About Motilal Oswal
India’s only 100% equities fund manager with a clear investing philosophy. An asset management organisation with a strong point of differentiation, They aim to provide targeted mutual funds, PMS, and AIF strategies based on their primary equities research and investing competencies. Their sponsor, Motilal Oswal Financial Services Limited, which has over 30 years of experience under the direction of their founder and thought leader, Raamdeo Agrawal, provides them with equity expertise. Their unique investing methodology has grown and is continually being enhanced by the application, insights, and practical lessons of their seasoned equities investment and research team through his 25 Annual Wealth Creation Studies series.
Their equity offerings have been based on their investment tenet, Buy Right: Sit Tight, where Buy Right refers to purchasing high quality, growth-oriented businesses at a fair price and Sit Tight refers to maintaining investment in them for a considerable amount of time in order to realise the full growth potential of the underlying business. They aim to manage portfolios with about 20–25 high-conviction holdings and little portfolio churn, along with a “Buy and Hold” approach.
Fund Snapshot
| Fund Tenure: | 6 years from first close + 2 years extension provision |
| Drawdown Structure: | 30% initial followed by other drawdowns at the discretions of IM or 10% initial followed by 9 SIPs |
| Exit Load after First Close: | 4% for 24-36 Months, 3% for 36-48 Months, 2% for 48-60 Months, NIL Thereafter |
| Lock-In Period: | 24 Months from First Close |
| Redemption: | Monthly |
| Final Close: | Upto 12 Months from First Close |
| Commitment Period: | Upto 12 Months from Final Close |
The Two Fold Investment Objective
Capital Preservation
By putting an emphasis on high-quality companies that are well-managed, inexpensively purchased, and that use the proper risk management methodology
Capital Appreciation
By investing in industries and subjects supported by strong economic tailwinds & a high possibility of success in the medium future.
Additional Capital Preservation Via Progressive Risk Management
Stock Weightage Rationalization
- Minimum Exposure Criteria and a maximum weight limit in relation to the benchmark
- Framework for Making Profits: Relation between Returns and Portfolio Weight Levels
- Using a maximum number of stocks in the portfolio as part of a diversification strategy
- Quarterly rolling triggers relative to benchmark serve as a stop loss mechanism.
- Putting Limited Turnover into Practice: Selling off shares to earn gains or holding shares with less confidence
Investment Framework
500: Top 500
Market Cap. Currently between 5 and 11 billion dollars.
200-300: Min 26% Promoter Holding
Includes substantial ESOPs and shares held by businesses by managerial personnel. Except in the case of finances.
260-280: PBT>100
Minimum PBT of INR 100 Crs
150-170: Capital Efficiency
Business quality, 15% minimum cycle ROCE
70-90: QGLP
Corporate governance, management decision-making, quality-vision, and execution
<20-30: Earnings Expectations
Companies that Are Available at a Relatively Attractive Valuation and Have Minimum Additional Expected Earnings 3-5Y Growth of 3% Over Benchmark
An exemption to the following may apply to up to 20% of the portfolio.
Insights from the Investment Framework
Promoter Driven
- Bottom line growth: Highest Growth rates
- Capital Efficiency: High Growth coupled with strong capital efficiency
- Alignment of Interest: Promoter’s skin in the game
- Price Performance: Largest wealth generated
- Sector/Industries: Value-creating business areas, innovation led, intellectual property rich businesses
- Decision Making: Speedy and Dynamic
- Business Environment: Competitive environment; often results in more efficiency
- Corporate Governance: Improving with emphasis on independent professional boards
PSUs
- Bottom line growth: Underperform the promoter-driven companies
- Capital Efficiency: Good efficiency ratios; although much lower growth
- Alignment of Interest: Social priorities Low-floating market cap
- Price Performance: Lower than promoter driven
- Sector/Industries: Natural resources, Commodities, Power and Energy necessary for the growth of the nation
- Decision Making: Over-regulated/bureaucratic and hence could often lack speed, tends to be rigid
- Business Environment: Natural monopolies in many sectors they operate
- Corporate Governance: Governmental practices
MNCs
- Bottom line growth: Steady but lower growth than promoter-driven companies
- Capital Efficiency: High capital efficiency
- Alignment of Interest: Probability of agency issues
- Price Performance: Steady growth in wealth
- Sector/Industries: Pharma, FMCG, Automobile
- Decision Making: Usually driven by parent company priorities
- Business Environment: Often satellite operations of parent companies abroad
- Corporate Governance: Overall good governance
About Fund Manager
Vaibhav Agrawal
At Motilal Oswal Asset Management, Vaibhav Agrawal now oversees 2000 crores of AUM across several products.
He has over ten years of expertise in choosing stocks and producing returns that outperform the market. He has also managed a proprietary PMS.
He has had positions at CRISIL as a rating analyst and at Motilal Oswal Asset Management as an investment analyst.
He graduated from the University of Pennsylvania with a Bachelor of Science in Computer Science and from the London Business School with an MBA.
Promoter-Driven Companies
Delivering higher growth in Profitability Metrics
- Over the past ten years, Promoter-driven businesses have had stronger operating profit, top line, and bottom line growth than PSUs and MNCs.
- Promoters are more motivated to increase margins than PSUs or MNCs are.
Improving Their Share in Broader Market Capitalization
| Year | 2012-13 |
Growth |
2021-22 |
Inference |
| No. of companies in Nifty 500 | 306 | 1.1x | 322 | Promoter-driven companies increased from 306 to 322 in the Nifty 500 list |
| % of market Cap. (Top 500) |
50% | 1.4x | 69% | The % of promoter-driven companies’ market cap in the list increased from 50 to 70% in 9 years |
| Avg. Market Capital ($ Bn) |
1.8 | 3.2x | 5.8 | Promoter-driven companies’ average market cap increased 3x in 9 years in the Nifty 500 implying a higher price rally |
The Best Ideas That Give Motilal Oswal The Right To Win
QGLP
190+ firms have been identified using a documented investment philosophy.
Asset Under Management
Mr Oswal Motilal Over INR 47000 Cr. in AUM is managed by AMC across all funds.
Vintage in Equity
Managing pure equity portfolios for almost 20 years
Specialists
With their knowledge in the capital markets, private equity, research, and distribution, the six sisters’ enterprises offer assistance.
Process Development
We always seek to develop and enhance our procedures, and we just included an incremental risk framework.
Successful Exits
Four withdrawals from Motoala Oswal AIF have been profitable, with an average IRR of 16.3%.
Wealth Creation Study
27 wealth creation research has improved our understanding of equity.
Skin in the Game
Our belief is demonstrated by the $4 billion in prop AUM across funds.
Related Products
For any queries, contact us on Mobile: +91 836 858 6435, Landline: 020-48627339,Toll Free: 1800 210 1995, Email: [email protected] 
Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.