Motilal Oswal Home Finance Limited is the housing finance subsidiary of Motilal Oswal Financial Services Limited. It is a professionally managed Housing Finance Company (HFC), focused primarily on providing affordable housing finance to Low-Income Group (LIG) and Middle-Income Group (MIG) households.The company operates across 12 Indian states, with a particular focus on Tier-2, Tier-3 and emerging urban markets. Its business philosophy revolves around financial inclusion by providing long-term housing finance to underserved Indian households, particularly customers who may have limited formal income documentation or credit histories.

Business Model

MOHFL primarily generates revenue through interest income earned on loans extended to individual borrowers and businesses against property.

Its business model can be divided into the following activities:

Home Construction Loans

Home Extension Loans

Loan Against Property (LAP)

Construction Finance

Regulatory Environment

Financial Performance

1. 1Loan Origination: Identifying and acquiring customers seeking finance for purchasing, constructing or extending residential properties.
2. 2Credit Assessment: Evaluating borrower repayment capacity through income assessment, credit bureau information, field verification and internal scoring models.
3. 3Loan Disbursement: Providing secured housing loans and loans against property, generally with long repayment tenures.
4. 4Interest Income Generation: Earning interest on the outstanding loan portfolio.
5. 5Fee-Based Income: Generating additional revenue through processing fees and other commission-related services.
6. 6Collections and Recovery: Managing loan repayments through an in-house collection infrastructure to maintain portfolio quality. Product Portfolio Home Purchase Loans Provides financing for purchasing ready-to-move or under-construction residential properties, constructing a house on owned land, and refinancing existing home loans from other banks or Housing Finance Companies (HFCs).
7. 7Loan Amount: ₹5 lakh – ₹50 lakh
8. 8Loan Tenure: 5–25 years
9. 9Offers financial assistance to individuals constructing residential properties on their owned non-agricultural land, with loan disbursements made in stages according to construction progress.
10. 10Loan Coverage: Up to 85% of construction cost
11. 11Maximum Loan Amount: ₹50 lakh
12. 12Loan Tenure: 5–25 years
13. 13Provides financing for expanding existing residential properties through the construction of additional rooms or floors, subject to approved building plans and verified construction estimates.
14. 14Loan Coverage: Up to 85% of extension cost
15. 15Maximum Loan Amount: ₹25 lakh
16. 16Loan Tenure: 5–25 years
17. 17Enables customers to leverage their existing residential property to raise funds for business working capital, education, marriage, emergencies and other financial requirements.
18. 18Loan Amount: ₹5 lakh – ₹40 lakh
19. 19Loan Tenure: 5–15 years
20. 20MOHFL also maintains a selective presence in construction finance, providing financing within the construction and housing sector. Industry Data The Indian housing finance industry presents significant long-term growth potential, driven by urbanisation, rising household incomes, increasing demand for homeownership and government initiatives supporting affordable housing. As per the industry data referenced in the company's FY26 report, India's individual housing loan portfolio stood at approximately ₹33 lakh crore in FY25 and is projected to reach ₹77–81 lakh crore by FY30, representing an expected CAGR of 15–16%. Despite this growth potential, housing loan penetration in India remains relatively low at around 16.6% of GDP, compared with 64% in the UK and 60% in the US, indicating considerable scope for expansion. Additionally, approximately 45% of HFC housing loan portfolios comprise loans of up to ₹25 lakh, highlighting the importance of the affordable housing segment. The residential real estate market has also witnessed growth, with residential sales reaching 4.6 lakh units in 2024, representing a 74% increase since 2019. The industry's growth is supported by increasing demand for affordable housing, particularly among economically weaker sections (EWS) and low-income group (LIG) households, along with migration towards Tier-2 and Tier-3 cities. Government initiatives such as the Pradhan Mantri Awas Yojana (PMAY) further support affordable homeownership. In addition, the formalisation of income through banking, GST and digital payment systems is improving access to institutional housing finance. Low mortgage penetration provides further opportunities for long-term industry expansion, while technology adoption, including digital underwriting, alternative credit assessment and automated loan processing, is helping housing finance companies improve lending efficiency. Industry Challenges
21. 21Limited income documentation among self-employed and informal-sector borrowers.
22. 22Higher credit assessment and collection costs in affordable housing finance.
23. 23Interest rate fluctuations affecting borrowing costs and housing affordability.
24. 24Competition from banks, established HFCs and fintech lenders.
25. 25Potential deterioration in asset quality during economic downturns.
26. 26The sector operates under the regulatory framework of the Reserve Bank of India (RBI), with housing finance companies subject to applicable housing finance regulations. Important regulatory developments highlighted in the FY26 report include:
27. 27Strengthened KYC and customer due diligence requirements.
28. 28Restrictions on prepayment penalties for specified floating-rate individual housing loans.
29. 29More frequent credit information reporting.
30. 30Revised project finance prudential requirements.
31. 31Enhanced related-party transaction disclosures and monitoring.
32. 32Motilal Oswal Home Finance Limited has demonstrated a recovery in profitability and growth in its operating income over the period from FY19 to FY26. The company's total income increased from ₹648.41 crore in FY19 to ₹800.82 crore in FY26, while revenue from operations grew from ₹641.47 crore to ₹800.21 crore during the same period. In FY26, revenue from operations increased by 27.03% compared with ₹629.95 crore in FY25. Interest income rose from ₹607.70 crore in FY25 to ₹719.46 crore in FY26, while fee and commission income increased from ₹19.44 crore to ₹46.90 crore, indicating higher contribution from these revenue streams. On the profitability front, the company reported an operating EBITDA of ₹214.44 crore in FY26, compared with ₹150.35 crore in FY25, while EBITDA increased from ₹171.97 crore to ₹215.05 crore. Profit before tax (PBT) stood at ₹208.60 crore, compared with ₹166.42 crore in the previous financial year. Profit after tax (PAT) increased to ₹158.84 crore in FY26 from ₹130.26 crore in FY25, registering a growth of approximately 21.9%. The PAT margin, however, moderated slightly from 19.99% to 19.83%. Finance costs increased from ₹267.50 crore in FY25 to ₹326.13 crore in FY26, while impairment losses on financial instruments rose from ₹1.65 crore to ₹15.95 crore. In terms of return ratios, the company reported a return on average equity (ROAE) of 10.46% in FY26, compared with 9.59% in FY25, while return on average capital employed (ROACE) stood at 3.67%. The debt-to-equity ratio increased from 2.60x in FY25 to 2.87x in FY26. According to the company's FY26 disclosures, assets under management (AUM) reached ₹5,829 crore, registering 19% year-on-year growth, while disbursements increased by 13% to ₹2,021 crore. The company also reported net interest income of ₹394 crore and net interest margin of 7.0% during FY26.