Motilal Oswal takes charge of Aspire amid talks of rift
Co-founder of the firm says housing finance venture was affected due to selection of wrong people
Motilal Oswal, co-founder of Motilal Oswal Financial Services, has stepped up efforts to revive the mortgage business — Aspire Home Finance Corporation.
People in the know say the move came after the housing finance firm failed to take off in the anticipated manner, which created a rift between co-founders of the brokerage firm.
However, Oswal has refuted talks of a split with cofounder Raamdeo Agrawal. He said there is bound to be difference of opinion but they will always do what is best for the business.
“Spilt never came to mind as the role of both founders is quite independent. There is no scope of overlap. His (Agrawal) views will prevail on investment matters and I deal with the business aspect of the firm. However, we keep consulting each other on corporate decisions,” Oswal said in an interaction with Business Standard.
The idea of floating the non-banking finance business came from Agrawal in 2014. Agrawal had been ‘hands on’ with the Aspire management, until inefficient execution of several strategies forced Oswal to take the business under his supervision.
Oswal said he is rebuilding the whole business and a new avatar will be unveiled next year. “It was Raamdeo’s idea; he was big fan of this segment. We have not gone wrong on selecting the business, but perhaps on selecting people who did not have a holistic view of the business,” Oswal said.
He added that one has to go through a learning experience in any business. He attributed the downturn in housing business to two flaws — the credit being managed by the sales team, and lack of focus on the collection. “There was no collection vertical,” he said.
“Raamdeo has his own wisdom. He thought ‘let me aggressively disburse money first; it will come back as there are collateral assets’, but we are more of a collection organisation rather than lending. The firm is dealing with the lower-income group, which requires proper training, motivation and education,” he said.
“We have almost completed the clean-up exercise. We have seen sales growth returning and by March 2019, things will be completely different,” he added.
Oswal said the firm has now put experienced talent in place. “We had earlier relied totally upon vendors’ approval, which didn’t give us the right kind of valuation,” he said.
This overhaul comes on account of soaring toxic assets in the banking space. According to data, non-performing assets of Aspire soared from 0.58 per cent in March 2017 to 4.52 per cent in March 18. Net profit for Aspire also slumped 62 per cent during 2017-18.
Oswal and Agrawal have worked together for 30 years. The company Motilal Oswal Financial Services was set up as a brokerage in 1987.