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
Businesses Strategy Performance Industry facts
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
Institutional Equities
PMS
DistributionMF, IPO Insurance
Investment Banking
Retail broking
Institutional Equities
DistributionMF, IPO
Retail broking
Institutional Equities
Private Equity
Lending(LAS)
PMS
Wealth Management
Retail broking
Institutional Equities
Investment Banking
Private Equity
Principal Strategies
Lending(LAS)
PMS
Wealth Management
DistributionMF, IPO Insurance
Broking Integrated Financial Services
1987 - 95 1996 - 2005 2006 - 2007 2008 2010
Retail broking
Institutional Equities
Investment Banking
Private Equity
Principal Strategies
Lending(LAS)
PMS
Wealth Management
DistributionMF, IPO Insurance
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
Institutional Equities
Broking & Distribution
Wealth Management
Asset Management
Principal Strategies
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
Businesses Strategy Performance Industry facts
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
Businesses Strategy Performance Industry facts
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
Businesses Strategy Performance Industry facts
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%
FY08 FY09 FY10 FY11 FY12
1,561
926
1,704
1,371
1,039
22%20%
26%
23% 22%
FY08 FY09 FY10 FY11 FY12
7,090 7,939
9,460 10,595 11,409
30%
12%
20%14%
9%
FY08 FY09 FY10 FY11 FY12
2,857
5,428
3,250 2,772 2,710
FY08 FY09 FY10 FY11 FY12
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%
FY08 FY09 FY10 FY11 FY12
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
Businesses Strategy Performance Industry facts
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
FY10 FY11 FY12 Q1FY12 Q4FY12 Q1FY13
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%
FY10 FY11 FY12 Q1FY12 Q4FY12 Q1FY13
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
FY10 FY11 FY12 Q1 FY12 Q4 FY12 Q1 FY13
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%
FY10 FY11 FY12 Q1FY12 Q4FY12 Q1FY13
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%
FY10 FY11 FY12 Q1FY12 Q4FY12 Q1FY13
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
FY10 FY11 FY12 Q1 FY12 Q4 FY12 Q1 FY13
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
Motilal Oswal Financial Services Limited
Tel: 91-22-3982-5500 / 91-22-39825554
Fax: 91-22-2282-3499
Email: [email protected]
Sourajit Aiyer
Sr. Manager–Investor Relations
Motilal Oswal Financial Services Limited
Tel: 91-22-3982-5500 / 91-22-39825510
Fax: 91-22-2282-3499
Email: [email protected] /
Top Related