Motilal Oswal Home Finance Limited Shares Annual Reports

Motilal Oswal Home Finance Limited Shares

Responsible Growth: Motilal Oswal Home Loans, Annual Report 2023-24 Summary This report covers the financial year ending March 31, 2024, detailing Motilal Oswal Home Finance Limited’s (MOHFL) performance, industry landscape, and strategic initiatives. The company emphasizes responsible growth with integrity, prioritizing clients and communities to build sustainable living. **Corporate Information:** MOHFL's board includes Mr. Motilal Oswal (Chairman), Mr. Raamdeo Agarawal, Mr. Sukesh Bhowal (MD & CEO), Mrs. Divya Momaya, Mr. P. H. Ravikumar, and Mrs. Neha Gada as directors. Various committees, including Audit, Nomination and Remuneration, Stakeholders Relationship, Corporate Social Responsibility, Risk Management, Asset Liability Management, and IT Strategy, are also detailed, along with key personnel like Mr. Bhavin Shah (CFO) and Mr. Sunny Ganatra (Company Secretary). Key contact information for investor grievances is also provided. **Chairman’s Message:** The Chairman notes the resilience of the Indian economy and the housing finance market's growth, with a 13.5% CAGR (FY2019-2023). MOHFL achieved a Profit After Tax (PAT) of ₹133 crore in FY2024. Investments in Relationship Managers (RMs) have yielded positive results, with full-year disbursements crossing ₹1,000 crore. As of March 2024, the loan book stood at ₹4,048 crore, reflecting a 6% year-on-year growth. MOHFL has received AA/Stable rating from CRISIL, ICRA, and India Ratings and average cost of borrowings for FY2024 stood at 8.3%. Gross Non-Performing Assets (GNPA) stood at 0.9% and Net Non-Performing Assets (NNPA) at 0.4% as of March 2024. **Key Highlights (FY2024):** PAT of ₹133 crore, Disbursements crossed ₹1,000 crore (₹1,018 crore), "AA/Stable” credit rating, 1,900+ employees, cost of borrowing at 8.3%, ₹1,337 crore raised, 58% of loan book from post-April 2018 originations (GNPA of 0.3%), U.S. Development Finance Corporation partnership, and LMS/LOS in-house systems. **Business Performance:** Disbursements of ₹1,018 crore, 600+ collection team, 103.8% collection efficiency, serving 47,500+ families, LTV of 58% and FOIR of 42%. **Financial Performance:** Loan book at ₹4,048 crore (as of March 31, 2024), Net Worth of ₹1,287 crore, Profit of ₹133 crore, Yield of 14.2%, COF of 8.3%, NIM of 7.6%, Spread of 5.9%, GNPA of 0.9%, NNPA of 0.4%, 51% Stage 3 Provision coverage, Net Debt to Equity of 2.0x, 46% cost to income, and 51% capital adequacy. **Loan Book & Borrowing Analysis:** The report provides analysis of the loan book by state (Maharashtra, Gujarat, Madhya Pradesh, Tamil Nadu, Rajasthan, Karnataka, AP & Telangana, Delhi, Chhattisgarh, Haryana, Uttar Pradesh) and customer mix (self-employed, salaried), product mix (new purchase, self-construction, composite, home improvement/extension, resale, others). Borrowing mix includes term loans, NCDs, NHB, securitization, and ECB. **ESG Initiatives:** Emphasizing environmental responsibility, the initiatives include ecology-conscious lending, funding environmentally sound projects, tree planting, LED lighting, waste reduction, and digitalization to reduce paper use. Social initiatives include following IFC performance standards, promoting affordable housing, employee support, safety programs, women empowerment (W-I-N-G-S), customer service, and senior leadership development. Governance involves Board diversity, regulatory compliance ("Fit & Proper Criteria"), risk management, and prevention of sexual harassment, insider trading and a whistle blower framework. **Our Journey:** MOHFL started operations in 2014 and has expanded to 110 locations across 12 states/UTs. Key milestones include achieving an "A/Stable" rating in 2015, receiving awards for innovative programs, upgrading ratings to AA/Stable in FY23, and crossing ₹1,000 crore in disbursements. **Key Strategic Initiatives:** These initiatives focus on growing the loan book, robust in-house processes, improving TAT, extending geographical reach, focusing on self-construction/completed properties, extending the product bouquet, strengthening the credit structure, on-boarding MO Partners, reducing cost of funds, and diversifying the liability mix. **Management Discussion & Analysis:** **FY2024 Overview:** The Indian economy exhibits resilience despite global uncertainties, with a projected growth of 7.8% in FY24 and 6.8% in FY25. The housing finance industry faces supply-side challenges but has a significant growth potential. India's mortgage-to-GDP ratio is 12%, projected to reach 14-15% by FY2025. The market has grown at a CAGR of 13.5% (FY2019-2023). **Regulatory Landscape:** The report notes RBI’s regulations for NBFCs, including HFCs, such as liquidity coverage ratios, net-owned fund requirements, capital adequacy, and risk weights for home loans. Also, mentions SEBI and RBI guidelines on areas including consumer credit, unclaimed NCDs, investment in AIFs, fair lending practices, compromise settlements, release of property documents, and floating interest rates. **Progress Under PMAY:** Addresses progress made under Pradhan Mantri Awas Yojana (PMAY), including state-wise summaries of projects considered, investments, central assistance, houses sanctioned, grounded, and completed. Also, discusses the effects of GST, RERA, and the Benami Act. **Motilal Oswal Home Finance Limited Details:** MOHFL focuses on home loans to individuals, especially in the affordable housing segment. They have a MOU with NHB for the Credit Linked Subsidy Scheme (CLSS) and use risk-based pricing. For FY2024, disbursements crossed 1,000 crore and profit after tax was ₹133 crores. **Business Presence:** The company operates in 110 branches in Maharashtra, Gujarat, Tamil Nadu, Rajasthan, Karnataka, Madhya Pradesh, Haryana, Andhra Pradesh, Chhattisgarh, Telangana, Delhi and Uttar Pradesh. **Loan and Credit Details:** Total loans outstanding stood at ₹4,048 crore in FY24, with 58% average LTV. Approvals involve a four-layer process with a dedicated risk containment unit. The GNPA was 0.9%, and Net NPA was 0.4% as of March 31, 2024, with a 50.5% Provision Coverage Ratio (PCR). Collection efficiency in FY24 was 103.8%. **Liability Management:** MOHFL maintains an AA stable outlook and diversified funding sources. Average duration of borrowings increased, resulting in enhanced ALM and also joined hands with U.S. International Development Finance Corporation and has received commitment of USD 50 mn **Risk Management Framework:** The company employs a mechanism for identifying, assessing, monitoring and mitigating various risks to key business objectives with an internal function for property valuation and legal opinion. A Real Time Risk Management (RTRM) process is in place, with a Risk Containment Unit (RCU) to scrutinize loan proposals. **Internal Audit and Control:** MOHFL has an adequate system of internal control in place. **Collection/Legal organization:** MOHFL has set up an in-house collection team of 500+ officers. **Digitization:** MOHFL has developed in-house Loan Origination System (LOS) and Loan Management System (LMS) with extensive usage of technology and has systems for Aadhar based e-signature and biometric authentication as well **Human Resource:** MOHFL total headcount stands at 2,294 employees. **Outlook:** MOHFL is positioned to capitalize on India's growing demand for affordable housing with strong team and sound management and by leveraging all the opportunities and addressing emerging challenges. **Board’s Report and Financial Statements:** **Financial Performance:** Gross income increased to ₹589.08 crore in FY24, while net profit was ₹132.52 crore. **Dividend:** No dividend is proposed to preserve resources for future growth. **ESG Initiatives:** The company undertook various Environmental, Social, and Governance initiatives, **Share Capital:** Authorised share capital is ₹10,00,00,00,000. The issued subscribed share capital of the company stood at 6,03,78,64,375. **Fund Raising / Sources of Funds:** The total borrowings as on March 31, 2024, was ₹2,994.24. The company mobilised funds aggregating to ₹1,336.56 crore with refinance from national housing banks etc. **External Commercial Borrowings:** The Company has drawn its 4th and 5th tranche of USD 10 Million each from DFC on fully hedged basis. The outstanding ECB stood at ₹411.44 crore. **Loans from Banks / Financial Institutions:** The outstanding term loans facilities stood at ₹1,851.42 crore. **Securitisation:** The outstanding balance of securitization through Pass through Certificate stood at ₹95.08 crore. **Non-Convertible Debentures:** The outstanding unsecured NCDs stood at ₹215 crore. **Credit Ratings:** The company has CRISIL AA/ Stable, [ICRA]AA(Stable), and IND AA/Stable credit ratings. **Non-Performing Assets and Provisions:** The company's GNPA stands at ₹34.70 crore or 0.86%. Provision on NPA stands at ₹17.53 crore, and NNPA is at ₹17.17 crore or 0.43%. **Board Composition and Meetings:** Board contains Executive, Non-Executive, and Independent Directors and Meetings are held regularly. **Key Managerial Personnel:** Includes Mr. Sukesh Bhowal, Mr. Bhavin Shah, and Mr. Sunny Ganatra. **Committee Composition:** Comprises Audit, Nomination and Remuneration, CSR, Risk Management, etc. **Corporate Social Responsibility (CSR):** Committed to societal responsibility, particularly supporting education. The CSR policy is available on MOHFL website. A detailed report on CSR activities are included. **Policy relating to Directors appointment and remuneration:** NRC has adopted various guidelines for the same which can be viewed at Company's website. **Vigil Mechanism/Whistle Blower Policy:** Framework exists to allow employees and directors to report genuine concerns and is reviewed regularly by the Audit Committee. **DEBENTURE TRUSTEES:** The details of the Debenture trustees of the Company are as under - Beacon Trusteeship Limited. **FAMILIARIZATION PROGRAMMES:** Details of familiarization programme imparted to the Independent Directors are available on your Company's website **Policy For Prevention, Prohibition And Redressal Of Sexual Harassment at Workplace:** Framework exists for the same at the company. **Internal Financial Controls:** Framework in place and designed appropriately. Financial statements The independent auditor report of Singhi & Co. Chartered Accountants had expressed an unqualified opinion. Key audit matters include accounting for expected credit loss and the company's IT systems. Detailed audited financial statements are presented, including the balance sheet, statement of profit and loss, statement of cash flows, and statement of changes in equity. Notes accompanying the financial statements provide detail on various balance sheet line items, equity, borrowings, financial risk management and associated accounting policies. The report shows 196 pages of notes and disclaimers.

Motilal Oswal Home Finance Limited Shares

A New Dawn symbolizes a new beginning, hope, and optimism for Motilal Oswal Home Finance (MOHFL). In FY2023, the company achieved its highest-ever profitability, increased disbursement, loan book growth, and improved asset quality. It is committed to evolving and improving to achieve its full potential. **Corporate Information:** The annual report provides corporate information for Motilal Oswal Home Finance Limited for the fiscal year 2022-23. Key personnel include Motilal Oswal (Chairman & Interim Managing Director), Raamdeo Agarawal (Non-Executive Director), and Divya Momaya and P. H. Ravikumar (Independent Directors). Shalibhadra Shah is the Chief Financial Officer, and Ritin Mawani is the Company Secretary & Compliance Officer. M/s. Singhi & Co. are the Statutory Auditors. Link Intime India Private Limited serves as the Registrar & Transfer Agent. Addresses for the registered and registered offices are provided. Several committees oversee key aspects of the company's operations, including the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, Asset Liability Management Committee, and IT Strategy Committee. Details of committee members are provided. The document also lists the various bankers and lenders, as well as debenture and security trustees. **Chairman's Message:** Motilal Oswal, Chairman, reports FY2023 as a growth year despite economic headwinds. India's retail inflation reached an 8-year high of 7.79% in April 2022, prompting the RBI to raise repo rates by 250 bps to 6.5%. However, these measures helped decrease retail inflation to 5.66% by March 2023. He highlights the highest-ever PAT of ₹136 crore, a 44% YoY increase, and improved ROA and ROE. Disbursements increased by 57% YoY to ₹1,007 crore. The company now operates in 12 states/UTs with 109 branches and serves 47,350+ families. ICRA upgraded the long-term rating to AA/Stable. The company partnered with the U.S. International Development Finance Corporation (DFC) and secured a USD 50 million commitment. The cost of borrowings decreased by 24 bps YoY to 8.0%. GNPA stood at 1.1% and NNPA at 0.5%. Digital initiatives are underway, including mobile apps for sales, credit, and collection, and the MOHFL Parivar app for customers. **Board of Directors/KMP Profiles:** Brief profiles are presented for each member of the Board of Directors and Key Management Personnel, highlighting their qualifications, experience, and roles within the Motilal Oswal group. **Key Highlights (FY2023):** - Highest ever PAT of ₹136 crore, up 44% YoY. - Disbursements grew by 57% YoY to ₹1,007 crore. - ICRA upgraded long-term credit rating from AA- to AA (stable). - Independent sales, credit, collection, and operations teams. - Cost of borrowing down 24 bps YoY to 8.0%. - Raised ₹1,052 crore at 7.5% in FY2023. - New book (post-April 2018) contributes 48% of loan book with GNPA <1%. - Strong liability mobilization from banks & institutions. - Collection efficiency of 100.1% in FY2023. - Loan book stood at ₹3,772 crore. - Net worth of ₹1,148 crore. - NIM of 7.7% and spread of 5.9%. - GNPA of 1.1% and NNPA of 0.5%. - Stage 3 provision coverage of 49%. - Net debt to equity of 2.2x. - Capital adequacy of 51%. **Loan Book & Borrowing Analysis:** The report analyzes the loan book composition by state, customer type (self-employed vs. salaried), and product type (new purchase, self-construction, etc.). It also provides a borrowing mix breakdown (term loan, NCD, NHB, securitization, ECB). **ESG Initiatives:** The company details its Environmental, Social, and Governance initiatives. - Environmental: Responsible lending practices, funding environment-friendly projects, judicial use of funds, focus on affordable housing in tier 2 & 3 cities, encouraging solar panel installation, tree planting, energy-efficient lighting, water conservation, and digitalized processes. - Social: Promoting housing to underpenetrated segments, hiring from premier campuses, talent development programs, offering concessional rates to women borrowers, customer service department, paid leave, focus on employee wellbeing, fire drills, engagement activities, and learning app. - Governance: Diversified board, regulatory compliance, remuneration policy, IT strategy committee, risk management framework, policy on prevention of sexual harassment, prohibition of insider trading, and corporate governance policy. **Our Journey:** A chronological timeline highlights key milestones from 2014 (commencement of business) to 2023 (highest ever PAT). **Key Strategic Initiatives:** The strategic initiatives include growing the loan book, robust teams, improving TAT, geographic expansion, self-construction loans, completed properties, extending product bouquet, focus on self-employed and salaried borrowers, strengthening credit structure, on-boarding MO Partners, and reducing cost of funds. **Our Presence:** MOHFL has 109 locations across 12 States/UTs. **Management Discussion & Analysis:** The Management Discussion and Analysis provides an overview of the Indian economy, housing finance industry, and MOHFL's performance. It discusses the macroeconomic environment, inflation, interest rate trends, GDP growth, and the impact of the Russia-Ukraine war. It covers the regulatory landscape, including RBI's guidelines for HFCs, IRAC norms, PMAY, and the Co-Lending Model. Key aspects of MOHFL's operations are highlighted, including: - Loan approval process - The importance of strong collections - Sound liability management practices - Risk management framework - Internal controls - Business continuity plan - Digital initiatives - Human resources - Opportunities and threats. **Board's Report:** The Board's Report provides a summary of the company's performance, financial results, dividend policy (no dividend declared), and state of affairs. It covers: - Environment, Social and Governance Initiatives - Share Capital - Fund Raising/Sources of Funds: Refinance from NHB, external commercial borrowing, loans from banks/financial institutions, and securitization. - Commercial Papers & Non-Convertible Debentures - Credit Ratings - Public Deposits - Regulatory Compliance - Capital Adequacy Ratio, Statutory Reserve, Non-Performing Assets and Provisions for Contingency - Risk Management Framework - Holding/Subsidiary Company - Board of Directors and Key Managerial Personnel (KMP): Discusses the composition of the board, performance evaluation, and remuneration policy. - Employee Stock Option Scheme - Corporate Social Responsibility - The Board's report includes annexures pertaining to share capital, employee stock option scheme, CSR activities, and a policy on materiality and dealing with related party transactions. It also details credit ratings, disbursements, regulatory compliance, public deposits, and risk management. **Financial Statements:** The report contains detailed financial statements, including the Balance Sheet, Statement of Profit and Loss, Statement of Cash Flows, and Statement of Changes in Equity, along with accompanying notes. Key areas covered include: - Loans and advances - Financial assets and liabilities - Equity share capital and other equity - Impairment on financial instruments - Borrowings, debt securities, and other financial liabilities - Revenue from operations and finance costs - Income tax expense and deferred tax assets/liabilities - Employee benefits and share-based payments - Earnings per share and other comprehensive income - Related party transactions - Segment reporting and a range of financial ratios. The Independent Auditor's Report provides an unqualified opinion on the financial statements. Detailed annexures provide supplementary information on significant financial items.