Home First Finance has grown its loan book at a blistering pace, but the growth has consumed far more cash than the business produces. Six straight years of deeply negative operating cash flow, a promoter who has nearly exited, and recurring control exceptions in the loan system sit alongside a clean audit record and only trivial regulatory fines.
Key findings
- Promoter shareholding collapsed from 28.82% to 6.99% in five years, and an independent director's re-appointment was defeated
Major- Promoter shareholding fell from 28.82% as at 31 March 2021 to 6.99% as at 31 March 2026, a decline of 21.83 percentage points, while the promoter pledge rose from zero to 28.57% in the last year alone. Orange Clove Investments B.V., a Warburg Pincus affiliate, sold its entire 10.64% holding on 11 August 2025. The special resolution to re-appoint Mr. Anuj Srivastava as Independent Director was defeated at the AGM on 25 June 2026, with 27.66% of votes cast against, driven by 32.69% dissent from public institutions. - Auditor rotated twice in five years with rising fees and a new joint-auditor mandate
Minor- The statutory auditor changed from Walker Chandiok & Co LLP (FY21) to Deloitte Haskins & Sells (FY22-FY24) to B S R & Co. LLP (FY25-FY26), with Batliboi & Purohit added as Joint Statutory Auditor from FY27. Total fees paid to statutory auditors and their network firms rose from ₹0.574 crore in FY23 to ₹0.633 crore in FY24. Total assets reached ₹15,166.5 crore as at 31 March 2026, crossing the RBI threshold of ₹15,000 crore and triggering a mandatory appointment of joint statutory auditors. - Revenue quality depends on upfront gain recognition from loan assignments and interest-strip receivables
Minor- In FY2024, the company derecognised assigned loans with a carrying amount of 1,056.49 crore and recorded a gain on derecognition of 289.27 crore. The company creates an excess interest strip receivable on assignment deals, crediting the statement of profit and loss by discounting the excess interest spread to present value under Ind AS 109, a practice disclosed consistently from FY2022 through FY2026. The company states its business model remains to hold assets for collecting contractual cash flows, despite executing assignment deals involving derecognition of loans in each year from FY2021 through FY2026.
What to watch
- Audit trail backup exception. The loan origination and loan management system backup was not kept on servers physically located in India on a daily basis from 1 April 2025 to 9 March 2026; the FY27 audit report will show whether this exception is resolved.
- Joint statutory auditor appointment. Batliboi & Purohit joins as Joint Statutory Auditor effective from FY27, with the first audit opinion expected for the year ending 31 March 2027.
- Independent Director vacancy. Mr. Anuj Srivastava vacates office on 31 October 2026; the Board will have four Independent Directors and one Executive Director, with no Nominee Directors remaining.
- CFO transition. Nutan Gaba Patwari resigns effective 31 August 2026; the successor appointment is yet to be announced.
Bottom line: This is a fast-growing affordable-housing lender whose loan book expansion consumes cash faster than it generates profit, a gap filled by repeated equity raises and rising debt. The record is audited without qualification and regulatory fines are negligible, but the near-complete exit of the original promoter, the defeat of an independent director's re-appointment by institutional votes, and two consecutive years of audit-trail exceptions on the loan system shift the burden of proof to governance and controls. Watch whether the FY27 audit report clears the loan-system exception, who succeeds the departing CFO, and how the reconstituted Board with no nominee directors steers the next phase of growth.