Motilal Oswal mulling sale of housing finance subsidiary

Motilal Oswal is reportedly planning to exit the home finance business and has put its housing finance arm, Motilal Oswal Home Finance, up for sale. According to sources cited in a Mint report, the Mumbai-based financial services group has appointed the investment bank Avendus Capital to identify potential buyers for the stake, which is currently held by Motilal Oswal Financial Services Ltd and its wholly owned subsidiaries, amounting to a 97.49 percent share in the housing finance business.

This development comes amid rising deal activity in the affordable housing sector, with private equity investors and primary markets demonstrating significant interest in recent months. While it is uncertain how much the stake may fetch, the company's valuation could be estimated by comparing it to 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, which are currently trading at 2.8 to 3.9 times their book value.

According to data from Crisil, Motilal Oswal’s housing finance business had a standalone net worth of Rs 1,290 crore as of March 31, 2024. Using peer valuations, this could place the company's value between Rs 3,612 crore and Rs 5,031 crore, as stated in the report. However, Motilal Oswal Home Finance has denied reports of a potential sale. A company spokesperson, referenced in the report, noted that there have been no developments regarding the sale of the business.​