Motilal Oswal (Erstwhile Aspire) Home Finance Limited Unlisted Shares

Motilal Oswal Home Finance Limited Overview:

Motilal Oswal Home Finance Limited (MOHFL) is a subsidiary of Motilal Oswal Financial Services Limited (MOFSL). The housing finance company is professionally managed with a unique combination of financially sound and technically experienced promoters who are well known in their domain for professional ethics and strong execution capabilities.

The company believes in the financial inclusion of Lower and middle class by providing them access to long term housing finance.

Motilal Oswal Home Loans, provides one of the fastest turn-around times for processing applications, enabling credit access on fair terms. Provision of a value-added proposition like Property Services and Insurance Services, and best in class service for the customer segments makes MOHF the preferred choice of over 60,000 customers in the Lower and middle-class segment.

The company is present in 113 locations across 9 states (and growing).

The journey so far:

2014 and 2015:

• Commencement of business from 22^nd May 2014
• Loan book crosses 350crs with Presence across 14 locations
• PAT at INR 2.18crs

2016 and 2017:

• Loan book crosses 4,000crs.
• Received Various awards

2018 and 2019:

• Capital Infusion of 350crs by promoter company taking total infusion at 850crs.
• Name change from Aspire Home Finance Corporation Limited to Motilal Oswal Home Finance Limited on 28^th May 2019
• New Leadership Team in place with New MD & CEO, Chief business officer and senior management team with all functional heads in place.

As can be seen above, the company’s performance had deteriorated in the last two years due to identified bad loan books and not having proper systems in place. The company has changed the management team and now have a senior management team with every functional head in place.  The performance of the company has improved. The sale of NPA has even lowered the NPA and cash on hand has increased leaving more headroom for growth. The room for growth in the housing finance space is significant and the same is reflected in management discussion & analysis in the annual report main points of which is as under:

• As per ICRA’s report, the total outstanding housing credit as on December 2018 stood at V 18.2 lakh crores which grew at ~10% from FY2018. Out of the total outstanding credit, Housing Finance Companies (HFCs) contributed V 6.7 lakh crores.
• The stagnant growth in HFCs was opportune by banks which grew their housing portfolio at ~11.6% between FY2018 and December 2019. On the front of affordable housing finance, the credit growth continued its growth momentum at ~17% between FY2018 and December 2018 showing relatively less impact from liquidity issues. This was majorly due to NHB’s liquidity support and robust demand.
• Although the liquidity issues put some brakes on the disbursements by HFCs, the demand side has continued to remain robust with positive consumer sentiments. With short term blips caused by demonetization becoming the matter of past, Real Estate Regulation & Development Act (RERA) has helped in lifting the trust factor of property consumers. With its stringent preventive and punitive provisions, RERA has put an end to their exploitation by unscrupulous developers by making transactions fair, transparent and secure.
• The government implemented GST rate cuts for under-construction projects to 5% from 12%. Also, in a major push to the stated objective of ‘Housing For All by 2022’, the government has reduced GST to 1% for affordable housing segment. The lower tax burden on home consumers is expected to push the demand and consumer sentiments in the long-term.

On the structural front, the factors like urbanization, migration of population, the nuclearization of families, rising working-age population, and the emotions associated with owning a home will continue to aid the growth in the housing finance sector. As per ICRA, over the medium and long term, it is expected the industry to grow in the range of 14-16% driven by growth in affordable housing space and easing out of liquidity concerns

Management of the company:

Past performance of the company:

All figures INR in crores except specifically mentioned

Motilal Oswal home Finance Ltd. shareholding pattern as on 31.03.2020 is as under:

Annual Reports for the last 2 years are as under:

MOHFL-annual-report-2020.pdf

MOHFL-annual-report-2019.pdf

Motilal Oswal Home Finance Limited Unlisted Shares:

Unlisteddeal review:

• The company is commanding premium valuation due to huge market size as well as the company is backed by management with sound corporate governance and performance history.
• The promoter company has infused INR 200crs in the company in the last 2 Years. The promoter company is having free cash flow from operations and is expected to infuse more capital as and when required for the continuous growth of the company. This has benefited the Motilal Oswal fin share price and value.
• The company now has an entirely new management and leadership team and is expected to perform well entailing good CAGR returns to the esteemed Motilal Oswal Home Finance Shareholders.

News:

Motilal Oswal Home Finance’s Journey From Carefree Growth To Clean-Up

Frequently Asked Questions (FAQs) on Motilal Oswal Home Finance Limited (erstwhile Aspire Home Finance Corporation Limited) unlisted shares: