Face Value: 5

Price Range: 725 – 825 per share

Minimum Amount: 5800 - 6600

Issue Amount: 2162.47– 2460.74 mn

The Indian financial services industry has experienced significant growth in the last few years. The Indian financial markets have considerably broadened and deepened due to various financial market reforms undertaken by the regulators. Introduction of innovative and diverse financial instruments and entry of large domestic players and sophisticated international players have triggered this growth. Non-banking financial services sector, such as equities, derivatives and commodities brokerage, residential mortgage and insurance services, where new innovative products and expanding delivery channels have helped these sectors achieve high growth rates.

Motilal Oswal Financial Services Ltd (MOFSL), is a Non Banking Financial Company (NBFC), offering a range of financial products and services such as securities and commodities broking, portfolio management services, institutional broking, venture capital management and investment banking services. Spread across 377 cities and towns, MOFSL network comprises 1,200 business locations operated by own branches and Business Associates. It has a wide client base that includes retail customer (including high-net worth individuals), mutual funds, foreign institutional investors, financial institution and corporate clients.

MOFSL is raising The funds to be raised are going to enable and improve MOFSL ‘s competitiveness in the market, enhance financing facility for broking customers, additional office space and technology advancement. Part of the issue proceeds is to be used to fund long-term working capital requirement, which primarily comprises margins to be placed with Stock Exchanges.

On a post issue basis, considering the earnings per share of . 23.3, the issue is available at price-earnings of 31.1x at the lower price band ( 725) and 35.4x at the upper price band (. 825). Considering the top financial service companies’ average P/E of 43, the valuation at which MOFSL is offered makes it attractive. Given the large and diverse distribution network, well-established brand name of MOFSL, we recommend “Subscribe” to this issue.

MOFSL is highly dependent on the brokerage income alone, which constitutes 83 % of its total income. Any slow down in the economic growth or aggressive competition from its peers may affect the future earnings of the company.