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• MOFSL is one of the leading financial services provide of all sort under one roof.
• It posted a minor setback for FY23, but appears to be on track with 9M-FY24 performance.
• This is the maiden debt offer from the company with AA/Stable ratings from CRISIL and IND RA.
• As of December 31, 2023, its current equity has good support with good reserves.
• Investors may park funds for the medium to long term steady returns.
ABOUT COMPANY:
Motilal Oswal Financial Services Ltd. (MOFSL) is one of the largest full-service brokers in India with highest gross brokerage revenue as of March 31, 2023, amongst players in the broking industry (Source: CRISIL Report). Motilal Oswal Group offers a diversified range of financial products and services such as retail broking and distribution, institutional broking, investment banking, asset management, private equity, wealth management and housing finance. The Company acts as a stock-broker and commodities broker for clients comprising of retail customers (including high net worth individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients.
MOFSL's broking and allied services are offered through its (i) network of over 2,500 Business Locations spread across over 550 cities in India as of March 31, 2024; (ii) online and digital platforms including mobile applications; and (iii) network of over 8,000 Business Associates spread over various locations in India as of March 31, 2024. The Company has had more than one crore download of its mobile applications as of March 31, 2024, which enabled clients to avail services digitally. Its customer outreach spans across approximately 98.00% pin codes in India as of March 31, 2024.
Motilal Group advised over 0.70 crores clients as on March 31, 2024 and had assets under advice over Rs. 4,40,123.09 crores as of December 31, 2023. This widespread reach has enabled the Motilal Group to enhance its assets under advice by 31.91% CAGR over the period from Financial Year 2021 to December 31, 2023. The Company started operations in 1987 as a provider of sub-broking and prudential portfolio services and has over 37 years of experience in broking and distribution industry. The Equity Shares of MOFSL were listed on BSE and National Stock Exchange of India Limited in September 2007. The Company is registered with SEBI under the Stock Brokers and Sub Brokers Regulations, 1992 and is a member of BSE, NSE, MCX and NCDEX.
The Company is registered with CDSL and NSDL in the capacity of depository participant. It is also registered with SEBI in capacity of a research analyst and with other regulatory agencies inter alia including IRDAI, Association of Mutual Funds in India, RERA, CERSAI, KYC Registration Agencies and NSDL Database Management Limited. The Company has a Pan-India presence with domestic offices in 22 states including two union territories and one international representative office and employed 7,927 employees as of March 31, 2024. The Company provides broking services across the states through its online and digital platforms, along with vast network of Business Locations and Business Associates, which are integrated with each other enabling clients to have a seamless trading and investment experience, positioning MOFSL to benefit from the development of Indian financial market, increased emphasis on digitization and growth in returns from such financial investments.
ISSUE DETAILS:
The company is coming out with its maiden debt offer of Rs. 1000 cr. consisting the base issue worth Rs. 500 cr. and a green shoe option to retain oversubscription of Rs. 500 cr. Overall, the company will be issuing 10000000 Secured, Rated, Listed, Redeemable Non-i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE and NSE.
The company is spending Rs. 19.70 cr. for this debt issue and from the net proceeds, it will utilize at least 75% for the purpose of meeting working capital requirement and repayment of existing liabilities and maximum up to 25% for general corporate purposes.
The company is offering a coupon rate ranging from 8.85% to 9.70% based on the series opted by the investors and has tenors of 24 months, 36 months, 60 months and 120 months. The interest payment will be done Monthly, annually or cumulative. The company has allocated 10% for Institutional Investors, 10% for Non-Institutional Investors, 40% for HNIs and 40% for Retail investors. The allotment will be made on "First Come - First Served" basis.
This debt offer is jointly lead managed by Trust Investment Advisors Pvt. Ltd., Motilal Oswal Investment Advisors Ltd., and Nuvama Wealth Management Ltd., while Link Intime India Pvt. Ltd. is the registrar to the issue, and Beacon Trusteeship Ltd. is the Debenture Trustee.
CREDIT RATING:
This issue is rated CRISIL Aa/Stable by CRISIL Ratings Ltd. and IND AA/Stable by India Ratings and Research Pvt. Ltd. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The rating provided by CRISIL and India Ratings may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. This rating is not a recommendation to buy, sell or hold securities and investors should take their own decisions.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 4316.41 cr. / Rs. 1310.73 cr. (FY22), and 4197.12 cr. / Rs. 932.82 cr. (FY23). For 9M of FY24 ended on December 31, 2024, it earned a net profit of Rs. 1721.01 cr. on a total income of Rs. 4972.36 cr.
Its debt equity ratio of 1.52 as of December 31, 2023, will stand enhanced to 1.64. Asa of December 31, 2023, its current paid-up equity capital of Rs. 14.85 cr. is supported by free reserves of Rs. 8252 cr.
Review By Dilip Davda on April 20, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The Motilal Oswal Financial Services NCD April 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if Motilal Oswal Financial Services NCD April 2024 worth investing. The Motilal Oswal Financial Services NCD April 2024 Note sets the NCD expectations in systematic way which tells you if Motilal Oswal Financial Services NCD April 2024 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in Motilal Oswal Financial Services NCD April 2024 by providing NCD recommendations i.e. subscribe, avoid and neutral.
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