FY2021 was an eventful year for MOFSL. Despite the pandemic situation and uncertaintiesthereof it was a remarkable year for us. India stepped into FY2021 with Covid-19 inducedlockdown in place. Lockdown restrictions caused unprecedented job losses and impactedlivelihoods of many. Demand remained muted and GDP contracted to 23.9% in Q1FY2021. Butmarkets started gradually recovering led by phase wise unlocking various policy measuresannounced by government RBI as well as a better than expected corporate earningsperformance. From the lows seen during the end of FY2020 markets bounced back to eraseits losses in November. Investors further gained confidence with the approval of vaccinesagainst Covid. Both Sensex and Nifty closed at an all-time high in the month ofFebruary'21.
FY2021 has been a landmark year for our company touching all-time highs on severalparameters. We reported highest ever consolidated revenues of ` 3923 Cr +69% YoY and PATof ` 1245 Cr +579% YoY. PAT excluding exceptional items stood at ` 1311 Cr +615% YoY.Our ROE excluding other comprehensive income stood at 38% as compared to 6.6% in FY2020.Going forward our focus on knowledge talent processes technology brand & cultureand inter-segment synergies will pave the road for achieving milestones across allbusiness verticals. We continue to remain optimistic on the growth potential of all ourbusiness verticals given the robust fundamental structure and revival in macro-conditions.
On the capital markets front Indian equity markets posted their best performance in adecade in FY2021. The industry witnessed a record of 1.44 Cr of new demat accounts beingopened. FII inflows were also at an all-time high. Our broking business focuses on a"Phygital" Business model which offers best of both the worlds. Success of thismodel has yielded results as we recorded our highest ever broking revenues and ADTO inFY2021. We were successful in adding around 6.2 lakh clients taking the total retailclient base to ~19.7 lakh. Online volumes contributed ~60% of the total retail volumestraded. Our distribution AUM stood at ` 12785 Cr and has huge head-room for growth asthe client penetration stands at ~13% of our retail client base. We made huge investmentsin this business in FY2021 by adding 1600+ people and 60+ branches in order to benefitfrom the industry consolidation opportunity. In the institution business our rankings andclientele continued to remain robust. We were awarded #1 Local Brokerage and #2 OverallSales in the Asia Money Brokers Poll 2020. On the investment banking side we associatedwith HDFC and ICICI Bank for their QIPs. We continue to engage on a wide cross-section ofmandated transactions across capital markets and advisory.
Our AMC AUM which includes MFs PMS and AIFs stood at ` 45692 Cr in FY2021 +54% YoY.In FY2021 we were ranked 9_ in terms of new MF folio addition. Our new SIP count marketshare improved by 90 bps YoY to 2.2%. Our gross sales at AMC level increased by 22% YoYand net flows turned positive in the last quarter. We have received strong traction in ourPassive offerings; our AUM reached 10x in a years time. We have strengthened our salesvertical by adding 20 sales employees in FY2021 including some senior level hiring.Further we expanded our reach by adding 5 more branches. During the year PE AUM stood at` 6569 Cr. We launched IREF V which received commitments aggregating to ` 650 Cr. Ourwealth management business recorded 26% YoY growth in revenue led by strong net sales ofRs 2711 cr in FY2021. Our AUM touched an all-time high of ` 25286 Cr +62% YoY. Clientacquisition saw encouraging growth with the number of families under our business crossingthe 5000 mark. With the improvement in the vintage of RMs the profitability of ourwealth management business is poised for further traction. Mr. Ashish Shanker was promotedas CEO of our wealth management business.
On our housing finance business our efforts were concentrated in strengthening ourorganisation in terms of processes systems manpower culture and structure to createfoundation for strong and sustainable growth. We on-boarded Mr. Arvind Hali as MD &CEO and under his leadership our entire senior management team with all key heads is nowin place. Our full year disbursement stood at ` 273 Cr +42% YoY. In FY2021 we furtherdiversified our liability sources by National Housing Bank borrowings and Securitizationtransactions and also lowered our average cost of borrowings by 95 bps YoY to 9.25% inFY2021. We have expanded our sales force during the year and will continue to hire more asbusiness is gears up for growth.
In our fund based businesses (comprising of sponsor commitments to quoted equity andprivate equity funds) we recorded highest ever gains on investments in a year at ` 779Cr. As per IND-AS these gains are a part of our reported earnings. Our QGLP philosophyniche expertise in equities proven track record and belief in 'skin in the game' augurswell for our fund based business
Some of the key highlights of FY2021 include group's asset under advice crossing ~2 tnmark balance sheet size crossing ` 100 bn 61% growth in PAT of broking business 352%growth in PAT of wealth management business highest ever NIM and lowest ever COF for homefinance business and successful launch of S&P 500 index fund. Our dividend payoutratio excluding MTM gains stood at 28%. Company has also completed Buyback of equityshares of ` 1.5 bn (including tax).
Our strategy to diversify our business model towards linear sources of earnings hasshowed results. Capital Market business which is our oldest and cash cow business hasachieved new highs on various parameters and continues to benefit from industryconsolidation led by knowledge driven phygital offerings. Our Asset Management business islikely to gain from strong product performance and its niche offerings. Going forwardwith ample room for scalability of our Housing Finance and other businesses we remainexcited for the future prospects of the company.
Although World Bank slashed its FY2022 growth projection to 8.3% from 11.2% as thesecond Covid wave hit hard India still stands to benefit in this uncertain environment.Many global MNCs are likely to consider diversifying their manufacturing operations fromChina to India given the low corporate tax rate skilled population relatively low wagesand a large domestic market. Also the growing demand for affordable housing industrystands positive for our business. Sustenance of macros at reasonable levels augurs wellfor our business and industry as a whole. As these macro trends open up opportunities ourexperience and emphasis on 'Knowledge First' give us the ability to capture these growthprospects.
With best wishes
Managing Director & Chief Executive Officer
Motilal Oswal Financial Services Limited.