India Ratings upgrades Motilal Oswal Financial Services to 'IND AA+/Stable'
Motilal Oswal Financial Services Limited (MOFSL) announced that India Ratings and Research (Ind-Ra), a Fitch Group company, has upgraded the long-term credit rating of the company and its key subsidiaries to ‘IND AA+’ with a Stable Outlook, from ‘IND AA’ with a Positive Outlook. The upgrade applies to the non-convertible debentures (NCDs) and bank loan facilities of MOFSL and Motilal Oswal Home Finance Limited (MOHFL), and to the NCDs of Motilal Oswal Finvest Limited (MOFL). Ind-Ra has also affirmed the ‘IND A1+’ rating on the commercial paper programmes of MOFSL, MOFL and Motilal Oswal Wealth Limited (MOWL).
According to Ind-Ra, the upgrade reflects a stronger business profile, driven by the continued scale-up of its asset management and private wealth businesses, rising recurring fee-based revenue, and sustained profitability growth visibility across key operating segments. The agency noted that improved earnings diversification has reduced the group’s relative dependence on transaction-based income, while comfortable capitalisation, adequate liquidity buffers and the fungibility of liquidity across group entities provide additional financial flexibility.
“For close to four decades, we have built Motilal Oswal on one belief: that wealth is created by staying with quality through cycles. We have applied that same discipline to our own business. What began as an equity broking house is today an integrated wealth creation platform, where two-thirds of our revenue is recurring and our asset and wealth management businesses lead our profits. This upgrade is an independent recognition of that transformation. It belongs to the more than 15 million clients who trust us, to our franchise partners and to our people, and it strengthens our resolve to build an institution that compounds trust as patiently as it compounds wealth,” said Mr Motilal Oswal, Managing Director and CEO & co-founder, Motilal Oswal Financial Services Limited.
“This upgrade speaks to the quality of our earnings as much as its growth. Over the past few years, we have deliberately shifted our revenue towards fee-based, annuity-like streams while keeping our balance sheet conservative. Leverage remains comfortably below our internal threshold, net worth has grown to over Rs14,400 crore, and liquidity is managed across the group with full fungibility. A stronger rating widens our access to diversified funding and should support greater efficiency in our cost of borrowing as we scale our lending, housing finance and wealth businesses with discipline. With this rating upgrade, we are now rated AA+ from all the three leading rating agencies in India” said
Mr Shalibhadra Shah, Group Chief Financial Officer, Motilal Oswal Financial Services Limited.
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