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CompaniesShayan Ghosh
, Ranjani Raghavan
, Anirudh Laskar
4 min
read
27 Jan 2025, 05:00 AM
ISTMotilal Oswal has appointed investment bank Avendus Capital to look for potential buyers.SummaryThe affordable housing finance lender started operations in 2014 as Aspire Home Finance Corp. and has a loan book of ₹4,098 crore
Mumbai: Mumbai-based financial services group Motilal Oswal wants to exit the home finance business and has put its housing finance company on the block, three people aware of the matter said.
The development comes in the backdrop of increased deal activity in the affordable housing space in the past few months, both from private equity investors and in the primary markets.
Motilal Oswal has appointed investment bank Avendus Capital to look for potential buyers, the people cited above added on condition of anonymity.
The group’s holding company, Motilal Oswal Financial Services Ltd, along with other wholly owned subsidiaries, currently holds 97.49% stake in the housing finance subsidiary, Motilal Oswal Home Finance.While it was not immediately known how much the stake might fetch, some of its listed peers in the affordable housing space—such as Aadhar Housing Finance, Aavas Financiers, Aptus Value Housing Finance India, and Home First Finance Company—are trading at 2.8-3.9 times their book value or net worth.
As per data from Crisil, Motilal Oswal’s housing finance business had a standalone net worth of ₹1,290 crore as on 31 March 2024. Going by peer valuation, back-of-the-envelope calculations show the company could be valued between ₹3,612 crore and ₹5,031 crore.
A spokesperson for Motilal Oswal Home Finance denied the move: “There is no such development of sale of business of Motilal Oswal Home Finance Ltd (MOHFL)”.
The spokesperson added that the company continually evaluates various business opportunities as part of ongoing strategic efforts, and it would “communicate any relevant updates if there is any such specific development in future”.
An email sent to Avendus remained unanswered till press time.The numbersThe affordable housing finance lender started operations in 2014 as Aspire Home Finance Corp. and was renamed to Motilal Oswal Home Finance in 2019. As of 30 June 2024, it had a loan book of ₹4,098 crore, according to Crisil. The loan book size was ₹4,048 crore on 31 March 2024.
The lender has had its share of asset quality troubles in the past. An August 2021 note by rating agency Icra had pointed out that in FY19, the lender’s gross non-performing assets (NPAs) rose to 9.2% of loans. It said that the Motilal Oswal Group undertook “several remedial measures, including the strengthening of the systems and processes, managerial support, increased oversight, and capital infusion, thereby underscoring its commitment to th
