Affordable housing lender Home First Finance is financing individual homes certified under new green-building standards it helped develop with the International Finance Corporation, to attract sustainability-focused capital.
The Mumbai-based company has onboarded more than 600 ESG-certified individual homes under the World Bank-backed programme, extending a green tag that has so far been applied mostly to apartments built by large developers.
"We have a green home programme running with IFC, where we have kind of pioneered the whole process of creating a new set of standards for individual houses. We have deployed that and onboarded more than 600 ESG-certified homes," said Manoj Viswanathan, HomeFirst's managing director and chief executive officer.“HomeFirst and IFC are closing a real gap," said Nikunj Dube, chief rating officer, CareEdge-ESG Ratings, adding that India's green building and certification conversation has for years been about apartments and developers, not the individually built home simply because there is no single project promoter to certify.
Home First holds a 'Low Risk' ESG rating of 13.6 from Morningstar's Sustainalytics and a score of 46 on S&P Global's ESG/CSA index, aided by disbursements that are more than 90% paperless and strong lending under the government's Pradhan Mantri Awas Yojana housing scheme. In June 2026, it was assigned a ‘strong’ ESG score of 69 by Crisil Ratings.
HomeFirst raised ₹280 crore from IFC through an up to 7-year debt in December 2022.
Viswanathan said the company aims to scale certified homes to around 10,000 before launching green bonds. It doesn't plan to add new institutional investors after the exit of private equity (PE) firm Warburg Pincus in August 2025, leaving HomeFirst promoter-less, with a shareholder base led by foreign and domestic institutions.
“PE funds, in any case, have a limited time frame and have to return funds to their shareholders. We have managed to do that with ease, and now it (Home First) will run as a publicly held company with an independent board,” Viswanathan said.
This initiative, combined with the lender’s focus on financial inclusion through funding affordable housing and strong disbursements under government schemes such as the Pradhan Mantri Awas Yojana (PMAY), has helped improve the company’s ESG rating.
The lender has sanctioned 38,507 loans under the PMAY (Urban) scheme, allowing for a subsidy benefit of ₹966 crore to customers, helping reduce total loan amounts by around 26%. It has given another 700 loans under the updated PMAY-U 2.0 scheme.
The hope is that the focus on sustainable lending will attract ESG-focused foreign capital and eventually allow the lender to raise cheaper capital through green bonds, according to Viswanathan. The company has established an ‘ESG Execution Team’ that has identified 12 areas for immediate focus as part of its ESG policy. The team is also developing measurement parameters and metrics for various ESG focus areas.
“If you look at our shareholding table, it gives you an indication. We have a lot of FIIs (foreign institutional investors) over there, and FIIs have modules inside where certain funds are allocated for green projects and companies that are strong on ESG,” he said, adding that the company has started seeing the benefit of that.
While it has currently funded around 600 ESG-certified homes, Viswanathan said that one of the objectives behind co-creating these standards with IFC is that, once the programme picks up steam, they could consider issuing green bonds, as such investments typically require a larger scale.
“We haven't seen any significant or additional premium that investors are willing to give just because of the ESG compliance. Having said that, it does attract many global firms for impact funding, particularly some Scandinavian pension and investment funds that look for sustainable projects. So it definitely encourages and widens the reach to more global investors,” said Soumyajit Niyogi, director – Core Analytical Group, India Ratings & Research.
Niyogi also believes that building sustainable homes does not significantly increase costs, especially in affordable housing, which caters to borrowers at the bottom of the pyramid, who are typically more socially sensitive and already follow many energy-saving and similar practices. “It adds to the purpose of the social impact investment, and if the lender or builder helps provide the basic know-how and technology that helps them reduce energy consumption, that model is doable. It could take time to scale, but it is doable,” he said.
As of June 2026, Home First Finance has two funds—True North Fund V and Aether (Mauritius) Ltd, listed as promoters, which collectively hold a nearly 7% stake. Outside of this, domestic institutional investors (DIIs), including mutual funds and insurance companies, hold a 29.8% stake, whereas foreign portfolio investors (FPIs), including Fidelity’s Asia-focussed ESG Fund, hold a 43.9% stake. IFC holds another 3.4% stake in the company.
