Forbes India 15th Anniversary Special

Only smoke, no fire: Raamdeo Agrawal and Motilal Oswal on market rumours of a rift between them

The co-founders of Motilal Oswal Financial Services put to rest speculation of growing differences between them in a rare joint interview on Forbes India Pathbreakers

Neha Bothra
Published: Oct 20, 2023 12:48:20 PM IST
Updated: Oct 20, 2023 01:00:05 PM IST

Only smoke, no fire: Raamdeo Agrawal and Motilal Oswal on market rumours of a rift between them (L to R) Raamdeo Agrawal and Motilal Oswal. Image: Bajirao Pawar for Forbes India

In a very rare interview together, Motilal Oswal and Raamdeo Agrawal, co-founders of Motilal Oswal Financial Services, talk about the past, present, and future of a company they built from the ground-up nearly 40 years ago. The retail sub-broking business, started in 1987 from a small office in the bylanes of South Mumbai, is now among the top domestic financial services conglomerates, with interests ranging from stock broking to asset management.   

In fact, the duo’s entrepreneurial journey captures the evolution of modern stock markets and the rise of India’s economic heft in the world. In a candid conversation, Oswal and Agrawal talk about how they made their first million, why they are excited about the organisation’s future, and the legacy they want to leave behind, besides investing themes, strategies for long-term wealth creation, and more.  
In part one of a multi-part series, Agrawal, chairman, Motilal Oswal Group, and Oswal, MD and CEO, Motilal Oswal Group, open up about what keeps their 40-year-old partnership going at a time when the market is rife with speculation of strained relations between them. “People love to gossip and make up this kind of talk. It doesn’t bother us,” they assert in an interview on Forbes India Pathbreakers in September. Edited excerpts:

Being partners: ‘Sharing of values’

Oswal: We both are CAs. We stayed in the same hostel. And after completing our studies, we stayed in the same place in Lokhandwala, so that was the connection where I think we could relate to each other. My brothers were in the stock market business. He was doing research and that I think further kind of deepened the connection. In any case my whole family is into entrepreneurship and business. He also wanted to do something on his own. So, I think that's where we proposed to each other and we started in ’87. It has been a fantastic journey from there. And your question about what does it take to sustain the partnership is very, very important. I think the meeting of minds, sharing of passion, sharing of values, and very important… building on complementary skills. I was very good in execution. He was good on strategy. So, you started with that and then we were also lucky to be in the right place at the right time thanks to the Harshad Mehta boom and then markets opening up, a lot of liberalisation happening after Manmohan Singh came in.
Agrawal: Since we started, from the beginning, if a company meeting is there or research meeting is there or a strategy meeting is there, I'll be in the front but handling the markets is completely… in the sense that transaction settlements and all sorts of things and even accounting and all operations… all got reported to him somehow. You know, it's all interlinked. So, it was very natural. Whatever needs to be done, say some part of accounting he is not understanding, or say help is needed, I would also do it. We had certain common principles like not allowing any cheques to bounce ever. Whatever it takes. We will not issue something that we will not honour. The division of work was happening naturally. Whoever had any time, whatever work there was, they grab it and do it so that by the evening everything is done and we’re done.

Also read: Pathbreakers: Raamdeo Agrawal's timeless investing tips for blockbuster market returns

Market buzz of rift: ‘We don’t give too much importance to that’

Oswal: It keeps coming every 3-4 years. It keeps coming. People keep talking. I think we don't give too much importance to that. Of course, you need to listen to them and be alert because in the market some kind of rumours can also create havoc because when people say there are a lot of losses then a lot of your customers can come and take away the assets from us. So, reputation is very, very important for us. I think we had that trust in each other. We have now sealed that bonding. It is very, very strong. So that doesn’t bother us, but it bothers us more from the customers’ perspective when they call us and ask what’s happening.  
Agrawal: We don’t discuss where it is originating from. We try to figure out how the hell to quell the fire attack. So, the first time, I think 2004-05, we had to actually put in an advertisement in The Economic Times. We had to spend Rs 4-5 lakh to say that everything is fine. So, sometimes you give interviews, now media is… and I think there are so many dear friends who know us better than anybody in the market. Some people in the media, typically they will call up one of the close friends… so, they will become our spokesmen. Our employees will become spokespersons. That’s how. And after 15-20 days it dies down. But it keeps coming four-five years with different themes and different reasons. Sometimes loss, sometimes something, God knows. I mean somebody bought over. So, woh theek hai…
Oswal: And especially now in the social media world anybody just puts out something, anything, a small WhatsApp message or on Facebook or something, so people love to, I think, make up this kind of talk everywhere. So, it doesn’t bother us. But I think when you are big, the issue is managing the various stakeholders, your employees, your customers, regulators. One of the times when I saw SEBI, they said what’s happening in your company. So, I said, boss, nothing. There’s nothing, you don’t worry about that. So, I think the people kind of gossip around these issues.