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Motilal Oswal Home Finance Essentials

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ISIN

INE658R01011

Face Value

₹1.00

Total Share

6,02,70,91,515

Total Income

₹297.17 Cr

Profit After Tax

₹94.89 Cr

EPS

₹0.16

P/E

52.81

P/B

5.31

Market Capitalisation

₹5,092.89 Cr

Enterprise Value

₹7,522.77 Cr

Book Value

₹1.59

Intrinsic Value

₹3.17

Earnings Yield

1.89 %

Sector

Financials

Sub-sector

Housing Finance

Motilal Oswal Home Finance Growth

About Motilal Oswal Home Finance

Motilal Oswal Home Finance Limited (MOHFL) operates as a housing finance company in India. It offers home (purchase/resale), construction, home improvement, and home extension loans.
The company also provides residential (retail) services, including property search (purchase/resale/rent/sale/lease), market intelligence, and finance assistance; commercial services, such as property market research, project planning and execution, deal negotiations, legal advisory, tenant sourcing, and corporate advisory for space requirements (leasing); and consultancy services comprising due diligence on real estate transactions, strategic advisory for real estate portfolio, and valuation services (land, projects, portfolio, and retail).
In addition, it offers loan against property and insurance services.
It is a well-diversified, financial services company focused on wealth creation for all its customers, such as institutional, corporate, HNI and retail.

MOHFL is a subsidiary of Motilal Oswal Financial Services Limited (MOFSL) and is registered with National Housing Bank (NHB)
It is amongst the leading new age Housing Finance Companies in India having its presence across 11 states in Western, North-Central and Southern India.
In FY21 CRISIL has upgraded MOHFL’s rating to AA- (stable outlook) from earlier A+(stable).
MOHFS was established in October 1, 2013 and has registered office in Mumbai and was previously known as Aspire Home Finance Corporation Limited.

Motilal Oswal Home Finance IPO Details

As of Feb, 2022 Motilal Oswal Home Finance doesn't have any plan for IPO.

Motilal Oswal Home Finance Funding

Funded By	Funding Amount	Date of Investment	Funding Round	Fund Name
International Finance Corporation	₹ 100 Cr	Jul 2016	Debt fund	Non-Convertible Debentures

Motilal Oswal Home Finance Merger & Acquisition

Acquisition

On September 30, 2019 Phoenix ARC Private Limited acquired a Pool of Non-Performing Assets of Rs.5400 million from Motilal Oswal Home Finance Limited for Rs.2600 million.

Motilal Oswal Home Finance Subsidiaries

Motilal Oswal Home Finance has no subsidiary, joint venture or associate company.

Motilal Oswal Home Finance Business Model

Motilal Oswal Home Finance Limited (MOHFL) offers home (purchase/resale), construction, home improvement, and home extension loans.
The company also provides residential (retail) services include property search, market intelligence, and finance assistance; commercial services include property market research, project planning and execution, deal negotiations, legal advisory, tenant sourcing, and corporate advisory for space requirements (leasing); and consultancy services include due diligence on real estate transactions, strategic advisory for real estate portfolios, and due diligence on real estate transactions (land, projects, portfolio, and retail).

Motilal Oswal Home Finance Revenue Segmentation

Fees income
Other Income

Interest Income
Net gains on fair value changes

Motilal Oswal Home Finance Product & Services

The Products:

Home Loans
Construction Loans

Home Improvement Loans
Pradhan Mantri Awas Yojana (PMAY)
Home extension loan

Other Services offered by the company include:

Property Services – sale/rent/resale etc.
Loan against property

Motilal Oswal Home Finance Assets

As of March'22 the company has total asset of worth Rs. 37.22 Cr.

Assets	Amount in Cr.
Computers and data processing	Rs. 10.27
Furniture and fixture	Rs. 4.06
Electric installation	Rs. 2.07
Office equipment	Rs. 3.60
Motor Car	Rs. 0.23
Lease hold improvement	Rs. 9.49
Right of use	Rs. 7.48

Motilal Oswal Home Finance Industry Overview

Industry Statistics

Housing Finance Companies (HFCs) serves as an alternative financing channel to the real estate and housing sector and are a part of the non-banking financial companies (NBFC) sector. HFCs play an important role in the Indian financial system by complementing and competing with banks, specializing in credit delivery to home buyers.
The non-banking housing finance market in India is fragmented with over 80 HFCs. However, the top four players command over 70% of the market share.

The asset size of NBFC sector (including HFCs), as on March 31, 2020, is Rs.51.47 lakh Cr.
As per ICRA’s report, the total outstanding housing credit as on December 2020 stood at Rs. 22.10 lakh Cr. Out of the total outstanding credit, Housing Finance Companies (HFCs) and Non-Banking Financial Corporations (NBFCs) contributed around Rs. 7.2 lakh Cr.

Over the last five years, the Indian home loan portfolio has grown twice its size. The emergence of housing finance is a major business in the country, the demand for housing loans was rapidly increasing in recent years.
Demand for residential properties has surged due to increased urbanization and rising household income. India is among the top 10 price appreciating housing markets internationally.

During the period 2016-2020, the housing demand by buyers of top 8 cities in High income group(HIG) category was 2.04 times the supply in High income group category. While the housing demand by buyers of top 8 cities in Middle income groups was 2.23 times the housing supply in Middle income group.

With the Coronavirus pandemic impacting all sectors of the economy, the credit shortage brought down the residential sales from 4 lakh units in FY20 to 2.8 lakh units in FY21 across the top seven cities of India. After the Coronavirus-induced lockdown was lifted, the real estate industry has witnessed a gradual recovery.
Residential segment contributes 80% of the real estate sector. Housing launches across top eight Indian cities increased 23% y-o-y in 2019 to 0.22 Lakh units.

The key players in India home loan market include SBI Home Loans, PNB Housing Finance, HDFC Housing Finance, Motilal Oswal Home finance. The companies operating in the loan market are offering flexibility in terms of interest rates, service charge & fees and tenure in order to draw customers.

Future Prospects

Housing loan rate is low in India when compared with developing economies, presenting opportunities for the growth of home loan market in the country. Moreover, government push towards affordable housing coupled with acute shortage of housing is further expected to drive India home loan over the next five years.
India home loan market is anticipated to grow at a brisk rate of around 22% during 2021-2026 on account of increasing urbanization and affordable mortgage rates.
As per ICRA, over the medium and long term, it is expected the industry to grow in the range of 7-8% driven by growth in affordable housing space and easing out of liquidity concerns. As per CRISIL report, India’s Mortgage Penetration Expected to touch 15% by 2024 from currently 12.4%.
The Indian age demography has two-thirds of our population below 35 years of age, Share of population in the age group 0-14 is 26.16%. Share of working age population (15-65 years) is 67.27%, which indicates a very positive future outlook for Indian housing sector.

Government Initiatives

As part of response to the economic challenges faced by the industry, RBI has been announcing various measures like Targeted Long-term Repo Operations-2(TLTRO-2), Relaxation of asset classification norms, which will aid in liquidity flow into the system and should give relief to NBFCs.
The government’s focus on ‘Housing for All by 2022’ has been undeterred in the last five years. The housing finance industry has been able to report a growth of 13% CAGR over FY2018-2020.
Government has shown keen interest in this industry and hence taken various steps through their policy making such as Real Estate Regulatory Act (RERA), Benami Transactions Act, boost to affordable housing construction and Interest subsidy to home buyers.
Pradhan Mantri Awas Yojana (PMAY), the government of India’s "Housing for All" initiative is expected to bring US$ 1.3 trillion investment in the housing sector by 2025. The scheme is expected to push affordable housing and construction in the country and give a boost to the real estate sector.
In Union Budget, government has announced a high-level committee for urban planners and economists to be formed for recommendations on urban capacity building, planning implementation, and governance. In FY23, 80 lakh households will be identified for the affordable housing scheme.

Motilal Oswal Home Finance Awards & Achievements

Company was awarded “Digital Excellence in Urban Finance” at the Digital Customer Excellence Awards,2019
Awarded the Customer Excellence Award at the India CX SUMMIT & AWARDS, 2019.
Company was awarded “The Innovative Marketing Practices Award” & the Innovative Product and Services Award” at 7th National Conference and Game Changers Awards, 2017.

Motilal Oswal Home Finance Strengths

The company has vast distribution network, with 104 branches in 9 states.
In FY21, the company launched Pradhan Mantri Awas Yojana(PMAY) portal and have started on-boarding partners through Digital MO Partner app.
CRISIL has upgraded MOHFL’s rating to AA- (stable outlook) from earlier A+ (stable). MOHFL’s ability, strengthening of collections and recovery apparatus, enhancing credit appraisal and risk monitoring system, strengthening of capital position and greater integration of the MOHFL with those of its parent including the change of name of the company has improved the credit profile of MOHFL and enabled to bring down cost of funds in FY21 and over longer run.
MOHFL disbursed loans grew by 136% year-on-year to Rs.643 Cr, which shows better performance then its peers.
Company GNPA has decreased from 1.5% in 2021 to 0.9% in 2022.

Motilal Oswal Home Finance Shortcomings

Regulatory restrictions - continuously evolving government regulations may impact the company negatively by making company's operations uncertain.
During FY19, the management decided to slow down growth to focus on strengthening the credit policies hence, disbursements were lower and AUM de-grew, the profitability and hence the ROAs could not keep pace because of underutilization of infrastructure and high delinquencies.

Motilal Oswal Home Finance Opportunities

There is large untapped rural and urban market which can’t get housing loans from traditional banks, MOHFL can increase its penetration in those markets.
Company can use digital solutions for business/collections this will improve efficiency and reduce cost of operations.
The home loan market is experiencing an enormous opportunity due to increasing internet and smartphone penetration.
Structurally, the potential for housing segment growth remains significant, owing to favorable demographic drivers such as urbanization, nuclearization of families, increasing disposable income, and a growing working-age population, all of which may provide many growth opportunities for the company. Moreover, Housing demand is further supported by multiyear low house prices and multidecade low home loan interest rates. This might open up a lot of opportunities for the organization.

Motilal Oswal Home Finance Threats

The biggest problem for the affordable home loan segment has been the credit outreach. Many credit institutions find it difficult to access these customers because many borrowers beyond the top 50 towns are unaware of their eligibility to get loans.
The home loan market is experiencing an enormous opportunity due to increasing internet and smartphone penetration. Due to which, many new market players are eyeing the profit pool that this segment holds, which can create a threat for existing players.
The portfolio growth in the affordable segment slowed as well but remained higher than HFCs although on a lower base, supported by robust demand and liquidity support from NHB, leading to a growth of around 8% in 9M FY 2020-21 following the growth of 18% in FY 2019-20.