Summer Internship Project 

on

MOTILAL OSWAL FINANCIAL SERVICE LIMITED

  Submitted in Partial fulfillment of PGDM

Program 2020-22

Submitted by:

Sahil Rana
28/072
Faculty Mentor: Dr. Sudhi Sharma (Associate Professor at Apeejay School
of Management)

Corporate Mentor:  MR. Vivek Singh (business partner-Motilal Oswal

financial services limited)
 INTERNSHIP CERTIFICATE

Certificate from Corporate Mentor

CERTIFICATE BY STUDENT
 ACKNOWLEDGMENT

I would like to express my sincere gratitude to everyone who supported me and advised
me throughout the course of my internship. I am sincerely grateful to them for sharing
their truthful and illuminating views on this project.

I am especially thankful MR. Vivek Singh for giving me the opportunity to do my

summer internship with Motilal Oswal Financial services. I want to express my deep
gratitude towards my mentors, who have been a great support and a source of
inspiration throughout my internship. This project would not have been possible without
their valuable advices and supervision.

I would also like to thank my faculty mentor Dr. Sudhi Sharma Associate Professor,
Apeejay School of Management for her constant guidance and inspiration.
 EXECUTIVE SUMMARY

Motilal oswal Securities Limited is a stock broking firm which produces large variety of
financial products and services to satisfy its customers. It provides services to following clients
such as: broker, sub-brokers, individual investors etc. I have done my internship in finance
department of the company as finance intern. The period for my internship was from 15th April to
15th July.

I have performed various tasks related to follow up with the executives. Dealing with distribution
of variety of financial products for various clients. Through this internship, I have learnt how to
manage tasks/projects and learn how to carry myself in a professional environment. This
internship gave me a lot of experience and insight in the working class. It helped me in
enhancing my communication skills as well as gain ample amount of knowledge in the field of
stock market.
S. NO.  TOPIC PAGES

I  Area of Internship and Learning Objective  8

II  Profile of Organization  14

III  Job Description and Functional Profile  21

IV  Business process Learning, Experience & the Insight Gained, business analysis 26

V  Recommendations & Conclusion 45

CHAPTER 1: THE AREA OF INTERNSHIP AND LEARNING

OBJECTIVE

DETAILS OF THE INTERNSHIP

I have done my summer internship in one of the branch of Motilal Oswal financial services
limited located at Gurugram. I went there for a walk-in interview and I got selected after the
interview. In the interview the basic questions about the stock market and investment were asked
and after that I got selected as a finance intern.

This summer internship programme was of 3 months. I was very excited to work with company
as it is a very reputed and big name in the field of financial services. these three months of the
internship seemed to be very productive to me. I learned a lot more things related to financial
market especially related to derivatives.

Motilal Oswal financial services limited is an Indian diversified financial services firm offering a
range of financial products and services. It was founded by Motilal Oswal and Ramdeo Agarwal
in 1987. The company is listed on both BSE and NSE.

AREA OF INTERNSHIP

My area of internship is related to the financial market and its various instruments such as cash-
equity market and derivative market. At the time of the joining, they assign me the following
task which I have to perform during my internship as a financial intern.

 Making presentation on company analysis

 Working on given projects
 Opening of D-mat accounts
 technical analysis
 client’s portfolio restruction

LITRATURE REVIEW ON STOCK MARKET

A number of studies have established a positive relationship between economic growth and stock
market development. It has been supported by several empirical studies such as those of Atje and
Jovanovich (1993), Levine and Zervos (1993, 1998), Rousseau and Wachtel (2000) and Beck
and Levine (2004). Atje and Jovanovich (1993) showed that stock markets have long run impacts
on economic growth by manipulating liquidity, risk diversifications, acquisition of information
about firms, corporate governance and savings mobilization. These studies suggest a strong
positive relationship between stock market development and growth rates of real GDP per capita
although they have failed to discuss the importance of stock market development, banking sector
development and economic growth in an integrated framework. The works of Levine and Zervos
(1995) and Demirguc- Kunt (1994) show that stock markets and banking sector development can
give a big boost to economic development. Rousseau and Wachtel (2000), Beck and Levine
(2004) were also of the opinion that with a well -functioning financial sector or banking sector,
stock markets can give a big boost to economic development.

The ways in which stock market development can bring about economic growth has been studied
in a number of studies. A few of them have been elaborated here. Greenwood and Jovanovic
(1990) and King and Levine (1993) found that the provision of timely and accurate information
about the firms to the investors has increased the investors’ risk adjusted returns considerably.
This view was also supported by Kyle (1984), Holmstrom and Tirole (1998), Stiglitz and Weiss
(1981) as their studies also found that market efficiency improves by delivering timely and
accurate information to the investor. In addition to this, the stock markets also allocate funds to
the corporate sector which has a real effect on economic growth. (Mirakhor and Lillanueva,
1990). North (1991) found that the stock market also lowers the cost of transferring the
ownership encouraging the investors to invest in equity markets and thereby increase economic
growth. According to the work of Bencivenga and Smith (1992) stock markets can also bring
about economic growth by decreasing liquidity assets holdings and increasing the physical
capital growth rate in the long run. Greenwood and Smith (1997) found that the large stock
markets lessen the cost of mobilizing savings. Obstfeld (1994a; b) in his study found that
international integrated stock markets increase investor risks but this is compensated by the
opportunities to investors to diversify investment internationally. Mishkin (2001), Corporale et
al., (2004) found that stock markets facilitate economic growth by raising investment
opportunities in the country by recognizing and financing productive projects, allocating capital
efficiently, mobilizing domestic savings, diversifying risks and facilitating exchange of goods
and services. Paudel (2005) found that the liquidity of stock markets facilitates firms to attain the
much-needed capital quickly thereby facilitating capital accumulation, investment and growth.

According to Levine and Zervos (1996), stock market liquidity was found to be a robust
predictor of real per capita GDP growth after controlling for initial income, initial investment in
education, political stability, fiscal policy, openness to trade and macroeconomic stability. They
also found that the remaining stock market development proxies do not show a robust link with
long run growth. That is, market size, international integration, capital accumulation,
productivity, improvements, and private savings rates and in particular, volatility were not found
to be robustly linked with growth in their framework. Their study showed that liquid equity
markets were the solution for the 35 problems of long-term investment blocking their savings for
long periods. This is because these markets provide such assets which can be sold easily and
inexpensively by the investor. Also, the firms can have permanent access to capital raised
through equity issues. Also in well-developed stock markets, liquidity risk is low due to which
investors do not hesitate to invest in long term promising projects. In this case, the investors can
sell their stocks at any time and with minimal effect on actual investments. This enables the
retention of capital within firms which will not get prematurely removed to meet short term
liquidity needs. Beck and Levine (2004) was an improvement of the study of Levine and Zervos
(1998) wherein the moving average panel data of 40 countries over 5 years while controlling for
many other growth determinants, used the generalized method of moments technique to estimate
the problem. The study by There are also other studies by Bencivenga et al., (1996) and Levine
(1991) which emphasized the importance of stock market liquidity and size for economic
growth. Arestis, Demetriades and Luintel (2001) examined the relationship between stock
market development and economic growth while controlling for the effects of banks and stock
market volatility using the time series method on five developed countries. Their findings were
consistent with that of Levine and Zervos’s finding for three countries only. The other two
countries showed that bank based financial systems promoted long term growth more than stock
markets. Levine (2003) also gave an insight into the ambiguous predictions of the relationship
between stock market liquidity and economic growth. He analysed the cross-country evidence on
the association between total value of stock transactions divided by GDP and the average
economic growth rates over the period 1976-1993. The results showed a strong positive
relationship between long run economic growth rate and stock market liquidity. The positive
relationship was found to hold good even when there are changes in the information used. Apart
from liquidity, global risk diversification is another major function of stock markets. Saint Paul
(1992), Deveraux and Smith (1994) and Obstfeld (1994a; b) found that stock markets provide
opportunities for risk reduction through global diversification. It enables the investors to take
optimal investment decisions through the process of equilibrium pricing as well as the provision
of easily and publicly available information 36 ultimately leading to the better allocation of funds
among corporations. Consequently, a higher economic growth can be achieved.

Conclusion: It can be easily seen empirical evidence in the context of Indian capital
markets is still inconclusive and remains ambiguous. The pace of economic reforms and rapid
integration with the world economy has significantly improved the importance of capital markets
in India. Over the years, the Indian capital market system has undergone major fundamental
institutional changes which resulted in reduction in transaction costs, significant improvements
in efficiency, transparency and safety. All these changes have brought about the economic
development of the economy through stock markets. In the same way, economic expansion
fuelled by technological changes, products and services innovation is expected to create a high
demand for stock market development
 LEARNING OBJECTIVES

MY OBJECTIVE BEHIND THE SIP AND THIS PROJECT EXERCISE WAS

TO GET THE INSIGHTS OF FINANCIAL MARKET AND ITS
INSTRUMENTS.

Following are my learnings:

 opening of a D- mat account.

Dematerialization account is necessary for trading without it trading is not
possible through a stock broker.

 Functions of primary and secondary market

 Primary market is the main market where firms sell (floats) there share
initially. Initial public offering is one of the examples of primary market.

Secondary market is place where securities are trade once it is listed. The
trading is done between the buyers and the sellers. Secondary market is also
known as stock market.

 Trading vs investing
Investing is when a person holds his/her position for a long period generally
over 1 year to gain profit.

Trading is when a person wants to gain profit by buying and selling of the
share in a short period. Generally, there are 3 types of traders
- Intraday traders (buying & selling with in the same day)
- Swing traders (holding period few days to few weeks)
- Positional traders (holding period few weeks to few months)

 Mutual funds and sip’s

Mutual funds are financial vehicle used to pool funds from many investors
then a fund manager invest this fund in various securities.
Sip is the systematic investment plans kind of recurring deposits through
which on can invest in mutual funds

 Derivatives
Are the financial instruments which derive their value from an underlying
asset.

 Option premium
It is an income for option seller and a cost for option buyer.
Premium consist of intrinsic value as well as time value
 CHAPTER 2: PROFILE OF THE ORGANISATION

INTRODUCTION:

Motilal Oswal Financial Services (MOFSL) was founded in 1987 by MR. Motilal Oswal and
MR. Ramdeo Aggarwal.
 MR. MOTILAL OSWAL

MR. RAAMDEO AGGARWAL

In just three years Motilal Oswal became members of on The Bombay Stock Exchange (BSE).
The company started offering derivatives products and advisory services on both BSE as well as
NSE in year 2001. In 2006 the company entered private equity and investment banking. In the
same year, Motilal Oswal group acquired South Indian brokerage firm – Peninsular Capital
Markets The company tied up with State Bank of India and Punjab National Bank in 2006 and
2007 to offer online trading to its customers.

2008 saw the company create One of India's largest Equity dealing and advisory rooms, spread
over 26,000 sq ft (2,400 m2) in Malad, Mumbai.

In January 2010, Motilal Oswal Financial Services (through its subsidiary Motilal Oswal
Securities Ltd.) received the final certificate of registration approval from Securities and
Exchange Board of India (SEBI) to set up a mutual fund business in the country. MOAMC
(Motilal Oswal assets management company) is a 100% subsidiary of Motilal Oswal Securities
Limited.
It provides investment management and advisory services to investors based within and outside
India and having portfolio management services business, ETFs and mutual funds.

Motilal Oswal Asset Management Company Ltd, one of the fastest growing asset management
Companies in India and has recently crossed the $1 billion in equity assets under management
(AUM) mark in June 2015.

Aspire Home Finance Corporation Limited (AHFCL) is a professionally managed housing

finance company. AHFCL is a subsidiary of Motilal Oswal Securities Limited (MOSL) which is
a part of Motilal Oswal Financial Services Limited (MOFSL).

Motilal Oswal has been awarded 6-time winner of Best Performing Equity Broker (National) by
UTI-CNBC TV18 Financial Advisor Awards It has 30 years of wealth creation expertise driven
by the philosophy of Solid Research, Solid Advice.

The company has 10,00,000 customers with Rs. 69,561 Cr. plus depository assets with PAN
India coverage across 2,200+ locations in over 500+ cities also it provides its customers with:

 15 min, 100% paperless trading and D-mat account

 Instant day account activation on receipt of application
 Dedicated customer service team with a 6-hour query resolution TAT
 Customer centric Risk Management System and real-time payouts

MISSION
To be and remain Their Client’s Most Trusted Advisor” Client’s mission is what they seek to
accomplish every day.

VISSION
“To Be Acknowledged for Delivering a Superior set of Successful Investment Solutions and
Exceptional Customer Service” Their vision emphasizes that Clients do business where they are
welcome and stay where they are appreciated.
ORGANISATIONAL STRUCTURE
SERVICES OFFERED:

 Private equity
 Wealth management
 Assets management
 Investment banking
 Portfolio management
 Dedicated advisory
 Systematic investment plans
 Loan against portfolio
 Customer support

PRODUCTS & ADVISORY

 DERIVATIVES
 COMMODITY
 CURRENCY
 MUTUAL FUNDS
 FIXED DEPOSITS AND BONDS
  IPO’S
 PORTFOLIO EVALUATION SERVICES
 FINANCIAL PLANNING SERVICES

APLICATIONS USED BY CUSTOMERS:

 MO INVESTORS- TRUSTED INVESTMENT SOFTWARE

 MO TRADERS- TRUSTED TRADING SOFTWARE
 TRADING VIA DESKTOP
 SMART WATCH STOCK TRADING APP

PROFITABILITY POSITION OF THE COMPANY:

 MOSL is a large market cap company with market cap of over 13870cr and its current
market price is 945.
 Company has given good profit growth of 50.77 CAGR over last 5 years
 Company is expected to give good quarter

Here are the financial statements of the company of last 10 years

 The net profit of the company is increasing regularly since last 10 year
  Company has a decent payout ratio of 12% which is bit less than the previous year’s
maybe the company is planning for growth.
 Company has a good cash flow of 449cr.
 Promoters has 70.66% shareholding which is a good sign.
 Debtor days have improved from 144.58 to 92.27 days.

Competitive Analysis

Sector P/E ratio 25.74

 The market cap of the MOSL is quiet low as compared to its competitors
 As per the sector P/E ratio the MOSL has a good scope to grow with its current P/E ratio
of 10.53
 Dividend yield of MOSL is decent
 Debts to equity of MOSL is low as compared to few of its competitors like Muthoot
finance, Bajaj finance & etc.
 As per the return on capital employed MOSL is 2nd with 22.14% after HDFC AMC which
is 39.93.
CHAPTER 3: JOB DISCRIPTION AND FUNCTIONAL PROFILE

My area of internship is related to the financial market and its various instruments such as cash-
equity market and derivative market. At the time of the joining, they assign me the following
task which I have to perform during my internship as a financial intern.

 Making presentation on company analysis

 Working on given projects
 Opening of D-mat accounts
 technical analysis
 Client’s portfolio management

MAKING PRESENTATION ON COMPANY ANALYSIS

During first few weeks of internship our corporate mentor told us about the basics of stock
market- the opening and closing time of the market, the no of segments available for trading,
different styles of trading, settlement period, scams, depositary, brokerage and etc.

And after few weeks’ tasks were assign to us. We have to make presentation on the different
companies of the same segment. We were asked to prepare the comparison between the top
companies in the ‘IT- SOFTWARE’ segment. The company given to us are HCL, TCS,
INFOYSY AND WIPRO.

In the presentation we have to compare the company’s growth prospectus and future capabilities
with reference to the sector. Honestly speaking I enjoyed a lot working on these types of projects
as for me it is a great way to gain some practical knowledge while enjoying.

WORKING ON GIVEN PROJECTS

We have to prepare reports by doing the analysis for the specific segment and
preparing an excel report for it. When we were taught about the options in the
derivative segment so the activity was given to us so that we could get the practical
insights of the segment.

In the task we have to analyze the past 6-month performance of the 50 companies
listed in the nifty fifty index. And we have to compare the performance of these
company with the nifty fifty index as a whole.

Basically, first we have calculated the opening and closing price of the last 6
monthly expiries of the 50 companies individually.

And then the total movement in six months, movement in each month & average
movement of the price were calculated for the 50 companies individually and same
procedure has to be done for the whole nifty index as well

And then the price movement of the individual company is compared to the whole
nifty 50 index as per the weightage of the company in the index.

OPENING OF D-MAT ACCOUNTS

during my internship opening of dematerialization account is also one of job.

A D- mat account (short for Dematerialized account) is an account to hold financial securities
(equity or debt) in electronic form. In India D- mat accounts are maintained by two depository
organizations, NSDL (National Securities Depository Limited) and CDSL (Central Depository
Services Limited). A Depository Participant (DP), such as a bank, acts as an intermediary
between the investor and the depository. Access to the Dematerialized account requires an
internet password and a transaction password. Transfers or purchases of securities can then be
initiated. Purchases and sales of securities on the Dematerialized account are automatically made
once transactions are confirmed and completed.

DOCUMENTS REQUUIRED FOR DEMAT ACCOUNT: To open a D- mat account you have
to provide documents which fulfill the requirements of KYC (Know Your Customer) norms. A
contract with a stockbroker does not have to be signed. Generally, the documents are:

 PAN (compulsory)
 Bank statement (last 3 months)
  Address proof
 Income Tax Return
 Two colour photos
 Bank crossed cheque
 KYC details
 Aadhar Card

TECHNICAL ANALYSIS

Technical analysis is a trading discipline employed to evaluate investments and identify trading

opportunities by analyzing statistical trends gathered from trading activity, such as price
movement and volume.

A trading platform from the Motilal Oswal known as ‘MO-TRADERS’ was provided to us to let
us trade practically. We have to do the technical analysis of the company based on the previous
charting pattern, price movements, and by the help of some technical indicators like – RSI,
EXPONENTIAL MOVING AVERAGES, PIVOT LINES, MCD, VWAP and etc.

Basically, we have to do the technical analysis for the different trading styles like;

INTRADAY TRADING

SWING TRADING

POSITIONAL TRADING

PORTFOLIO RESTRUCTION
An active management strategy for a portfolio or fund in which the investor or money
manager changes the securities represented in the portfolio or fund as changes to one's investmen
t goals change. Portfolio restructuring involves the sale of assets no longer needed or wanted and 
the purchase of different ones. The term implies that this occurs at a fundamental level; that is, ra
ther than selling a few securities here and there, the investor or money manager is changing the b
asic structure of the portfolio or fund.

The portfolio of a client was given to me. There were 40 companies in the client’s portfolio and
it is worth of around 17 to 18 lakh rupees. Sir asked me and my teammate to alter this portfolio
by doing the technical and fundamental analysis. Sir asked us that out of 40 company we have to
keep only 25 companies on the hold and has to exit the position of remaining 15 companies by
booking the profit. So, me and my teammate has done this portfolio restruction under the
guidance of our corporate mentor. From this activity I learnt a lot that why the fundamental and
technical analysis are important and required not only for the company but also for the particular
industry/sector as well.

REPORTING RELATIONSHIP

MR. VIVEK SINGH (DIRECTOR)

MS. MEENAKSHI BHATT(MANAGER)

INTERNS (ME)

That is the formal chain of communication. But most of the time we had a direct
communication with the director. As our director MR. VIVEK SINGH is my
corporate mentor too. I had gained all my knowledge practically and theoretically
working under his guidance throughout the internship.
 CHALLENGES

 I can clearly feel that I have lack of technical knowledge about the
terms in derivatives segments.
 It seems difficult for me initially to apply my limited knowledge of
fundamental analysis practically to make decisions.
 I was afraid to interact with the clients, while opening d-mat account
for the clients I have to interact with them on calls and initially
communicating to the new people is kind of challenging for me.
 Lack of time, I believe 3 months are bit less to get a firm grip on such
a technical segment of derivatives including options and future. There
was so lot of things to dive in but a bit less time to grasp all that
knowledge.

WORK ENVIRONMENT

 the work environment is quiet health and appropriate

 due to the pandemic, there was on few people on the desk
 a separate cabin was provided to us to maintain social distancing
 my corporate mentor and any staff on the desk is ever ready to guide
and help us.
 We were treated like we are the part of the organization and not just
the temporary interns.
 the work timings are from 9:30 am to 5 pm
 CHAPTER 4

BUSINESS PROCESS LEARNED

ABOUT THE BUSINESS:

 Motilal Oswal Financial Services Ltd. was founded in 1987 as a small sub-
broking unit, with just 2 people.
 The company has a network spread over 550 cities and towns comprising
2500+ business locations.
 The company has following major business
 One of the major stock brokers in India (with 30+ years starting in
1987
 Mutual fund house
 Largest portfolio management services in India.
 Home finance unit
 Private equity and real estate

 3% Market Share in Capital Market (Market share of Capital Markets

improved by 80bps YoY to 3.1%, Stable market share of 1.9% in MF Equity
AUM.)
 Increasing Client base (In the Broking and Distribution Business, Client
acquisition is up by 198% YoY, In Wealth Management, Client level
engagement is at an all-time high with the number of families reaching 4,653
+25% YoY)
LET’S HAVE A COMPLETE LOOK TO THE PRODUCTS AND SERVICES OFFERED

Products and processes -

1. Derivatives – A derivative is a contract between two or more parties whose Value is based on
an agreed-upon underlying financial asset (like a security) or set of assets (Like an index)

A. FUTURES - Through Motilal oswal, the client can now trade in index and stock futures on
the NSE. In futures trading, the client takes buy/sell positions in index or stock(s) contracts
having a longer contract period of up to 3 months. Trading in FUTURES is simple! If, during the
course of the contract life, the price moves in client favor (i.e., rises in case the client have a buy
position or falls in case the client have a sell position), the client make a profit presently only
buyer to complete the transaction if the price is not favorable to him. To take the buy/sell
position on index/stock options, the client has to place certain % of order value as margin. With
options trading, the client can leverage on client trading limit by taking buy/sell positions much
more than what the client could have taken in cash segment. The Buyer of a Call Option has the
Right but not the Obligation to Purchase the Underlying Asset at the specified strike price by
paying a premium whereas the Seller of the Call has the obligation of selling the Underlying
Asset at the specified Strike price. The Buyer of a Put Option has the Right but not the
Obligation to Sell the Underlying Asset at the specified strike price by paying a premium
whereas the Seller of the Put has the obligation of buying the Underlying Asset at the specified
Strike price by paying lesser amount of premium, the client can create positions under OPTIONS
and take advantage of more trading opportunities.

B. OPTIONS- An option is a contract, which gives the buyer the right to buy or sell shares at a
specific price, on or before a specific date. For this, the buyer has to pay to the seller some
money, which is called premium. There is no obligation on the buyer to complete the transaction
if the price is not favorable to him. To take the buy/sell position on index/stock options, the
client has to place certain % of order value as margin. With options trading, the client can
leverage on client trading limit by taking buy/sell positions much more than what the client could
have taken in cash segment. The Buyer of a Call Option has the Right but not the Obligation to
Purchase the Underlying Asset at the specified strike price by paying a premium whereas the
Seller of the Call has the obligation of selling the Underlying Asset at the specified Strike price.
The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying Asset at
the specified strike price by paying a premium whereas the Seller of the Put has the obligation of
buying the Underlying Asset at the specified Strike price by paying lesser amount of premium,
the client can create positions under OPTIONS and take advantage of more trading opportunities

2. COMMODITY- Commodity Futures are one of the most active forms of investment trading
today. Some Investors choose to engage solely in Commodity futures as a means of generating
revenue from an investment portfolio. Commodity can be defined as any kind of movable
property other than actionable claims, money and securities. It is a physical substance, such as
food, grains, and metals, which is interchangeable with another product of the same type, and
which investors buy or sell, usually through futures contracts. The price of the commodity is
subject to supply and demand. Commodity a good diversifier to reduce the volatility of returns in
a portfolio, given that Commodity have been a very little or negative correlation with other asset
classes such as equities. Understanding investment needs are not the same for every person, their
team offers a personalized approach with custom made strategies suitable for individual trading
needs.
3. CURRENCY- Motilal oswal offers the client a simple and convenient way to trade and hedge
client currency risk in four pair of Currencies- Dollar, Euro, Pound and Japanese Yen against
Indian Rupee. By offering the client the choice of trading in different asset class of Currencies
we offer the client the opportunity to diversify client portfolio.

FEW ADVANTAGES OF THIS MARKET

Trading hours of 09:00 am to 05:00 pm provide more trading opportunities Trade in prominent
currencies like US Dollar, EURO, Pound, Yen against Indian Rupee. No Counterparty Default
risk due to settlement guarantee by regulated clearing house Low Taxation (No STT and CTT)
Daily Cash Settlement in INR via MTM (Mark to Market)

4. MUTUAL FUNDS- Mutual funds are ideal for investors who want to invest in various kinds
of schemes with different investment objectives but do not have sufficient time and expertise to
pick winning stocks. Mutual funds give you the advantage of professional management, lower
transaction costs, and diversification, liquidity and tax benefits. Motilal oswal offers the client a
simple and convenient way to invest and manage client personal finance with over 2000 funds
approximately. By offering client the choice of the various funds they partner with, they offer
client the opportunity to diversify their portfolio. Since the process of selecting the right mutual
fund may feel complex and tedious, their experts have researched the funds and using certain
criterion have created a choice of funds. Client may choose to invest in the choice of funds
suggested by their experts or may build client own portfolio.

5. FIXED DEPOSIT WITH BANKS

-corporate fix deposits: They offer a range of Corporate Fixed Deposits varying in tenures,
interest rates & institutions to suit one’s investment needs. The deposit schemes have been
specially chosen from high-safety options to ensure that client enjoy the twin benefits of returns
and protection.

So, why to opt for corporates office?

• If client risk appetite is low, fixed deposits are perfect for the client. Since most of the
instruments are rated, corporate fixed deposits have a very high safety level

• Attractive returns at interest rates higher than bank’s Fixed Deposits

• Higher Interest rates for senior citizens

• High liquidity; most of these issuers offer 75% of the investment amount as loan @ 2% over
the interest rate on the deposit, as well as a pre-mature withdrawal
• Potential to earn compounding interest on client money by reinvesting the principal amount
along with the interest earned

• Flexible tenure – there are various tenures ranging from 1 to 7 years 34

• The client can choose interest frequency; most issuers offer monthly, quarterly, bi annual and
annual cumulative deposits

• The client gets direct ECS credit facility for interest payments or advance interest warrants for
the year issued by most issuers

-BONDS: Bond refers to a security issued by a company, financial institution or government

which offers regular or fixed payment of interest in return on the amount borrowed money for a
certain period of time. Thus, by purchasing a bond, an investor loans money for a fixed period of
time at a predetermined interest rate. While the interest is paid to the bond holder at regular
intervals, the principal amount is repaid at a later date, known as the maturity date. While both
bonds and stocks are securities, the principal difference between the two is that bond holders are
lenders, while stockholders are the owners of the organization. Another difference is that bonds
usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may
be outstanding indefinitely. Customer also has the option of recurring interest along with
Principal i.e. Cumulative Interest. Thus, a bond is like a loan: the issuer is the borrower (debtor),
the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower
with external funds to finance long-term investments, or, in the case of government bonds, to
finance current expenditure. Bonds must be repaid at fixed intervals over a period of time.

6. IPOs- An initial public offering (IPO) refers to the process of offering shares of a private
corporation to the public in a new stock issuance. Public share issuance allows a company to
raise capital from public investors. The transition from a private to a public company can be an
important time for private investors to fully realize gains from their investment as it typically
includes share premiums for current private investors. Meanwhile, it also allows public investors
to participate in the offering.
ADVISORY

1. PORTFOLIO EVALUATION SERVICE:

 Align Client Portfolio - Client Investment Portfolio lives and breathes every moment,
& while it chases client’s life goals, it also needs a health check by an expert.

 Why should the client subscribe to their service?

Investing in stock markets is risky and that makes it even more important that the
client is aware of the risks that portfolio carries. Buying of a stock or a Mutual
Fund is typically done based on the research at that point of time. Rarely do we
look at the impact of buying an individual stock on the overall portfolio at the
time of purchase. We also tend to forget to review their portfolio and individual
investment in the light of recent changes – economic and / or market. In order to
maintain a healthy portfolio, we must review their investments on regular basis to
ensure that the risk is well calibrated and free from biases. Motilal oswal Portfolio
Evaluation Service (PES) is designed to give the client a onetime assessment of
client investment portfolio experts. The evaluation identifies potential risks
evaluates them against potential returns and recommends strategies to sharpen the
portfolio better. Their Portfolio Evaluation Services are designed to put client
portfolio under a scanner to identify the key risks and recommend changes to
make it more efficient.

 Their Portfolio Evaluation Report provides the client with the following:
-Risk & Return analysis of client overall equity and debt portfolio.

- Mean Variance Analysis and Optimization for the Portfolio.

- Marginal Risk Contribution and Draw-down Risk Analysis.

- Consolidated and independent Research view on Stock and Mutual Funds

Portfolio.

- Recommendations on exits and re-investments in the portfolio.

2. FINANCIAL PLANNING SERVICE- Their Financial Planning Services are designed to help
the client take the right decisions while the client invest. Here is how a Financial Plan is really
the answer for the client to feel secure about client investment journey.

3. INITIAL STEP- Once the client subscribes, their advisory will spend time with the client
understanding client financial situations, client life goals, client current investments and risk
perception. Why do we need to profile the client? Client financial plan should reflect client
goals, aspirations and what the client want to do with money. That is why it is important for their
planners to spend time with the client to truly understand the client. Know why financial
planning is important.

4. INVESTMENT PREPRATION- Client plan is prepared with great care by their expert team
of financial planners and requires considerable effort to be made. Financial planning at its Core
helps to match client assets with client liabilities (client goals) in a way that the Client take
calculated risks. We look at over 2.5 million investment paths while preparing client plan. This is
all to ensure that the client get an advice that is just right for the client.

INSIGHT GAINS

 Identifying the potential client for investments and various category of client’s terminology
and define the common or unique business terminology used at the worksite.
 Opening process of a new D-mat account, documents required and its motive
 Settlement period of the market
 Core difference between primary and secondary markets
 About Depositary participants
 How brokerage fees work.
 The difference between spot and future market
 How to see a option chain.
 Difference between at the money, out the money and in the money during the option
contract.
 Intrinsic value and time value of a premium
 The role of time decay to affect profitability
 Knowledge about volatility and implied volatility
 To measure the risk/reward value of the investors’ assets class choices
 Gain knowledge about the factors to consider before constructing a client’s portfolio
 Understanding about the various products offered by the firms.
 Gained knowledge about covered calls strategy using option
 Information about hedging the funds to lower the risk

EXPERIENCE

Positive approach: I experienced the working culture and worked for certain hour which was
quite difficult as I was new to this thing

Great assistance: The mentor helped a lot in their work, he gave us proper suggestion,
knowledge, and taught us how the process work

Improvised confidence level: Gained a lot of confidence while finding correct information.

Value addition: Gained a lot of corporate values and behavior for the same.

Positive experience: It was all in all a very great learning from the office culture
 MY ANALYSIS AND EVALUATION OF THE MOTILAL
OSWAL FINANCIAL SERVICES

MARKET CAPITALISATION:
The company is a mid-cap company with the market capitalization of rupees 14,471 crores.
PROFITABILITY OF THE COMPANY:

 SALES OF THE COMPANY IS INCREASING RAPIDLY SINCE THE

LAST FIVE YEAR (FROM 1923cr IN 2017 TO 3626cr IN 2021)

 THE NET PROFIT OF THE COMPANY IS THE HIGHEST SINCE LAST 10

YEARS. THE PROFIT IN 2021 THAT IS 1245cr IS DOUBLE OF THE
HIGHEST PROFIT IN THE LAST 10 YEAR WHICH WAS 622cr IN THE
YEAR 2018.

 THE COMPANY IS PAYING GOOD DIVIDEND RATIO BUT THE

PAYOU RATIO IS THE LOWEST IN 2021 WHEN COMPARED TO LAST
5 YEARS.

 EBITDA AND EPS ARE ALSO THE HIGHEST IN 2021 SINCE THE LAST
5 YEARS.

 RETURN ON CAPITAL EMPLOYED IS 22.1%

 RETURN ON EQUITY IS 35%

  COMPOUND PROFIT GROWTH OF 5 YEAR AND 10 YEAR IS WAY MORE THAN
THE COMPOUND SALES GROWTH OF 5 AND 10 YEAR WHICH SHOWS THAT
THE COMPANY IS ENJOYING THE BENEFIT OF COMBINE LEVERAGE.

So, on the basis of this analysis, I will rate the profitability of the MOSL 4 out of
5.

RISKINESS OF THE COMPANY:

Debt to equity interest coverage Promoter’s Pledged

ratio holding percentage
1.28 4.59 70.7% 0%

 The promoters have more than 70% holding in the company which clearly
shows the promoters has confidence in the company which is a good sign.
  Also, it can be seen that the promoters holding is maximum in year 2021
while comparing it to the last 10 years

 The pledged percentage of the promoter’s holding is zero it means no

borrowings had been taken on the sake of shareholding by the promoters it is
an absolute positive sign for the company.

DEBT: 5693 crores

FREE CASH FLOW: 865 crores
NET PROFIT: 1245 crores

 The company has a huge amount of debt of 5693 crores which is way more
than its net profit and free cash flow. But it is not right to judge MOSL
company on the basis of its debt-to-equity ratio because when a company
becomes NBFC (non-banking financial company) and has a grip into home
finance unit as well so it become the business of the company to take loan
for further lending of loans to the clients.

 Also, the interest coverage ratio of the company is 4.59 which tells that
company can easily pay its interest obligations.
  The debtor’s day of the company is also reducing especially since the last 5
five years.

SO, ON THE BASIS OF THIS ANALYSIS I WILL RATE MOTILA 4 OUT OF

5. (Rating 5 mean the less risky and rating 1 means the riskier)

Valuation of the company:

 The price to earning ratio is 11.62 which means a investor has to pay 11.62
rupees to earn 1 rupees from this share.
 The price to earning ratio of this sector/ industry (finance) is 25.72.
 As per the price to earning ratio of the industry the share of MOSL is under
valued.
 The price to book value of the share is above the price to book value of the
industry it simply concludes that the stock is trading at 4.36 time its book
value.

 The PEG ratio (which is basically price to earning ratio divided by sustainable growth
rate of the company) is 0.22. so according to the PEG ratio also the stock is undervalued.

ANLYSIS ON THE BASIS OF PEAK PERFOMANCE OF THE

COMPANY
Before 2021 when the company is at the peak performance on the basis of net
profit which is 622 crores in the financial year 2017-18. The highest price of the
share is 1591.

And in the year 2021-21 the performance of the company is double on the basis of
net profit (with 1245 crores in march 2021).

So, the stock performance should also be double or at least above that level which
was 1591 rupees.
But we can clearly see in the above image that the closing price of march 2021 is
624 only. And while watching the performance growth of the company the share
should be valued at a higher price.

So from this I analyzed that the MOSL is currently undervalued.

I WILL RATE MOSL 5 OUT OF 5 HERE AS PER MY ANALYSIS.

PEER COMPARISON:

PROFITABILITY

 On the basis of return on equity MOSL is one of the best in its

sector with max ROCE of 35.04 7 HDFC AMC is on the 2nd rank
with 30.11 ROE.

 On the basis of return on capital employed MOSL is on the 2nd rank

with 22.14 ROEC, HDFC AMC tops with 39.93 ROEC.

 EPS of MOSL in 3rd on the list (84.94), BAJAJ HOLDING’S EPS

is maximum (327.95 rupees)

 In terms of sales growth percentage and profit growth percentage

MOSL is dominating the list with 53.77 sales growth percentage
and 620.11 profit growth percentage.
RISKINESS

 Debt to equity ratio of MOSL is moderate when compared to is competitors,

BAJAJ & AMC has zero debt to equity

 In terms of interest coverage ratio MOSL is on the 3 rd rank way behind than
BAJAJ & HDFC.

 In terms of promoter’s holding MOSL is at great position all the top 3 rank
in the list has almost same promoter’s holding.

 The pledged percentage of the promoters is nil among all the companies.

VALUATION

 The MOSL and MUTHOOT FINANCE are undervalued among all the share
in the list with the least PEG ratio of 0.22 of MOSL and 0.45 of MOTHOOT
FINANCE.

 In terms of price to earning ratio MOSL is the lowest in the list.

 MOSL has the lowest market capitalization in this sector while Bajaj finance
has the maximum market capitalization in the sector/industry.

So by comparing overall with its competitors I will rate MOSL 3.5 out of 5.
PROFESSIONAL SKILLS ACQUIRED:

Analytical skills: To judge the profitability of potential deals, securities, commodities, and
financial services interns must have strong analytical skills. This includes computer
programming skills which they use to analyze financial products.

Customer-service skills: Securities, commodities, and financial services interns must be

persuasive and make clients feel comfortable with the agent’s recommendations. Also it becomes
very important to handle the customers when a mistake has been made on our part for example
while placing the order for buying the stock at a price of 100 if by mistake we purchase the stock
at 101 or 102 the client can get angry in such situation we were thought to remain calm and make
sure that we don’t lose the customer because as it said that the customer is god be it in any
business.

Decision making skills: Investment banking traders must make split-second decisions, with large
sums of money at stake.

Math skills: Securities, commodities, and financial services interns need to be familiar with
mathematical tools, including investment formulas. Also, they need to be quick with calculations
as being a part of finance team you have to be good with numbers.

Initiative: Securities, commodities, and financial services interns must create their own client
base by making “cold” sales calls to people to whom they have not been referred and to people
not expecting the call. Although it is difficult at first to call random people to sell the products
and services it becomes a routine after a time as we get used to it.
 CHAPTER 5

CONCLUSSION:

 3% market share in capital market and a stable market share 0f 1.9% in mutual fund equity
AUM.

 By the past growth I believe in the next bull cycle the mutual fund AUM will increase in a
non-linear manner.

 Majority of their mutual funds are in high equity proportion which have higher yields and
helps in profitability of the business.

 They have a diversified client base (retails customers, mutual funds, foreign institutional
investors, financial institutions and corporate clients)

 In wealth management, client level engagement is at an all time high with the no. of clients
reached of 25% upward year on year

 In housing finance asset quality has improved significantly with gross non-performing assets
at 1.8% and net non-performing assets at 1.36%.

 Motilal Oswal financial service limited is maintaining a healthy dividend payout ratio of
28.74 %.

 Motilal Oswal financial services limited with a valuation of 14470+ crore in march 2021 has
delivered a growth of 50.77 CAGR over last 5 years.

 The share is under valued and has a good growth potential.

 My overall rating to the company on the basis of business, profitability, riskiness and peer
compression is 16.5 out of 20.
AWARDS & RECOGNISATION

 Company’s consistent efforts towards equity research have reflected in an increase in the
ratings and rankings across various categories in the Asiamoney brokers poll over the
years.

 Company has also been awarded the best performing equity broker(national) at the
CNBC TV18 financial advisor awards for 5 years in a row and get included in ‘hall of
fame’ at the 10th financial advisory award 2019.

RECOMMENDATIONS & SUGESSTIONS

 Motilal Oswal financial service limited should focus more on relationship managers
because most of the relationship managers are new to the organization so as they deepen
the relationship with the clients business will improve.

 The reduction of NPA will leads to the lower cost of funds to the company.

 Company should focus on strictness of the due diligence process of providing loans to
avoid the situation that they have in the initial years (when they had the horrible GNPA’S
which was 10.4 % of the total book)

 company should focus more on growth to expand its market capitalization in the sector.
 BIBLIOGRAPHY

https://www.researchgate.net/publication/342991622_Stock_Market
s_An_Overview_and_A_Literature_Review - accessed on 27th June
2021

https://en.wikipedia.org/wiki/Motilal_Oswal - accessed 29th June

2021
https://en.wikipedia.org/wiki/Raamdeo_Agrawal - 29th June 2021
https://www.motilaloswal.com - accessed on 2nd July 2021

https://www.motilaloswalgroup.com – accessed on 2nd July 2021

https://www.screener.in/company/MOTILALOFS/consolidated/ - accessed
on 10th July 2021
https://www.tickertape.in/stocks/motilal-oswal-financial-services-MOFS?
checklist=basic – accessed on 10th July 2021
THANK
YOU!!