MOTILAL OSWAL Group evaluates the selling family financial department

Mumbai: Three people familiar with the matter said that Motilal Oswal, headquartered in Mumbai’s financial service group, hopes to withdraw from the family financial business and have put their housing financial companies in a state of bankruptcy.

This development has occurred in the context of increasing economic affordable housing in private equity investors and first -level markets in the past few months.

The above -mentioned person who is unwilling to disclose that Motilal Oswal has appointed an investment bank Avendus Capital to find potential buyers.

The Group’s holding company Motilal Oswal Financial Services LTD and other wholly -owned subsidiaries currently hold 97.49%of the housing finance subsidiary Motilla Oswal Home Finance.

Although it is unclear how much these shares may sell, some of the listed peers in the field of economically affordable housing-such as Aadhar Housing Finance, Aavas Financiers, Aptus Value Housing Finance and Home First Finance Company — 2.8- Its book value or net assets 3.9 times.

According to CRISIL data, the independent net assets of Motilla Oswal’s housing financial business are $As of March 31, 2024, the valuation was 12.9 billion rupees. According to the valuation of the peer, rough calculations show that the company’s valuation may be $3,6112 million rupees $50.31 billion rupees.

A spokesman for Motilla Oswal Home Finance denied the move: “Motilla Oswal Home Finance LTD (MOHFL) business sales have no such development.”

The spokesman added that, as part of the continuous strategic efforts, the company will continue to evaluate various business opportunities and “if any such specific progress will be made in the future, it will notify any related updates.”

As of press time, the email sent to Avendus has not received a reply.

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The economically affordable housing financing loan institution began operating in the name of Aspire Home Finance Corp., and was renamed Motilal Oswal Home Finance in 2019. As of June 30, 2024, its loan account book is $According to Crisil, it is 40.98 billion rupees. The scale of the loan book is $March 31, 2024 was 40.48 billion rupees.

The loan has also encountered asset quality problems in the past. A report from the rating agency ICRA in August 2021 pointed out that in fiscal 2019, the bank’s total assets (NPA) rose to 9.2%of the loan. The statement stated that the Motilla Oos Valt Group adopted “multiple remedial measures, including strengthening systems and processes, management support, strengthening supervision and capital injection, which emphasized its commitment to joint venture.”

Since then, the quality of the assets has improved. As of September 30, 2024, the total rate of non -performing assets was 1.3%, which was below 2.1%below September 30, 2023. Comparison of peers showed that the total non -performing asset ratio of Aadhar Housing Finance and Aptus Value Housing Finance India was as of September 30, 2024, respectively, 1.3%and 1.25%, respectively.

At the same time, Crisil Ratings believes that Motilla Oswal Home Finance still has strategic importance for Motilal Oswal Financial Services because it allows the group to be involved in the field of housing finance. This “gives its income status diversity and reduces the cyclical impact of the capital market business.”

In September 2024, Crisil’s outlook for Motilla Oswal Home Finance was adjusted from stability to positive.

Increase transaction activities

When deciding to sell the business, private equity investors have shown a strong interest in the business of affordable housing.

For example, Shriram Finance sells it to Mango Crest Investment, a subsidiary of Huaping at all shares at Shriram Housing Finance 84.44%. $In December 2024, it reached 39.29 billion rupees. Since then, the company has been renamed Truhome Finance.

Subsequently, EQT Partners acquired 100%equity of Indo Star Home Finance in September 2024. Earlier, CVC Capital PARTNERS acquired 26.47%of the listed company Aavas Financiers’ 26.47%in August 2024, which caused an open offer for control.

Other private investors such as TA Associates, Prosus Ventures, Norwest Venture Partners, and Multiples Alternate Asset Management have also made a few equity investment. These include investments in Vastu Housing Finance, Vridhi Finserv Home Finance and Shubham Housing Finance.

Last year, two large IPOs (first public offering) were conducted in the field. Due to the rich valuation, at least some housing finance companies (including Aadhar Housing Finance) have abandoned the sales process and turned to the open market. In addition to AADHAR, Bajaj Housing Finance also launched last year.

Economic affordable houses become highlights

Experts said that under the support of rapid urbanization, increased migration to cities, and the continuous growth of the middle class, the field of affordable housing is still a highlight, and it is likely to continue to be a high -growth field.

Prakash Agarwal, a partner of the debt market consulting company GeFion Capital Advisors, said: “In view of the limited penetration rate of large banks, this is particularly attractive to non -bank institutions, which makes HFC (Housing Financial Company (Housing Financial Company” ) Can generate attractive risk adjustment rates. “

Agarwal said that even in the long run, the industry’s prospects are still optimistic and provided enough room for continuous growth for participants in the field.

“This enables the industry to attract a lot of capital because it supports many aspects of investors, including large -scale potential markets, long -term prospects, strong popularity, considerable return and regulatory support.”

Mint reported on December 28 that under the fierce competition of banks in the high -quality housing field, mortgage institutions are increasingly seeking to provide financing for affordable housing.

The Indian Economic Affordable Housing Loan Market is estimated to be $13 trillion, of which HFCS composition $69 trillion, bank occupation $According to the national housing banking data cited in the joint report of Knight Frank, a real estate consulting company CII and a real estate consulting company, 6.2 trillion US dollars.