Motilal Oswal Financial Services is reportedly planning to exit the home finance business and has put its housing finance arm, Motilal Oswal Home Finance, on the market. According to sources cited in a Mint report, the Mumbai-based financial services group has engaged investment bank Avendus Capital to find potential buyers for the 97.49% stake held by Motilal Oswal Financial Services Ltd and its wholly owned subsidiaries.
The development comes at a time of heightened deal activity in the affordable housing sector, driven by increased interest from private equity investors and primary markets. Despite the growing interest, Motilal Oswal Home Finance has denied reports of a sale. A company spokesperson, as cited in the Mint report, stated that no developments regarding a potential sale have occurred.
While the exact valuation of the stake remains unclear, industry experts suggest the valuation could be benchmarked against listed peers in the affordable housing segment, including Aadhar Housing Finance, Aavas Financiers, Aptus Value Housing Finance India, and Home First Finance Company. These companies currently trade at 2.8-3.9 times their book value. According to Crisil, Motilal Oswal’s housing finance arm had a standalone net worth of ₹1,290 crore as of March 31, 2024. Based on peer valuations, the company could be valued between ₹3,612 crore and ₹5,031 crore.
Motilal Oswal Home Finance, which began operations in 2014 as Aspire Home Finance Corp. and rebranded in 2019, had a loan book of ₹4,098 crore as of June 30, 2024. This marks a slight increase from ₹4,048 crore as of March 31, 2024. The company has faced asset quality challenges in the past, with gross non-performing assets (NPAs) peaking at 9.2% in FY19. However, measures such as enhanced managerial oversight, system improvements, and capital infusion have been implemented to address these issues.
Despite the company’s denial of the sale, the move highlights the shifting dynamics in the affordable housing finance sector, where consolidation and strategic exits have become more common in recent months.
