Motilal Oswal Unlisted Share

Company Overview:

Motilal Oswal Home Finance Limited (MOHFL), formerly known as Aspire Home Finance Corporation Limited, is a registered Housing Finance Company (HFC) with the Reserve Bank of India under Section 29A of the National Housing Bank (NHB) Act, 1987. Established in 2014, MOHFL is a wholly-owned subsidiary of Motilal Oswal Financial Services Limited (MOFSL), a well-diversified financial services conglomerate with over four decades of trust in Indian capital markets.

MOHFL operates at the intersection of financial inclusion and affordable housing — two of the most powerful structural growth themes in India's socio-economic evolution. The company's mission is anchored in enabling home ownership for Lower Income Group (LIG) and Economically Weaker Section (EWS) families who are typically underserved by mainstream banks and large HFCs. MOHFL specifically caters to new-to-credit borrowers, self-employed/cash-salaried individuals whose repayment capacity is assessed through proprietary cash-flow models and internal scoring systems rather than conventional income documentation.

By FY2025, MOHFL has grown from its early-stage foundations to a ₹4,857 crore loan book, operating across 112 branches in 12 states and union territories. The company combines robust parentage, disciplined underwriting, and deep technology infrastructure with a mission-driven lending model, making it a unique player in India's evolving affordable housing finance landscape.

Key Business Facts

MACRO & SECTOR TAILWINDS

India's Structural Growth Story

India remains the world's fastest-growing major economy. With GDP growth expected at 6.2–6.8% in FY2025–26 per IMF projections, India is on course to become the world's third largest economy by 2027. This macroeconomic momentum has direct implications for the housing finance sector as rising incomes, urbanization, and a growing working-age population collectively drive homeownership aspirations.

Housing Finance — A Sector with Long Structural Runway

India's mortgage-to-GDP ratio stood at approximately 12.3% in FY25, compared to 60–90% in advanced economies. This deep structural underpenetration represents one of the most compelling long-term investment theses in India's financial services landscape. Several demand drivers reinforce this view:

Urbanization: Rising urban migration increasing demand for formal housing finance

Demographics: Expanding working-age population with stronger income growth

Aspiration: First-generation homeowners in tier-2/3 cities seeking ownership over renting

Government Push: PMAY 2.0 targeting 1 crore urban households over 5 years with ₹1.80 lakh subsidy

Income Upgradation: Household income profile shifting from 'Low' to 'Lower Mid / Upper Mid' by 2030

PMAY 2.0 as a Direct Catalyst for MOHFL

MOHFL is an empanelled lender under PMAY 2.0's Interest Subsidy Scheme (ISS), facilitating subsidies of up to ₹1.80 lakh to EWS/LIG borrowers. This scheme directly aligns with MOHFL's core borrower profile and enhances loan affordability for customers, improving credit access and reducing default risk. With MOHFL already partnered with NHB (central nodal agency for PMAY 2.0), this regulatory tailwind materially supports both disbursement growth and portfolio quality.

Mission & Vision:

The company works on the business philosophy of financial inclusion of Lower Income Group Indian families by providing them an access to long term housing finance.

BUSINESS MODEL & OPERATIONS

MOHFL offers a focused suite of housing loan products tailored to the affordable segment, primarily financing first-time homebuyers. The product mix has diversified over time with self-construction loans (lower delinquency) gaining share:

1. Home Purchase Loan:

Motilal Oswal Home Loans helps to acquire a ready /under construction residential property / construction of a residential property on own land. MOHFL also provides loans to refinance home loan availed by the customer from other Banks / HFCs.

2. Construction Loan:

Home Construction Loan gives tailored and flexible finance to put building blocks for construction of home. The loan is disbursed as per the stage of construction, giving you the flexibility to contribute your share too in parts. MOHFL Home Construction Loan is extended to construct residential premises either from a contractor or contractual builder on a freehold owned plot of non-agricultural land as per plan approved by the local authority.

3. Home Improvement Loan:

It offers loans for renovation of an existing space for a more comfortable environment and a better quality of living. This loan facilitates internal and external repairs and other structural improvements in existing home. Towards this end, the MOHF Home Improvement Loans would typically cover the following improvements: Tiling, Flooring, Roofing, Painting, Electrical work, Plumbing work, Furniture work, Waterproofing, and Grill work for windows.

4. Home Extension Loan:

MOHFL provide loans to construct additional room/s or floor within the permissible building plan.

5. Loan Against Property:

MOHFL Loan Against Property product, provides the opportunity to leverage assets for fulfilling financial needs.

MANAGEMENT & GOVERNANCE

Board of Directors

Key Management Personnel 

FINANCIAL PERFORMANCE

Income Statement Summary

Balance Sheet Summary

Key Operational & Profitability Metrics 

FY2025 was a year of deliberate strategic investment for MOHFL. While PAT growth moderated marginally (-1.7% YoY), this was a conscious management decision to aggressively scale the sales organisation — RMs grew 44% YoY from 925 to 1,329 — resulting in a 40% increase in employee costs. The business delivered its highest-ever disbursements of ₹1,794 crore (78% YoY growth), demonstrating that investment in capacity is translating into robust business momentum.

Revenue grew 10.6% to ₹651.6 crore, primarily driven by interest income (93.3% of total revenue). The compression in NIM from 7.6% to 7.3% and spread from 5.9% to 5.3% reflects: (a) marginal compression in yields as newer, lower-risk borrowers are priced more competitively, and (b) a modest uptick in funding costs. Despite this, the company maintained AUM-based ROA at 2.8%, reflecting efficient utilisation of assets. Capital adequacy at 40.8% remains robust — 2.7x the regulatory minimum of 15% — providing ample headroom for future growth without near-term capital raise.

All three major credit rating agencies (CRISIL, ICRA, India Ratings) upgraded MOHFL's outlook to AA 'Positive' from AA 'Stable' during FY2025 — a powerful validation of improving business fundamentals, asset quality trajectory, and management governance quality.

 KEY FINANCIAL RATIOS

ASSET QUALITY & RISK MANAGEMENT

Industry-Leading NPA Metrics

MOHFL's asset quality is one of its most distinguishing competitive advantages. GNPA has declined consistently from a peak of 2.18% in FY2021 to 0.84% in FY2025, while NNPA now stands at just 0.37% — reflecting both improved underwriting and strengthened collection infrastructure. The company's Stage 3 Provision Coverage Ratio (PCR) improved to 55.9% in FY2025, providing a robust buffer against credit losses.

Crucially, the new book (April 2018 onwards) constituting ~70% of AUM has GNPA of only 0.4%, demonstrating a structural improvement in credit quality. This bifurcation between legacy stress and new-generation underwriting quality is a significant positive for long-term investors.

Key Asset Quality Drivers

Conservative LTV of 58%: Significantly below industry norms, providing collateral cushion

Low FOIR of 43%: Conservative assessment of borrower repayment capacity

Collateral-first lending policy: All disbursements backed by registered property charge

Credit rule engine: Automated, consistent risk-based pricing across all loan approvals

124.3% collection efficiency (incl. prepayments) in FY2025: Evidence of strong borrower repayment culture

Strong legal recourse: SARFAESI, NI Act Section 138, arbitration — in-house team

PEER COMPARISON

MOHFL is benchmarked against two listed affordable HFC peers: Home First Finance Company India Ltd. and Aptus Value Housing Finance India Ltd.

MOHFL stands out among peers for best-in-class asset quality (lowest GNPA of 0.84%, lowest NNPA of 0.37%) and the highest Stage 3 provision coverage ratio (55.9%). However, it trades at a significant P/E premium (59x vs peers at 14–26x) despite lower ROE and ROA, suggesting that the market is pricing in balance-sheet safety and parentage over near-term earnings momentum. Peers (especially Aptus) demonstrate that achieving higher ROE (18.6%) with lower leverage (D/E of 1.57x) is possible in this segment — implying MOHFL has significant profitability upside as it improves capital deployment efficiency.

 VALUATION & FORECASTING

Based on equity book value compounding assumptions and price-to-book (P/BV) multiples aligned with ROE trajectory and asset quality expectations:

Equity growth of 14–16% is assumed based on steady PAT accretion and internal capital compounding, without aggressive equity dilution. The P/BV multiple of 6–8x reflects scenario-differentiated outcomes based on ROE trajectory and asset quality maintenance. Base case at 7x P/BV and ₹28.89 per share implies ~127% upside over a 5-year horizon.

Current Valuation Context

SWOT ANALYSIS

News:

1. Motilal Oswal Home Finance signs USD 100 mn debt deal with ADB for women-focused, affordable, green housing
https://economictimes.indiatimes.com/industry/banking/finance/motilal-oswal-home-finance-signs-usd-100-mn-debt-deal-with-adb-for-women-focused-affordable-green-housing/articleshow/129031348.cms?from=mdr

2. Motilal Oswal Home Finance receives USD 50mn commitment from U.S. International Development Finance Corporation (DFC).
 https://motilaloswalhf.com/press-release-info/?CONTENT_ID=20101

3. Motilal Oswal Home Finance Ltd(MOHFL) inaugurates its 107th branch in India with a new branch in Gurugram.
https://motilaloswalhf.com/press-release-info/?CONTENT_ID=20174