Motilal Oswal arm, WestBridge-controlled lender raise fresh financing

 Motilal Oswal arm, WestBridge-controlled lender raise fresh financing

The mortgage lending arm of Motilal Oswal Group and a non-banking lender controlled by Indian private equity firm WestBridge Capital have raised financing from the US International Development Finance Corporation (DFC).

The DFC has committed a total of $90 million in financing to three non-bank lenders in India. This includes $50 million in financing to Motilal Oswal Home Finance Ltd, part of Mumbai-based Motilal Oswal Group.

The DFC financing will help the company provide long-term funding for low-income mortgages throughout India, advancing financial inclusion and economic stability in the country.

The American development bank, formerly known as OPIC, has also provided $30 million in financing for India Shelter Finance Corporation Ltd. This will help the non-bank lender fund mortgages, mostly for low-income women borrowers, in multiple Indian states, the DFC said.

ISFC was founded in 1998 but started operations in its present form in March 2010. It targeted low- and middle-income households with small-ticket home loans of Rs 300,000 to Rs 2.5 million. In March, WestBridge struck a deal of up to $60 million (Rs 435 crore) that will likely give it a majority stake in ISFC.

The DFC has also approved a $10 million loan to AryaDhan Financial Solutions Pvt. Ltd. This will enable the company to provide commodity-backed post-harvest loans to micro-, small and medium-sized enterprises across India.

AryaDhan Financial is the non-banking arm of Arya Collateral Warehousing Services Pvt. Ltd, an agri-tech startup that offers post-harvest services. Arya Collateral is backed by venture capital firms Quona Capital, Omnivore and LGT Lightstone.

The fresh financing comes three months after the DFC in March committed a total of $87 million to a bunch of private-sector lenders in India.

At the time, it had approved a direct loan of $10 million to Mumbai-based non-bank lender NeoGrowth Credit Pvt. Ltd. It had also brought $77.5 million in the form of a loan portfolio guaranty to HDFC Bank and financial institutions Avanti Finance, Maanaveeya and Samunnati.

Sumit Upadhyaya

The Capital Quest