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Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services LimitedBSE: 532892 NSE: MOTILALOFS Bloomberg:MOFS:IN Reuters: MOFS.BO

www.motilaloswal.com

Corporate Overview

Businesses Strategy Performance Industry facts

● Group Profile & Structure

● Evolution

● Our Businesses

● Our Strengths

● Corporate Governance

● Management Team

Corporate Overview


Group Profile and Structure

● Well-diversified, financial services company offering a range of financial products and services

● Focused on wealth creation for all its customers, such as institutional clients, HNWIs and retail customers

● Network spread over 548 cities comprising 1,565 business locations operated by our business partners and us with 749,745 total

registered customers

● Shares listed on the Bombay Stock Exchange and National Stock Exchange in Mumbai

99.95%

Motilal Oswal

Securities Ltd.

Institutional Equities

Broking & Distribution

Wealth Management

Motilal Oswal Investment

Advisors Pvt. Ltd.

Investment Banking

Motilal Oswal Private

Equity Advisors Pvt. Ltd.

Private Equity Fund

Real Estate Fund

93.75% 85% 99.95%*

* through Motilal Oswal Securities Limited

Motilal Oswal Financial Services Ltd. (MOFSL)

4

Data as on June 2012

Motilal Oswal Asset

Management Co. Ltd.

Portfolio Mgmt Services

Mutual Funds

Offshore Funds

Motilal Oswal Commodities

Broker Pvt. Ltd.

Commodity Broking

97.55%

Retail broking


PMS

DistributionMF, IPO Insurance

Investment Banking

Retail broking


DistributionMF, IPO

Retail broking


Private Equity

Lending(LAS)

PMS

Wealth Management

Retail broking


Investment Banking

Private Equity

Principal Strategies

Lending(LAS)

PMS

Wealth Management


Broking Integrated Financial Services

1987 - 95 1996 - 2005 2006 - 2007 2008 2010

Retail broking


Investment Banking

Private Equity


Lending(LAS)

PMS

Wealth Management


Mutual Fund

Evolution

5

Well established

DISTRIBUTION NETWORK

Independent and INSIGHTFUL

RESEARCH

STRONG RELATIONSHIPS with

institutional investors

and high net worth investors

(HNIs)

HIGH CREDIBILITY resulting in

higher cross-selling

opportunities

INTEGRATED FINANCIAL SERVICES PROVIDER

Broking &

Distribution

Private

Equity

Asset

Management

Principal

Strategies

Investment

Banking

Wealth

Management

Institutional

Equities

Our Businesses

6

Experienced Top Management

Strong Brand Name

Leadership in Franchisee Business

Large Pan-India

Distribution Network

Strong Investment

Culture

Independent and Insightful

Research

Financial Prudence

Strong Risk Management

Practices

Our Strengths

7

Corporate Governance

● MOFSL is committed to ensuring compliance with the best

practices in corporate governance

● Composition of MOFSL’s Board of Directors:

o The Board currently consists of 6 members with 50%

composition of Independent Directors

● MOFSL has six major Board level Committees :

o Audit Committee

o Shareholders / Investors Grievance Committee

o Remuneration / Compensation Committee

o Nomination Committee

o Risk Management Committee

o ESOP Committee

● External auditors play a role in providing an independent

assessment of MOFSL’s financial position

8

Independent Directors

Mr Paranjpe is a consultant in HR & strategicmanagement with companies like RelianceIndustries, Blackstone etc. He was the Director,HR Operations at HP Singapore, and hasworked with Hotel Corp, Johnson & Johnson,Hindustan Lever etc

Vivek Paranjpe

Praveen Tripathi

Balkumar Agarwal

Mr Tripathi is the CEO of Magic9 Media &Consumer Knowledge Pvt Ltd. He is theChairman of the National ConsumerClassification System Committee and has alsoworked with Pidilite, Hansa Consulting,Zenithmedia, Starcom/Leo Burnett etc

Mr Agarwal a retired IAS officer (1967 batch). Hehas served as Additional Chief Secretary,Secretary (Housing), Secretary (Transport),Secretary (Industries) to the Government ofMaharashtra, and as the MD at MaharashtraState Warehousing Corp, Maharashtra StateFinancial Corp etc

Management Team

Chairman & Managing Director

Motilal Oswal

Joint Managing Director & Co-founder

Raamdeo Agrawal

Director

Navin Agarwal

9

Ashutosh Maheshvari

Vishal Tulsyan

Vijay Goel

A.V. Srikanth

Taher Badshah

Srikanth Iyengar

Navin Agarwal

Investment Banking

Private Equity


Broking & Distribution

Wealth Management

Asset Management


Corporate Affairs Harsh Joshi

Marketing Ramnik Chhabra

Human Resources & OD Sudhir Dhar

Chief Financial Officer Sameer Kamath

Chief Operating Officer Ajay Menon

Research Rajat Rajgarhia

Building Infrastructure for the Future

10

● MOFSL has invested in a new Corporate Office building in

Prabhadevi, Mumbai with the aim to consolidate all businesses

within a single location and leverage on group synergies.

● Total built-up area is 260,000 sq feet across 12 floors at a cost of

approximately `2.80Bn (funded through internal accruals and

capitalised in balance sheet).

● Approximately 33% of the area would be let out in the initial

years of operations

● MOFSL also expects to generate additional income from the sale

of the existing owned office properties in Nariman Point,

Mumbai, (approximately 20,000 sq feet) which would partly

offset the additional capital outlay on the new property.

● Thus, MOFSL will be able to utilise significantly larger floor space

at an incremental cost. Design of the Corporate Office in Prabhadevi, Mumbai

● Broking & Distribution

● Institutional Equities

● Wealth Management

● Investment Banking

● Asset Management

● Private Equity

Corporate Overview


Retail Broking and Distribution

Growing Customer Base

● Total registered client base of 749,745, including

659,274 retail broking and distribution clients

● The ‘Customer first’ philosophy is executed

through strategic focus on:

o Increasing distribution reach and customer

segmentation on individual client’s needs

o Wide bouquet of offerings (equity, PMS, MFs )

o Customer connect through seminars, feedback

12

Pan-India Distribution Reach

● Developed a Pan-India network in 548

cities across 1,565 locations (branches +

franchisees), while ensuring the quality of

the locations at the same time

● Extensive distribution network provides

opportunities to cross-sell products

‘Knowledge First’ for Client Engagement

● Use of simplified research products which

have been customized for retail clients to

help them understand the investment ideas

and enable them to take informed decisions

● In line with the philosophy of Knowledge

First, MOSL conducts education seminars for

investors and business partners each year on

a Pan India basis. Last year, it conducted a

multi-city investor education series ‘Investor

Ki Kahani Usi Ki Zubaani’, which saw a

healthy turnout of investors in all the cities

Total Registered Clients

Retail Broking & Distribution Clients Distribution (Locations & Cities)

MOFSL offers customized investment services to retail clients, including equity & commodity broking and distribution of financial products

471,062550,401

628,012 657,119 659,274

FY09 FY10 FY11 FY12 Jun 2012

541,372621,215

709,041 746,932 749,745

FY09 FY10 FY11 FY12 Jun 2012

1,2891,397

1,644 1,579 1,565

548568 611

552 548

FY09 FY10 FY11 FY12 Jun 2012

Locations Cities

Retail Broking and Distribution

‘Partnering For Growth’ Franchisee Model

● Apart from branches, MOFSL also operates a

franchisee-based business partner model

● Some of our Business Partners have grown

manifold in terms of scale of business

● Operates ‘Upper MOST’, an interactive online

tool for business development, reward,

recognition for business partners

13

Enhancing the ‘Technology Experience’

● Developed feature-rich and user-friendly

online and mobile trading platforms

● Lite-Desktop (EXE Based Trading):

• Two-Factor Authentication for the platform

• Reduced bandwidth requirement

• One of the lightest EXE based applications

in the industry

• Rate refresh speed further optimized

● “My Motilal Oswal”, a new web service using

a unique widget framework that allows users

choose and customize the information on

the screen as per their preferences

● Portfolio Review tool

• The new Portfolio Review service

enables customers to review investments

and take steps to realign the investments

to their original financial goals

Strong Advisory Infrastructure

● Recent equity strategies like MOSt Velocity

etc saw good response from investors. This

is a structured advisory process that

recommends stocks to extract value out of

market momentum.

Institutional Equities: Research is our Strength

● Provides equity cash and derivatives brokerage services for

institutional clients

● Client base of 517 institutions including 348 FIIs, as of Mar 2012

● Strong research team comprising of 26 analysts covering more

than 175 companies across over 20 sectors and 28 commodities

● Research report portfolio encompasses economic, sector,

company and thematic studies

● Sales team supported by strong Corporate Access

14

● Won awards at the Zee Business India’s Best Market Analyst

Awards 2011 and 2012

● Won 4 awards at the ET-Now Starmine Analyst Awards 2010

placing it amongst the Top 3 award winning brokers

● Ranked 2 (Best Local Brokerage) by the AsiaMoney Brokers

Poll 2010 and 2009

● Rated No.1 (Best Recommendations Mid & Small Caps) and

won awards in 3 out of 4 categories at the Starmine India

Broker Rankings 2009 from Thomson Reuters

● Ranked 2 (Best Indian Broker 2009) by Institutional Investor

● No.1 Broker in ET Now-Starmine Analyst Awards 2009

Our Research has won Awards consistently, recent being:-

ET Now Starmine Analyst Awards 2010-2011

Award Winning Categories:

Category Sector Rank

Top Earnings Estimator Across Sectors 1

Top Earnings Estimator Financials 1

Top Stock Picker Energy 1

Top Stock Picker Real Estate 2

● The 7th Annual Conference was conducted in Aug, 2011 in

Mumbai. Over 100 leading Indian companies interacted with

over 500 institutional clients from across the world

Annual Motilal Oswal Investor Conference

Institutional Research Products

15

Sample Research Products – Providing vivid and deep insights into Indian Equities

Recent Research Reports

Annual Wealth Creation Study - 2011

16

MOSL conducts the Annual Wealth Creation thematic study, which analyzes best-

performing stocks. The 16th Annual Wealth Creation Study was conducted in Dec, 2011.

The presentation was followed by a Panel Discussion on the ‘Future of Investing’.

● The study identified Reliance Industries, Sanwaria Agro and Kotak Mahindra as the

biggest, fastest, consistent wealth creators, respectively

● It showed the contribution of the top-10 wealth creators declined from 76% in 2003

to 42% in 2011, indicating a more widespread wealth creation

Theme of this study was on ‘Blue Chip Investing – Creating Wealth from Dividends’

● Blue-chips were identified as well-established, financially sound companies

entrenched as leaders in their field, generally paying high dividends

● Rationale is that good quality companies with strong dividends offer as much, if not

more, investment potential than poor quality companies and with less risk

● Screening based on earnings and dividends history, RoE, liquidity, institutional

shareholding identified 48 potential blue-chip stocks

The 16th Wealth Creation report can be downloaded by clicking on this link

http://www.motilaloswal.com/Wealth_Creation_Study/Studies/



17

Wealth Management

● Focus on advisory and product mix that leads to Client Profitability

● Advises on in-house products like PMS, PE, MOSt funds, equity broking and third party products like mutual funds, insurance and structured

products, as well as a variety of alternate investments, specialist services and credit offerings

● Wealth management business had an AUM of `15.6 billion, as of June 2012

● 84 employees in wealth management business, as of June 2012

● The wealth management business has been strengthened with the joining of A.V. Srikanth as CEO. Prior to this, he was with Anand Rathi Private

Wealth Management, where he played a significant role in growing the vertical. He was an integral part of the team that won several accolades

for its product and advisory delivery. He also developed India’s first Multi-Manager platform in partnership with external service providers

● Present in Mumbai, Delhi, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune

Asset Structuring

• In-depth analysis of financial situation

• Tailor-made investment solutions

• Advice & support for asset structuring

• Asset financing

Wealth Management

• Strategic & tactical asset allocation

• Enhanced yield mandates

• Estate planning & property management

• Strategy funds

Investment Advisory

• Market information & macro analysis

• Product selection & recommendations

• Selection of third-party funds

• Portfolio accounting and analytics

18

Investment Banking

Recent Transactions● Strong management team with substantial experience in

investment banking, corporate banking and advisory

● Won the “Asia Pacific Cross-Border Deal” and the “India M&A

Investment Banker” awards in 2010 for the M&A transaction of

India’s Shree Renuka Sugars and Brazil’s Equipav SA

● Given our strong expertise in cross border transactions, Motilal

Oswal Investment Banking was the Lead Sponsor for the Latin

America India Investors Forum held in Mumbai in Nov 2011. This

Forum was designed to connect corporates with institutional

investors and start the process towards deals and business

relationships between India and Latin America.

● Fund-raising and deal activities remain sluggish this year due to

the global slowdown, uncertainties reg government policies,

poor performance of equity markets, and high borrowing costs

Latin America India Investors Forum 2011, Mumbai

19

Asset Management

Portfolio Management Services business (PMS)

● MOSL transferred the PMS business to Motilal Oswal AMC via

slump sale with effect from Oct 2010

● As on Jun 2012, PMS AUM was `13.9 billion

● As per SEBI data, our PMS had a market share of 8% in terms

of discretionary-listed equity PMS assets, as of Aug 2011

● Our flagship ‘Value’ strategy has significantly outperformed the

benchmark index – Nifty, consistently over shorter and longer

time periods

Mutual Funds business (MF)

● Mutual funds AUM was `4.8 billion, as of Jun 2012

o MOSt Shares M50 ETF (M50) is India’s 1st Fundamentally Weighted

ETF based on the S&P CNX Nifty Index

o MOSt Shares Midcap 100 ETF (M100) is India’s 1st Midcap ETF

based on the CNX Midcap Index

o MOSt Shares Nasdaq 100 ETF (N100) is India’s 1st US equities

based ETF, denominated in Indian Rupees

o MOSt 10 Year Gilt Fund (10 Yr Gilt) is India’s 1st fund providing

access to 10 Year benchmark Government Bond

o MOSt Shares Gold ETF is India’s 1st Gold ETF which enables

investment as well as consumption of pure gold for retail investorsPMS AUM (`Mn)

Mutual Funds AUM

4,767

9,817

12,584 13,574 13,897

FY09 FY10 FY11 FY12 Jun 2012

M50 ETF17%

Midcap 100 ETF23%

Nasdaq 100 ETF12%

10Yr Gilt Fund43%

Gold ETF5%

June 2012AUM Rs 4.8bn

Mutual Funds AUM (Rs Bn)

Motilal Oswal MOSt Shares ETFs

20

● Conducted the 2nd MOSt Shares ETF Conclave in June 2012

● The objective was to demystify ETFs for Indian investors by discussing

the advantages of ETFs and passive investing, building portfolios with

ETFs and Vanguard’s success in this space

● James Norris, MD, Vanguard International gave the keynote speech.

● This was followed by a panel discussion between James Norris, Frank

Satterthwaite (Head Corporate Strategy, Vanguard) and Anup Bagchi

(MD and CEO, ICICI Securities)

Motilal Oswal MOSt Shares ETF Conclave

● MOAMC became the first Indian AMC to ring the opening bell

at NASDAQ in USA during the launch of the Nasdaq 100 ETF

Launch of MOSt Shares Nasdaq 100 ETF

● Nasdaq 100 ETF won the ‘Most Innovative ETF Asia Pacific 2011’

award at the 8th Annual Global ETF Awards 2012 in USA

● The M50 ETF bagged the ‘Most Innovative Fund of the Year’

award at the CNBC TV18-CRISIL Mutual Fund Awards 2011

Most Innovative Fund Awards

21

Private Equity

● MOPE is an investment manager and advisor to private equity funds, acts as an advisor and mentor to the investee companies and

leverages the relationships of the Motilal Oswal group for the benefit of these companies

● India Business Excellence Fund (IBEF) is a growth capital fund with AUM of US$ 125 million, which has been fully committed across 13

companies

● India Realty Excellence Fund (IREF) is a domestic real estate fund with total AuA at `2 billion. IREF has made investments across 6 deals,

committing about 74% of its funds under management, as of June 2012

● MOPE achieved commitments of `4.9 billion from both domestic and offshore investors after the second closing of its 2nd sector-agnostic

growth capital PE fund, India Business Excellence Fund-II (IBEF II)

● MOPE also organized Annual Investor Meets for its IBEF and IREF in May 2012

Investment Process Nurturing Process

● Size of opportunity

● Our Strategic Focus

● Progress Against Strategy

Corporate Overview


32

24380

454

FY 2010 FY 2020E

Institutional (Rs Bn) Retail (Rs Bn)

697

112

6.2x Growth

Size of Opportunity

23

Methodology:

● Current size of broking revenue pool estimated at `112Bn

● Market Cap to touch US$5Tn by 2020 based on GDP:Market Cap ratio of 1:1

● Assume trading velocity to double from current 37% to ~80% by 2020

● This gives a expected market size of ~`697Bn by 2020, comprising `243Bn

in institutional and `454Bn in retail segment

Source: MOSL estimates

Factors that will help achieve this growth What Motilal Oswal is doing to create scale

India’s equity broking opportunity: Market size in terms of revenue pool expected to grow 6 times over the next 10 years

Although certain external risks remain

● Sustained economic, savings and

discretionary income growth

● Increase in retail participation

● Increased ability of DIIs to mobilize

savings

● Higher India allocation by global funds

● Increase in fund raising by corporates

● Higher issues of fairly priced IPO/FPOs

● Tech-based tools for client’s convenience

● Increasing distribution reach across India

● Using simplified research products

● Client focused advisory services

● Investor education for client engagement

● Tap the allocation of India focused funds

● Launched AMC to mobilize investments

● Develop relationships with corporates

embarking on the next phase of growth

● Technology for better client experience

● High inflation and interest rates

● Regulatory changes required DIIs to

realign their marketing strategy to

be able to channelize higher savings

● Global recovery reducing India’s

relative attractiveness among global

funds

● Poor performance of IPOs post

listing

Risk-Free Balance Sheet and

Flexible Cost Structure

Increase

Institutional

market share

Increase Retail /

Wealth Mgmt share

Our Strategic Focus

24

● Leverage research and advisory capabilities

● Investor education and knowledge dissemination

● Good quality Pan-India distribution network

● Strengthening Wealth Mgt’s product

bouquet and customized advisory

● Leveraging on technology

● Distribution of 3rd party products

● Develop innovative, market-access products

for the AMC platform

● Grow the Investment Banking business

● Ensure quality deal flow for Private Equity

● Increase Research support

● Build strong institutional relationships

through wider and quality research

● Grow institutional derivatives business

● Use Principal Strategies Group to maximise

returns using risk free arbitrage strategies

● Grow the Capital Markets Lending book

across client segments to complement our

strong cash equities business

● Judicious use of Capital to ensure high Return on Equity and low Leverage

● Flexible Cost structure to maintain Profitability across market cycles

KNOWLEDGE FIRST

Solid Research

Solid Advice Grow

Fund based

revenues

Grow

Fee based

revenues

Progress Against Strategy

25

Research

Consistently won awards for earnings estimation and best

recommendations, thus showcasing our strong research

capabilities

Investor Awareness on Equity Investing

Continued its investor education initiatives and use of

simplified versions of institutional research for the retail

investors, in line with the Knowledge First philosophy

Retail Distribution Reach

Grew the Pan-India distribution presence further, currently

stands at 1,565 locations across 548 cities

Empanelment of Institutions

Added to the number of domestic and foreign institutions

empanelled

Corporate Access

The Annual Motilal Oswal Investor Conference is

reckoned as one of the best-in-class conferences in India

for institutional investors

Technology Tools and Platforms

Successfully developed and implemented a number of tech-

based initiatives, including in-house developments

Private Equity businesses

Strong on-ground relationships helped achieve a healthy

portfolio for existing funds and ensure good mobilization for

the new fund

Consistent Margins and Low-Risk Balance Sheet

Flexible cost structure and negligible debt levels helped

deliver consistent profit margins and strong RoE, despite

market cycles

Wealth Management Product Bouquet

Strengthened Wealth Management’s product portfolio to

offer multiple investment options and a holistic asset

allocation for clients

Asset Management business

Launched 5 innovative mutual funds, all of which were

India’s Firsts in terms of the market access provided by the

investment products strategies

● Financial Performance

● Recent Awards

Corporate Overview


Annual Financial Performance at a Glance

27

Consolidated revenues (` million) EBIDTA (` million, margin %) Reported PAT (` million, margin %)

Net worth (` million); Return on Avg NW (%) Net Cash (` million) Revenue Composition (%)

6,995

4,661

6,4536,008

4,655

FY08 FY09 FY10 FY11 FY12

2,696

1,807

2,770

2,295

1,562

39% 39%43%

38%

34%


1,561

926

1,704

1,371

1,039

22%20%

26%

23% 22%


7,090 7,939

9,460 10,595 11,409

30%

12%

20%14%

9%


2,857

5,428

3,250 2,772 2,710


80%70% 71% 72% 69%

9%

10% 10% 7%2%

5%14% 10% 13%

18%

4% 5% 6% 7% 11%

2% 2% 3% 2% 1%


Others Asset management fees

Funds based business Investment banking fees

Broking & operating income

Latest Quarter Performance

E & EOI = Exceptional items & Extraordinary items, EOI = Extraordinary items

28

Particulars Q1 FY13 Q4 FY12 Q1 FY13 Q1 FY12 FY12

`million Jun 30,

2012

Mar 31,

2012

Jun 30,

2012

Jun 30,

2011

Mar 31,

2012 Brokerage & operating income 693 894 -22% 693 770 -10% 3201

Investment banking fees 27 38 -29% 27 22 25% 86

Fund based income 209 225 -7% 209 209 0% 822

Asset Management Fees 155 130 19% 155 103 50% 504

Other income 10 0 nm 10 15 -38% 42

Total Revenues 1093 1287 -15% 1093 1119 -2% 4655

EBIDTA 366 406 -10% 366 348 5% 1562

PBT (before E & EOI) 298 344 -13% 298 312 -5% 1396

Reported PAT (after E & EOI) 202 217 -7% 202 212 -4% 1039

Adjusted PAT 202 296 -32% 202 212 -4% 1028

Operating costs% 25% 27% 25% 24% 25%Personnel costs% 23% 25% 23% 25% 24%Others% 19% 17% 19% 20% 17%EBIDTA% 34% 32% 34% 31% 34%PAT% 19% 17% 19% 19% 22%Adjusted PAT% 19% 23% 19% 19% 22%

Change

(%)

Q-o-Q

Change

(%)

Y-o-Y

Balance Sheet

29

MOFSL’s strategy of maintaining low gearing has helped sustain

strong performance in the high interest rate scenario

`million As on Jun 30,

2012

As on Mar 31,

2012

As on June 30,

2011

Sources of Funds

Networth 11,633 11,409 10,840

Loan funds - - 195

Minority interest 29 44 52

Deferred tax liability 48 47 -

Total 11,710 11,500 11,087

Application of Funds

Fixed assets (net block) 3,291 3,445 2,985

Investments 1,103 941 742

Deferred tax asset - - 12

Current Assets (A) 11,287 11,062 11,139

- Sundry debtors 2,347 2,478 2,666

- Stock-in-trade 2,626 1,574 2,291

- Cash & Bank Balances 1,694 2,710 1,799

- Loans & Advances 4,589 4,253 4,202

- Other Assets 32 46 181

Current liabilities (B) 3,971 3,948 3,791

Net current assets (A-B) 7,316 7,114 7,348

Total 11,710 11,500 11,087

`million As on Jun 30,

2012

As on Mar 31,

2012

As on June 30,

2011

Networth 11,633 11,409 10,840

Debt (A) - - 195

Cash & Bank balances (B) 1,694 2,710 1,799

Net cash (B - A) 1,694 2,710 1,605

Debt : Equity 0.00x 0.00x 0.02x

Cash (% Networth) 15% 24% 17%

Recent Awards

30

‘Best Equity Broking House’ award for FY11

at the Dun & Bradstreet Equity Broking Awards

2011

‘Best Capital Markets and Related NBFC’ award at

the CNBC TV18 India Best Banks and Financial

Institutions Awards 2011

‘Excellence in HR through Tech’ and ‘Excellence in Healthcare’ awards at Asia’s Best Employer

Brand Awards 2011 in Singapore

‘Most Innovative Fund of the Year’ award at the

CNBC TV18-CRISIL Mutual Fund Awards 2011 for the

M-50 ETF

'Best Performing National Financial Advisor Equity

Broker' award at CNBC TV18 Financial Advisor Awards

2012, for the 2nd year

Investment Banking bagged ‘Asia Pacific Cross-Border

Deal of the Year’ and ‘India M&A Investment Banker’

awards

Ranked as No. 1 Broker in India at the ET-Starmine

Analyst Awards, 2009

Felicitated by BSE for being Amongst the Top Five

Performers in BSE Star –Mutual Fund and Amongst the Top Ten Performers in

Equity Segment for the period Nov 2010 – Sept 2011

‘Best Equity Broker’ award at Bloomberg

UTV Financial Leadership Awards 2012

‘Best Use of PR in Financial Services’ award at the India

PR & Corporate Comm Awards 2012

‘Retailer of the Year (Banking & Financial

Services)’ award at the Retail Excellence Awards

2012

Exisiting Businesses: Retail Broking and Distribution, Institutional Equities

New Businesses: NBFC, Asset Management and Investment Banking Corporate Communications and Human Resources

Nasdaq 100 ETF won the ‘Most Innovative ETF Asia Pacific 2011’ award at the

8th Annual Global ETF Awards 2012 in USA

‘Best Employer Brand’ Award at the IPE Banking,

Financial Services & Insurance Awards 2012

● Indian Long Term Economic Growth

● Capital Markets

● Equity Participation

● Investment Banking & Private Equity

● Mutual Funds

● Wealth Management

Corporate Overview


India’s Long Term Growth Story a Boon for Financial Services

32

451

1,314

4,870

FY 2000 FY 2010 FY 2020E

India GDP (US$ Bn)

11% CAGR

14% CAGR

India’s nominal GDP estimated to triple from current levels to reach ~US$5 Tn by 2020

Indian GDP outperformed both emerging and advanced nation groups; Inflation receding

Indian GDP is also projected to continue outperformance, close the gap with China

Source: IMF dataSource: MOSL estimates

Proportion invested into equities is still low - indicating headroom for growth

…This translates into cumulative decadal savings of over US$10 trillion for the decade to 2020

A high savings oriented country, India’s gross savings to increase to 40% of GDP by 2020…

232467

1,94832%34%

40%

FY 2005 FY 2010 FY 2020E

India's GDS (US$ Bn) % to GDP

15% CAGR

15% CAGR

Source: RBI dataSource: MOSL estimatesSource: MOSL estimates

0.8

2.7

11.3

1990s 2000s 2010s

US$ 2 Trillion

US$ 9 trillion

37% 39%51% 48%

13% 15%

17% 23%8% 9%

9%12%

5% 2%

7%1%36% 35%

15% 16%

FY00-FY02 FY03-FY05 FY06-FY08 FY09-FY11

Others

Shares & Debentures

Currency

Life Insurance Fund

Bank Deposits

Source: IMF data

-4%

0%

4%

8%

12%

2009 2010 2011

India inflation (avg consumer prices) China GDP

Advanced econ GDP India GDP

Emerging/developing econ GDP

GDP 5 year CAGR – 2011-2016P

4%

9%

11% 10%

2016

5 year projected CAGR - 2011-2016

Advanced Emerging/developing China India

Strong Performance in Indian Equity Markets

33

27137

24751

145

304

FY 2000 FY 2005 FY 2010

IPOs Listed Issuers (FPOs)

282

551

78

29% CAGR

14% CAGR

Source: ICI Factbook 2012, AMFI

Source: WFE data

Source: SEBI Source: SEBI Handbook 2010

Source: BSE data Source: WFE, BSE, IMF data

Following its economic growth, India’s equity market cap ($Bn) has grown at a brisk pace

India is now rising in significance in the global context on a proportion basis

As India’s equities market grows, its trading velocity will align towards global markets

Participation in Indian equities was led by increasing trend in FII net inflows ($Bn)

…increased mobilization via primary markets (`Bn) which boosted retail participation…

…And India’s MF assets, which has been growing in its proportion to world MF assets

1.5%

0.4%

1.8%1.6%

2.6%2.1%

India's share in World GDP

BSE's share in World Mcap

India's Share to World Average

2001

2006

2011

1.690.52

8.70 9.8211.03

5.57

13.29

-10.39

23.24 24.16

9.12

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

139%69%

194%

160%

57%

0%

50%

100%

150%

200%

250%

300%

2001 2003 2005 2007 2009 2011

USA (NYSE Euronext) UK (London SE)

Korea (Korea Exchange) China (Shanghai SE)

India (BSE & NSE)

Options leads growth in equity market volumes, yet again

34

5% 4% 3% 3% 3% 2%

19%10%

7% 8% 8% 5%

39%29%

22%23%

23%17%

37%57% 68%

67%

67%75%

FY10 FY11 FY12 Q1FY12 Q4FY12 Q1FY13

Options Futures Intraday Delivery

50 50 39 40 43 32176 133 101 101 117

86

374 388 315 301

342 277

350

764 977

892

1,002

1,198


Options Futures Intraday Delivery

950

1,335

1,4311,334

1,5041,594

Source: NSE, BSESource: NSE, BSE

Source: NSE, BSESource: NSE, BSE

With options volumes increasing further, it comprised 75% of overall market volumes in Q1FY13, while cash reduced to just 7%

Equity market volumes in Q1FY13 up with growth in the options segment, while delivery, intraday and futures saw a decline (`Bn)

With the continued decline in futures and increase in options, the proportion within F&O is further skewed towards options

Within cash segment, the proportion of high-yield delivery to overall cash volumes has held constant

27%

73%Q4FY12

27%

73% Q1FY13

Delivery to Cash Volumes Intraday to Cash Volumes

25%

75%Q4FY12

19%

81%Q1FY13

Futures to F&O Volumes Options to F&O Volumes

Participants’ proportions flat despite cash vol drop; FII see net outflows

35

57% 56%51% 53% 50% 50%

25% 22%23%

22% 25%25%

12% 15% 18% 18% 17% 17%

6% 7% 8% 7% 8% 8%


DII FII Prop Retail

14.2 15.2 17.2 19.0 20.0

1.02.0

1.80.9 0.2

FY09 FY10 FY11 FY12 Jun-12

Existing Accounts (Mn) New Accounts (Mn)

9% CAGR

Flat QoQ performance in the benchmarks and worries over GAAR regulations impacted FII sentiments towards India (`Bn)

Source: NSE

DIIs, despite posting net inflows in 4 out of the last 5 quarters, are still in negative territory in terms of total net flows in this period (`Bn)

Source: SEBI

While volumes of each participant segment in the cash market has declined this quarter, their proportions remained largely unchanged

Growth in new demat accounts (Mn) slowed down coinciding with muted retail participation and slowdown in primary market activity

Source: CDSL, NSDL

Source: NSE, BSE

1,102 1,101

437

52

440

-20

FY10 FY11 FY12 Q1 FY12 Q4 FY12 Q1 FY13

242

-187 -5334

-22127


ECM down; PE dips slightly; Domestic bonds/loans pull up DCM

36

35% 30%38%

30%

54%41%

5%1%

0%1%

0%

52%53% 39%

47%

31%47%

8% 16% 22% 22%14% 12%


Loans Mandated (For) Loans Mandated

FCCB Dom Bonds

4,641 5,838 5,093 1,087 1,040 1,285

15% 29% 12% 10%4% 11%

5%

5%

13% 19%

1% 2%

49%36%

68%69%

89%87%

22% 21%

4%3% 5% 0%9% 9% 4%


Overseas Eq Offerings QIP

Additional (FPO) Rights

IPO

1,694 1,155 508 227 202 45

259

447407

125 103 101

0.86

1.16

0.910.99 1.00 0.98


Deal Value (Rs Bn) Average Deal Size (Rs Bn)

Source: Bloomberg League TablesSource:

Bloomberg League Tables

Source:: Venture Intelligence

Debt raising saw a slight increase on QoQ and YoY basis due to higher INR loans and domestic bonds volumes resp (`Bn)

Equity raising continued to remain sluggish, with FPOs being the only segment that saw decent volumes, though at lower levels too (`Bn)

PE deal values and avg value per deal marginally dipped as market conditions impacted fund raising plans, valuations and exits (`Bn)

M&A deal value in H1 CY12, down on a YoY basis, improved from H2 CY11 mainly owing to the Sesa-Sterlite merger in the Jan-Mar

quarter (`Bn)

37%

12% 13%

72%

45%

25% 19%

9%

18%

64% 68%

20%

CY10 CY11 H1CY11 H1CY12

Domestic Outbound Inbound

2,227 1,974 1,382 1,224

Source: Grant Thornton

Equity mutual funds assets hit; Gold ETFs boost India ETF AuM

37

0.70.5

1.2

1.7

2.20.09%

0.05%

0.09%

0.12%

0.14%

2008 2009 2010 2011 Jun-12

India ETF AUM ($Bn) India ETF % to Global ETF AUM

28% 35% 36% 34% 28%

47%51% 49% 50%

46%

22%13% 12% 14% 23%

3% 1% 2% 3% 3%

FY09 FY10 FY11 FY12 Jun-12

Gilt, Gold & Others Liquid / Money Market

Income Equity

4,173 6,140 5,923 5,872 6,888

Source: AMFI

Mutual fund AuM picked up this quarter mainly owing to Liquid funds, as interest in Equities and FMPs waned a bit (`Bn)

Gold ETFs lead the growth in Indian ETF AuM; Its proportion to global ETF assets continues to grow since last 3 years (US$ Bn)

Source: Karvy Wealth report 2011 Source: Karvy Wealth report 2011

Individual wealth in India expected to reach `249Tn over the next 5 years

Individual wealth in India is estimated at `86.4Tn in FY11, led by the fixed deposit/bonds, equity and insurance sectors

Source: Bloomberg/Blackrock report

This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or

solicitation for the purchase or sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your

responsibility alone and MOFSL and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences

of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein,

but do not represent that it is accurate or complete. MOFSL or any of its subsidiaries or associates or employees shall not be in any way

responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this publication. The

recipient of this report should rely on their own investigations. MOFSL and/or its subsidiaries and/or directors, employees or associates may have

interests or positions, financial or otherwise in the securities mentioned in this report.

Thank You

Contact:

Sameer Kamath

Chief Financial Officer


Tel: 91-22-3982-5500 / 91-22-39825554

Fax: 91-22-2282-3499

Email: [email protected]

Sourajit Aiyer

Sr. Manager–Investor Relations


Tel: 91-22-3982-5500 / 91-22-39825510

Fax: 91-22-2282-3499

Email: [email protected] /

[email protected]

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