Capital Adequacy Assessment Process (ICAAP).

The various risks across Home First are monitored and reviewed through the Management Level Committees and the Risk Management Committee (RMC). The RMC is a board level committee which meets regularly.

Corporate Governance Structure

Home First believes that sound corporate Governance is critical in enhancing and retaining stakeholders trust. It is a reflection of Home Firsts principles of fairness, responsibility and sustainability. Accordingly, Home First seeks to ensure that the performance is driven by integrity.

The Board exercises its fiduciary responsibilities in the widest sense and provides strategic guidance. The Board members are individuals with diverse backgrounds and expertise led by independent directors to provide objective oversight.

Corporate Governance Structure

	Board of Directors
Board Level Committee	Audit Committee	Nomination and Remuneration Committee	Stakeholder Relationship Committee	CSR and ESG Committee	Risk Management Committee	IT Strategy Committee	Compliance Function	Internal Audit Function
Management Committee	Credit Committee		Grievance Redressal Committee		Asset-liability Committee		Dedicated Chief Compliance Officer (CCO)	Independent function
	Risk Management Policy & Framework		Early Warning Signals (EWS) framework		Risk Appetite & thresholds		Nodal Officer for NHB	Risk Based Internal Audit
	Regulatory Capital		Risk Assessed in ICAAP		Stress Test		Focus on RBI/ NHB/SEBI compliance	Regular Branch Audit
			Market Risk	Strategic Risk
			CRM Risk	Cyber & info Risk	Credit Risk		Periodic Compliance Tracker	Annual HO Process Audit
			Reputation Risk	Credit Concentration	Liquidity Risk
Risk Management Framework	Credit Risk		HR Risk	Interest Rate Risk	Credit Concentration
			Operation Risk	Compliance Risk	Interest Rate Risk
			Liquidity Risk	ESG Risk
	Risk Assessment		Risk Control		Reporting
	Regulatory Approach		Mitigation / Risk Limits		Regulatory
	Credit/Property Criteria		Deviation approval matrix		Internal MIS
	Parameter tracking				Disclosures

Risk Management Framework

The Risk Management Committee reviews all the risks and policies at timely intervals to ensure they are in line with the growth of the Company. Further, the Board also monitors the risks and their mitigants through its sub-committees like ALCO, Risk Management Committee, and IT Strategy Committee. The Audit Committee observes how the management oversees compliance with the risk management policies and procedures. It also reviews the adequacy of the risk management framework concerning the risks faced by the Company from time to time.

Risk Appetite (RA)

The Risk Appetite is the aggregate level and type of risk an organisation is willing to assume to achieve its strategic objectives and business plan. It is decided in advance and within its risk capacity.

At Home First, the Risk Appetite framework incorporates limits for significant risks with monitoring parameters. Its a combination of quantitative and qualitative parameters, aligned with its business strategy. The board and senior management team review and assess the parameters to ensure it remains appropriate and aligned with its business objectives. The board-approved risk appetite thresholds are tracked by the Risk Management team and quarterly reported to the Risk Management Committee of the Board.

Early Warning Signals (EWS)

To identify potential NPAs/fraudulent accounts at a nascent stage, the company has developed the EWS framework. The framework evaluates and categorises the loans based on various parameters such as borrowers basic information, bureau, loan type, product type, characteristics of collateral and customers behavioural information.

Internal Capital Adequacy Assessment Process (ICAAP)

As per the RBI notification, Home First Finance Company India Limited is categorized in the Middle Layer and hence the company is required to have an Internal Capital Adequacy Assessment Process (ICAAP).

Accordingly, Home First has designed its ICAAP Policy and assessed applicable risks in ICAAP, as per internal methodology, which is proportionate to the scale and complexity of Home Firsts operations. The objective of ICAAP is to assess the Capital required to support material risks in the business and use better risk management techniques for monitoring and managing the risks. Material risks are those risks that have the potential to have a significant impact on Home Firsts business performance.

ICAAP document is a forward-looking document that incorporates key business aspects, such as

1) Risks that are not captured/factored in the capital adequacy prescribed by the Regulator,

2) Risk appetite and sensitivity/scenarios analysis and

3) Projected financials including capital position after considering critical business and macroeconomic success factors Home Firsts senior management team consisting of the MD & CEO, CFO, CBO, CHRO & CRO reviews the capital requirements and draws up appropriate plans to ensure that it maintains adequate capital. Though the submission of the ICAAP document to the regulator is an annual exercise, the process is a continuous one which requires constant monitoring and calibration of ICAAP outcome in light of new regulatory directives and market developments. The outcome of ICAAP is presented to the RMC before being put up to the Board for their approval. Post its approval by the Board, the ICAAP document is submitted to the regulator. The document is subject to independent review through an internal audit process. Last year the review was conducted by an independent third party.

Stress Test

During the year, Home First also initiated stress test covering severe but plausible adverse scenarios. The stress test policy document lists stress test shocks, frequency of stress test, tolerance, tentative mitigation plan and reporting framework for Credit Risk, Credit Concentration Risk, Liquidity Risk and Interest Rate Risk (IRR).

Risk & Crisis Management

Crisis management is the process of preparing for adverse events, minimizing their impact, and getting back on track as quickly as possible. It tests the agility of an organisation to respond to critical events, such as threats, or negative disruptions that could impact an organizations business process.

Crisis-like situations immediately impact business operations and in the medium to long run, they impact a companys business strategy and reputation.

At Home First, we prepare for such crisis,

At the Operational level

• Annual IT risk assessment and Regular IS Audit by an independent CERT-In empanelled auditor provides insight into the effectiveness of controls that are in place to ensure con de-ntiality, integrity and availability of Home Firsts IT infrastructure.

• IS Audit - vulnerability assessment of various aspects of IT framework which includes, Governance, Information Security, Cyber Security, Business Continuity Plan (BCP) and 3rd party support.

• Business Continuity Plan and Disaster recovery policy and pre-decided Recovery Time Objective (RTO) and Recovery Point Objective (RPO).

At the Business Strategy level

• Keeping a close eye on the domestic and global macro environment.

• Tracking new Regulatory directives/changes, and evaluating their impact on Home Firsts business and aligning action plan.

• Following customers/product behaviours and trends, in terms of their performance.

• Competitive analysis with Peers - Product, Customer Segment, Financial and Technological, as per data availability. At the Reputation Management level

• Support from a professional Public Relations Team.

• Monitoring print and social listening tool.

• Zero tolerance culture with respect to key aspects such as: Sexual Harassment & Discrimination at Workplace Compliance

• Grievance Redressal framework with Escalation matrix.

• Monitoring key risk parameters and identifying emerging risks.

• Board-level Stakeholder Relationship Committee.

Type of Risk	Description	Mitigation Measures
Credit Risk	The possibility of losses associated with a decrease in the credit quality of borrowers or counterparties. In a credit portfolio, losses stem from outright default due to the inability or unwillingness of a customer or counterparty to meet commitments about lending, trading, settlement and other financial transactions.	The Company has a Board approved Credit Policy in place which is prepared post considering inputs from Senior Management. This policy entails a set of credit procedures and guidelines for effective credit risk management and to ensure a healthy portfolio.
		• The Credit Committee reviews adherence to the policy and the credit portfolio performance metrics on a quarterly basis. This is presented to the Audit Committee of the Board and their inputs are also taken on record.
		• The credit policy is reviewed annually and amended periodically to ensure compliance with the guidelines of RBI, NHB as well as other regulatory bodies. The inputs received from the credit committee and audit committee are considered while reviewing and renewing the policy.
		Robust Processes
		• Credit Approval - Verification of information through independent third-party/ applications (to understand financial discipline and other credit risk dimensions).
		• Property Assessment - Support from Technical and Legal Expert to evaluate ownership rights on property.
		• Centralized approval and risk-based pricing.
		• Exposure limits on groups / sub groups, builder, Product & Property type.
		• Refining sourcing strategy based on portfolio performance and business opportunities.
		• Continuous training to existing credit officers and new recruits who form the first line of defence for the company.
		• Regular internal audits and reviews by the Audit Committee ensure that the credit policy is implemented effectively.
Market Risk	Risk of loss arising from movements in market prices or rates away from the rates or prices set out in a transaction or agreement.	• The Investment process is guided by a detailed investment policy. Investments of temporary surplus funds are done as per the policy principle which provides for strict controls in terms of tenure, product, rating, limits and authorization.
	Considering the nature and scope of business, Home Firsts primary objective of investments is liquidity management, through investments in liquid mutual funds, debt mutual funds, NCDs, CD/CPs, and fixed deposits with high-quality instruments.	• Regular assessment of all investments along with underlying portfolios is carried out and the investments are reported to ALCO every quarter.
Operational Risk	Risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.	• The Board approved Operational risk management policy enlists the processes and controls for monitoring people, systems and processes at various points of time.
		• We have a comprehensive system of internal controls, systems and procedures to monitor transactions, employee rotations, contingency planning, insurance cover, document storage and retrieval arrangements as well as maintenance of backup procedures to minimize operational risks.
		• In addition, we have appointed independent audit firms to conduct internal and process audits at all of our offices to assess the adequacy of and compliance with our internal controls, procedures and processes, as well as all applicable statutory and regulatory guidelines.
		• Reports of the internal auditors as well as the action taken on the matters reported upon are discussed and reviewed in the Audit Committee meetings.
Liquidity Risk & Interest Rate Risk	Liquidity risk is the inability of a financial institution to meet its obligations as they become due, without adversely affecting its financial condition.	• To manage the liquidity risk, we have a comprehensive Asset Liability Management Policy in place. The Policy provides for several risk management measures including short-term liquidity forecasts which are done to identify any short-term liquidity gaps and implement immediate actions to correct such gaps, diversifying our sources of funding to facilitate flexibility in meeting our funding requirements, and maintaining strong capital adequacy.
Type of Risk	Description	• The Company has adopted the stock approach to measure liquidity buffers along with quarterly reporting of critical ratios and threshold levels to ensure adequate liquidity planning. We have positive ALM flows across all buckets in line with prudent ALM practices.
		• Effective simulation method is also adopted to periodically stress test bucket- wise flows and changes in the Net Interest Income (NII) or Net Interest Margin (NIM) due to interest rate movements.
		• Quarterly monitoring of liquidity ratios including Liquidity Coverage Ratio (LCR).
		• Further, to strengthen internal controls, an audit process is in place to ensure implementation of the above-mentioned measures and is carried out effectively.
Compliance & Regulatory Risk	The risk of legal or regulatory sanctions, material financial loss, or loss to reputation as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and applicable codes of conduct.	• The Company has a robust framework, monitored by the senior management team to mitigate compliance and regulatory risk.
		• Monitoring through compliance tracker and reporting timelines.
		• Coordination and clear communication amongst departments in case of inter- dependencies.
		• The amendments by any of the regulators are monitored closely.
		• Further internal audit process assists in complying with all the existing laws and regulations.
Reputation Risk	Reputational risk can be defined as the risk arising from negative perception on the part of customers, counterparties, share-holders, investors, debt- holders, market analysts, other relevant parties or regulators that can adversely affect an entitys ability to maintain existing, or establish new, business relation- ships and continued access to sources of funding.	• HomeFirst has robust Governance framework as per applicable Regulations.
		• Tracking Reputation risk related parameters, including Digital & Social Media Monitoring.
		• Enhance compliance culture through training and awareness workshops.
		• Customer grievance redressal policy with robust redressal mechanism.
		• Communication with stakeholders through appropriate mechanisms to address their expectations and concerns.
		• Dedicated investor relations team and adherence to Regulatory disclosures.
Information Technology Risk, Cyber Security Risk and Information Security Risk	Information technology risk is the risk arising on account of inadequacies or failure of technical infrastructure or IT systems which can have an adverse impact on the availability, integrity, accessibility and security of the data and the IT infrastructure.	• HomeFirst has an IT Policy prepared as per NHB and RBI guidelines, which sets out processes and controls that are required to be maintained in relation to the IT systems. The IT Policy is amended regularly.
	Cyber Security Risk means the risk of cyber-attacks on Home Firsts systems through hacking, phishing, ransomware and other means, resulting in disruption of our services or theft or leak of sensitive internal data or customer information.	• Further we have an IT Strategy Committee of the Board. The main responsibility of this Committee is to assess the IT systems of the Company and gauge the vulnerability of the system to various risks and its mitigants.
	Information Security refers to protecting sensitive information and ensuring the use of information only by legitimate users with proper authorisation. The Risk of information getting compromised or being accessed without proper authorisation exposes the organisation to Information Security Risk.	• The Company has adequate codes/ policies to ensure that there is no breach in the privacy of the information of the customers.
		• End Point security software and Antivirus software in all laptops.
		• Robust access-control and log tracking for server security.
		• To ensure IT security, performance stability and flexibility, HomeFirst has a well- established IT infrastructure in place. The loan processing applications of the company are built on Salesforce.com which is a globally recognized platform with low downtime and low security risk.
		• Further, we conduct IT audit once every two years to determine issues and process level gaps, if any.
		• Training is provided to existing and new employees on IT policies, procedures and code of conduct.
Type of Risk Environment Social & Governance related risk	Description The risk related to environmental, social and Governance-related that may impact an entity in terms of its sustainability and may expose it to non- financial risk.	Mitigation Measures • HomeFirst understands the growing importance of ESG and has adopted a Board approved ESG Policy.
		• An ESG Execution Team with management team participation has been created to ensure implementation of the ESG Policy.
		• Negative list/exclusion for restricting funding to inappropriate property /development locations which may either lead to loss of life and/or deterioration in the quality of life in nearby habitats.

Direct Assignment

During FY24, we received a purchase consideration of 414 Crs from direct assignment and the corresponding assets were de-recognized in the books of the company. As on Mar24, the company has a Direct Assignment of 1,219.14 Crs in the total portfolio compared to 1,056.49 Crs as at Mar23.

Co-lending

We have existing co-lending relationships with Central Bank of India and Union Bank of India. During the scal year, we have executed transactions of an amount of 99.39 Crs with Union Bank and 114.29 Crs with Central Bank of India. We believe co-lending presents a unique opportunity through the combination of the banks availability of low-cost funds, coupled with an NBFCs (including HFCs) ability to source retail customers efficiently as well as manage these customers, including collections. We plan to scale up the co-lending transactions in the medium term.

Capital to Risk-Weighted Assets Ratios

The following table sets forth our capital to risk-weighted assets ratios for the periods indicated:

	Mar24	Mar23
CRAR (%)	39.48%	49.38%
CRAR - Tier I capital (%)	39.08%	48.89%
CRAR - Tier II capital (%)	0.40%	0.49%

Credit Ratings

During FY24, India Ratings & Research (Credit Rating Agency & a 100% owned subsidiary of the Fitch Group) has revised the Outlook on HomeFirst from "AA- Stable" to "AA- Positive".

As at Mar24, the following table sets forth our credit ratings:

Instrument	Rating Agency	Rating	Amount (in Crs)	Outlook
Term Loan	ICRA	AA-	4,500	Stable
	India Ratings	AA-	3,300	Positive
	CARE	AA-	514	Stable
Non-Convertible Debentures	ICRA	AA-	561	Stable
	India Ratings	AA-	400	Positive
Commercial Paper	ICRA	A1+	100	-
	India Ratings	A1+	100	-

The ratings validate the Companys healthy earnings pro le, substantial capitalisation, robust net worth base and gradual improvement in its scale of operations.

Human Resources

One of the most critical assets and foundations of our operations is human capital. We strive to create a conducive environment for the growth and development of our employees. Continuous training is provided to employees to uplift their skills and advance in their careers. We believe in empowering our employees through training, talent management and fast-tracking growth for high performers which helps in building a strong performance culture. Our culture is what sets us apart from the rest of the companies. More details on training, employee benefits, and employee engagement activities can be found in the Human Capital Chapter refer pg no 60.

As of Mar24, the employee strength stood at 1,249 as compared to 993 as on Mar23.

ESG

ESG is gaining wider traction the world over - sustainability in operations is becoming a prerequisite for functioning rather than a hygiene factor. HomeFirst has taken an early lead and has demonstrated transparency in its Governance with adequate disclosures, green initiatives, and digitalization of processes. Pursuant to the adoption of such measures and creating a thriving and vibrant workplace environment, HomeFirst has been assigned an ESG Score of 34 by S&P Global. Morningstars Sustainalytics continues to assign “Low Risk” rating on ESG Risk parameters with a score of 16.2, best amongst BFSI peers. This validation by large agencies highlights HomeFirsts focus on sustainability & superior corporate Governance. More details on ESG practices can be found in the Sustainability report starting from pg no 33.

Internal Control Systems and Internal Audit

The RBI had mandated the introduction of a Risk-Based Internal Audit for all deposit-taking housing finance companies with effect from June 30, 2022. Accordingly, HomeFirst has a Risk-Based Internal Audit Policy in place. The internal audit is performed as per the Annual Audit plan approved by the Audit Committee of the Board. HomeFirst has a Risk-based Internal Audit process covering branches and HO processes which is commensurate with the size and nature of its business. Observations and recommendations from the Internal Audit review are placed before the Audit Committee. Agreed actionable are monitored till closure and the status of the actionable are presented to the Audit Committee periodically.

The Company has an adequate internal Control System to ensure adherence to the companys policies and procedures, compliance with applicable laws and regulations, to ensure that management information and financial reporting are correct, reliable, and complete, to enable the detection and prevention of fraud and errors and to safeguard the company assets against loss from unauthorised use or disposition, amongst others. Further, the internal control system is commensurate with the size of the business as well as the industry in which the Company operates. The framework endorses ethical values, good corporate Governance, and risk management practices. The Company has appointed Internal Auditors to ensure compliance with the companys policies and procedures and compliance with applicable laws and regulations. The Audit Committee of the Board reviews the performance of the internal audit, the adequacy of the internal control systems and compliance with regulatory guidelines. The Audit Committee also provides necessary oversight, gives recommendations, and monitors the implementation of such recommendations.

Outlook

“HomeFirst is poised to capitalise on the long-term potential in housing finance on the back of various macro drivers and our solid foundation. Our commitment to risk management and a strong balance sheet further enhances our position. Technology remains a key component of our strategy, enabling us to streamline operations, optimise expenses, and enhance customer service through an efficient business model. As we strive to establish a reputable brand in the housing finance industry, we remain dedicated to becoming the “Fastest Provider of Home Finance for the Aspiring Middle Class, delivered with Ease and Transparency."

Cautionary Statement

This document contains statements about expected future events, and financial and operating results of the Company, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions, and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results, and events to differ materially from those expressed in the forward-looking statements.

The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements based on any subsequent developments.

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