Since its humble beginnings as a broking house, Motilal Oswal Financial Services Ltd (MOFSL) has come a long way to become the financial conglomerate it is today. With a number of activities including broking, mutual funds, housing finance, private equity and investment banking amongst others, the firm is one of the biggest financial services firms today.
This firm would not have been the success it is today without the two people behind it, namely Mr Raamdeo Agrawal and Mr Motilal Oswal.
Growing up in a Marwari family, Mr Motilal Oswal had a flair for business from a very young age. His father was a grain merchant in a small village in Rajasthan, right at the border of Pakistan. He finished his schooling in that village in a Hindi Medium School and then moved to Mumbai to pursue Chartered Accountancy. He was not inclined towards the stock market until much later.
While studying for his CA exams, he understood the workings of the balance sheet and started analysing companies. He also understood how the equity markets work through stock market listings. That was when he met his business partner, Mr Raamdeo Agrawal who was residing in the same hostel.
Since both of them hailed from a background involving agriculture and trade, they were able to form an effective partnership that is still thriving to this day. They started off with simply two promoters and a peon, and went through the typical highs and lows of a start-up. At the time, two Chartered Accountants starting a sub-broking unit was unheard of. It was revolutionary in 1987.
In the first four years, they made little money. After that came the Harshad Mehta bull run. At that time, they turned their investment of ₹15 lakh into ₹30 crore in 20 months. Mr Oswal often says that without Harshad Mehta, the duo would have parted ways and there would be no Motilal Oswal today.
In 2005, the firm entered the world of investment banking. Further, they ventured into private equity in 2006. They went on to tie up with a number of banks to offer online trading to customers including notable ones like SBI and Axis Bank.
In 2010, a Mutual Fund business known as Motilal Oswal Asset Management Company was set up. This was followed by the formation of Aspire Home Finance Corporation Limited, a home finance division.
“Building the mutual fund business was tough. We were the outsiders. It took us time to crack the code but we finally did it. We never hired any of our fund managers from the mutual fund industry; all our talent is home grown,” said Mr Oswal in an interview with Forbes.
He was awarded the Rashtriya Samman Patra by the Government of India for being amongst the highest income taxpayers in India for a period of 5 years from FY95–FY99. He has authored two books namely ‘The Essence of Business & Management’ and ‘The Essence of Life’ which are filled with quotations for aspiring entrepreneurs.
He often states that he stumbled upon the markets by accident. Only after challenging himself, did he grow. Only after becoming better, he became bigger. His key piece of advice to today’s youth is “whatever you do, bring excellence. With every customer touch point, every product, every process and that’s why I say that all processes, technology and people bring scalability.”
“I stand for integrity. You need to have absolutely no compromise on the value system and business ethics. You should build yourself around people who share your faith, your passion and complementary skill sets; these are all very important as a general formula for building businesses.”
Motilal Oswal owes his success to legends like Rakesh Jhunjhunwala, Radhakishan Damani and Manu Manek for inspiring him. They would periodically hand over stock tips and recommend them to clients which helped the duo to stay afloat.
He also credits his success to his team, and has stated that grooming people for leadership is a waste of time. “People will not miss me if I am out as they have been fully empowered. My job is to set the processes and we have built a set of very strong ones,” says Mr Oswal. He does not believe in imposing his views. On the other hand, he encourages ideas and initiative from his people. He believes that asking people questions is the best way to generate ideas.
He states that the firm has a culture of entrepreneurship and partnership. Respect towards people, no matter at what level is a priority. Employees from the bottom to the top all receive shares of ASPIRE. This is the main reason why most employees decide to stick around for a long time.
“I always think that character and capability are key traits people should have. But character is table stakes, without which capability does not mean anything”
Mr Oswal describes his role of a CEO as someone who creates a trustworthy environment. “We have to be transparent and ethical with clients, so any kind of non-transparency with them will not be tolerated. A mistake will be tolerated once, and we will create processes, so mistakes don’t happen again. But if the mistake is about integrity or ethics, there will be no second chance.”
He also believes that the Indian economy is emerging stronger than before due to the demographics. He states that if we market ourselves well, it could lead to a huge inflow of foreign capital. “There are businesses that are domestically consumption-driven businesses, and there are businesses that are global businesses. Thanks to our regulatory environment, our English-speaking population and the democratic setup, the international investors have a lot of confidence in the country compared to countries such as China. Strategically, we are in a great position, and a huge number of opportunities exist not only in the domestic market but also in the international markets.”
“Innovation and ideation is difficult to do through computers.”
One of his main motivations is educating and motivating the youth. To distill their insights on India’s fastest and the biggest value creating companies, the company releases an annual wealth creation. Furthering this motivation of educating the youth, Mr Oswal himself starts his day by tweeting an inspiring quote for his Twitter and LinkedIn followers to wake up to so they can seize the day. He begins Saturdays by sharing a short story with an important life lesson.
His advice to aspiring entrepreneurs is:
“The size of the Indian economy is becoming very large. The issue to be addressed is: How do you create a niche product for yourself, something that you are known for? How do you create a differentiated offering and you need to have the patience and perseverance to build that offering. There are no shortcuts in life, that’s what I feel.”
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