Investing in India's Growth Opportunities

Kotak India Funds Investing in India's Growth Opportunities

KMUKS_NR093_2020Strictly Confidential: Only for the use of certain types of investment professionals including accredited investors, qualified purchasers and financial institutions. Not for the use of retail investors Kotak Group – Investment Capabilities ®

Successful asset management business with group assets under management around USD 29.96 billion*

Pioneers in setting up international business with offices across major financial markets

Offshore fund structures with sound understanding of international regulations • Fund vehicles across US (1940s act Fund), Luxembourg (SICAVs), Mauritius • Bespoke structures for institutional investors

Manage/advise assets for international investors through offshore (i.e. outside India) fund structures/mandates

Conservative & Institutional approach to investing matched with robust risk management

Sound understanding of governance structures of Indian corporates

As India specialist manager with global presence, we are committed to provide quality investment management services of global standards to our investors around the world

2 KMUKS_NR093_2020 *as on March 31, 2020 Global Presence ®

London New York Rep Office - Abu Dhabi

Dubai Singapore

Mauritius

Presence across some of the major financial markets

3 KMUKS_NR093_2020 Why India ®

The Canvas is Getting Bigger…

4 KMUKS_NR093_2020 India – More Than A Country ®

States house large populations With wide income disparity/level of development

5 KMUKS_NR093_2020 Source: Census of India, IMG World Economic Outlook, Planning Commission, CSO, Credit Suisse research India – Likely to be the fastest growing economy of size ®

Key Drivers 06 Liquidity 01 Demographics

05 Outsourcing 02 Financialisation

04 Infrastructure 03 Consumption

6 KMUKS_NR093_2020 Demographics – Young and Aware ®

Working Age Population (%) - the youngest Millennial – aware and willing – large economy around 700 mn internet broadband users

0.43 42.1% Millennial (adjusted) % of 41.0% 0.41 Total Population 39.8% 38.7% 0.39 37.6% 0.37 36.4% 35.0% 0.35 34.5% 0.33 32.5% 30.8% 0.31 0.29 0.27

0.25

2016 2017 2018

2019E 2020E 2021E 2022E 2023E 2024E 2025E Source: Jefferies Research Source: Morgan Stanley Research

• Awareness, ability (income and lower dependency), urbanization, to drive consumption

• Penetration and premiumization will drive both volume and value growth

7 KMUKS_NR093_2020 Financial Inclusion ®

~ 378mn new bank accounts opened since August 2014

Billion + Unique ID Cards (Aadhar) New customers (Jan Dhan accounts)

30 (m) Monthly UID enrolment (LHS) (m) 1,400 450 (m) No. of Jan Dhan accounts opened (m) (Rs bn) 1,400 Cumulative UID enrolment 1,200 Balance in PMJDY accounts (RHS) 25 400 1,200 1,000 350 20 1,000 300 800 15 250 800 600 200 600 10 400 150 400 5 200 100 50 200 0 0

0 0

Jul15 Jul16 Jul17 Jul18 Jul19

Oct14 Apr15 Oct15 Apr16 Oct16 Apr17 Oct17 Apr18 Oct18 Apr19 Oct19 Apr19

Jan 15 Jan 16 Jan 17 Jan 18 Jan 19 Jan 19

• Bank account is now linked to Biometric ID – Direct benefit transfer a reality • An ecosystem of financial services, with biometric ID and broadband internet access

8 KMUKS_NR093_2020 Source: UIDAI, CLSA, Morgan Stanley, RBI, Govt of India (http://www.pmjdy.gov.in/), June 2020 Consumption ®

Significant room for growth and premiumization

Consumer staples Penetration rate % Consumer staples Per capita consumption (X)

9 KMUKS_NR093_2020 Source: Jefferies estimates, company data, latest data as of 2018 Flows / Asset allocation ®

Household Savings breakdown Domestic flows – SIP ~1.2 bn a month

100 SIP inflows (Rs. bn) 70% 60% 80 50% 60 40% 30% 40 20% 20 10% 0% -1%

0 -10%

Feb/18 Feb/19 Feb/20

Nov/17 Nov/18 Nov/19

Aug/17 Aug/18 Aug/19

May/20 May/17 May/18 May/19

Rate cut to boost liquidity SIP trends

Fixed deposit rates continue to fall SIP AUM (US$ Bn) - LS 10.0 50 33% SIP AUM as a % of Total 32.3% 8.0 45 Equity AUM( Ex-ETF) 32% 31% 40 6.0 36.5 30% 35 4.0 4.40 29%

30 28%

Jun/12 Jun/13 Jun/14 Jun/15 Jun/16 Jun/17 Jun/18 Jun/19 Jun/20

Dec/18 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/19

Jul-19

Apr-19 Oct-19 Apr-20

Jun-19 Jan-20

Mar-20

Feb-20

Nov-19 Dec-19

Aug-19 Sep-19 May-20 SBI 1YR deposit rate (%) May-19

10 KMUKS_NR093_2020 Source: CLSA, AMFI, Morgan Stanley Research ®

Covid-19 Impact on India Can we turn this into an opportunity…?

11 KMUKS_NR093_2020 Covid-19 – Impact on India ®

Lockdown – The Union Home Ministry extended lockdown in containment zones till end of July. States have the right to add more restrictions while social distancing remains the norm in public places

Recovery– while the spread remains high, recoveries have seen significant improvement

Stimulus – On economic front, both fiscal and monetary policies are being pursued to minimize the impact & more measures will be forthcoming. Focus will remain on monetary and liquidity measures

Opportunities – Beyond the near term, opportunities on - Lower energy prices - Policy reform with focus on ease of doing business in India to get into global supply chains

Valuation – Focus from “survival” to “revival” to “sustainable gains” on market share gains, cost structures and leaner business models. Valuations back in line with long term trend though on subdued Covid impacted earnings

12 KMUKS_NR093_2020 Covid-19 – Situation in India is still constantly evolving ®

Confirmed cases up 3x in Jun’20; Recovery rate at 59% Fatality rate for India has remained stable at near 3% since Apr’20

Total Confirmed Cases Recovery rate 585,492 59% 48%

190,535 26% 9% 1,397 35,365

Mar'20 Apr'20 May'20 Jun'20 Mar'20 Apr'20 May'20 Jun'20

Total Active Cases Death Rate 220,114 3.3% 2.8% 3.0% 2.5% 93,322

25,148 1,239

Mar'20 Apr'20 May'20 Jun'20 Mar'20 Apr'20 May'20 Jun'20

13 KMUKS_NR093_2020 Source: India Ministry of Health and Family Welfare, Motilal Oswal Lockdown – Onus on State Governments to put more restrictions as UNLOCK 2.0 ® deem necessary

Phase 3 – To be Phase 1 – Since June 8 Phase 2 – Started July 1st decided

Dates of reopening of Relaxation in night curfew international air travel, metro rail, cinema hall, gyms, Hotels, Restaurants, Provision for more domestic swimming pools will be Hospitality Services flights and trains decided

Clearance for more than five people in the shop Dates to reopen bars, Training institutions of both theatres, entertainment parks, Religious Places of Central & State govt can social/political/academic Worship, Shopping Malls function Jul 15 onwards congregations to be decided

Opening of all monuments Schools, colleges and across the country with coaching institutions will complete security from July 6 remain closed till Jul 31

Movement now prohibited Intra-state and inter- International air travel permitted in limited 01 between 10pm to 5am 02 state travel allowed 03 manner under the Vande Bharat mission

14 KMUKS_NR093_2020 Source: CNBC TV18, Indiatimes, Indiaexpress Covid-19 – Measures taken ®

th 15 KMUKS_NR093_2020 Source: Ministry of Finance, RBI, UBS. Charts as of 7 Jul 2020 Policy rates & Inflation ®

RBI has cut reverse repo rate by 290 bps to Inflation likely to moderate below 4% 3.35% in past 18 mths RBI threshold

Reverse Repo Rate Repo Rate 3mnth CD rate 8.00 7.50 7.00 6.50 6.00 5.50 5.00 4.50 4.00 3.50

3.00

Jul 2019 Jul

Apr 2019 Apr 2019 Oct 2020 Apr

Jan 2019 Jan 2019 Jun 2020 Jan 2020 Jun

Mar 2019 Mar 2020 Mar

Feb 2019 Feb 2020 Feb

Dec 2018 Dec 2019 Aug 2019 Sep 2019 Nov 2019 Dec

May 2019 May 2020 May

• Repo rate cut by a total of 250bps to 4.0% in to boost liquidity and fight economic stress.

• Reverse repo rate has been cut by 290 bps in last 18 months.

• Inflation not a concern – further cuts possible.

16 KMUKS_NR093_2020 Source: Bloomberg, RBI, Credit Suisse estimates, UBS Monetary Policy : From liquidity to rates…everything in work? ®

10 7.6 7 Monetary transmission(bps) last 18 months 8 6.5 6.5 6.1 Repo rate -250 6 5.0 3-month CPs 3.8 6 -223 4 3.0 2.9 0.9 10-year Gsec -191 1.6 5.5 2 1.0 0.3 5-year Gsec -180 5 0 Lending rate on fresh rupee loans -114 -2 4.5 Lending rate on new vehicle loans -112 -4 4.25 4 1-year median MCLR -90 Lending rate on new housing loans -68

Lending rate on new MSME loans -58

Jun/17 Jun/18 Jun/19 Jun/20

Mar/18 Mar/19 Mar/20

Dec/17 Dec/18 Dec/19

Sep/17 Sep/18 Sep/19 Net liquidity (Rs tn) -300 -250 -200 -150 -100 -50 0

Lending and deposit rates for SBI March fiscal year-ends, April 2016 - June 2020 (%) SBI home loan rate SBI 1-year TD rate SBI MCLR 1-year • LIQUIDITY – RBI focus has been on improving liquidity 10 • RATE CUT – rates have been cut by 135bps in CY19 9 and further in CY20 by 115bps – in all 250bps rate cut 8 • RATE TRANSMISSION – Still lagging 7 • CREDIT GROWTH - Sharp cut in reverse repo rate (to 6 3.35%) to discourage banks to park surplus money with

5 RBI but risk averseness still is high

Apr-17 Apr-16 Oct-16 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 Apr-20

Jun-16 Jun-17 Jun-18 Jun-19 Jun-20

Feb-19 Feb-17 Feb-18 Feb-20

Dec-16 Dec-17 Dec-18 Dec-19

Aug-16 Aug-17 Aug-18 Aug-19 17 KMUKS_NR093_2020 Source: GoI, RBI, Spark Capital Research, Kotak Institutional Equities Foreign reserves comfortable, oil price decline a massive tailwind – ®

Forex reserves (USD bn) – All time high Net oil imports vs. Brent crude oil price

505.6 US$/bbl 500 Forex reserves ($ bn) US$ bn Net oil imports, LHS Brent, RHS 480 120 140 99 103 102 460 100 94 120 440 81 87 100 420 80 71 400 56 80 380 60 53 51 360 60 340 40 40 320 20 20

0 0

Jul/17

Oct/18

Apr/16

Jun/15 Jan/20 Jun/20

Feb/17 Mar/19

Sep/16 Dec/17 Aug/19

Nov/15 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E May/18

India has the 5th largest foreign currency reserves India’s CAD vs. sustainable levels

3700 Forex Reserve ($, bn) 3243 2% 3200 0.4% 2700 0% 2200 1383 -0.3% 1700 -0.6% -0.9% 912 -2% -1.1% 1200 507 569 -1.7% 700 312 349 411 446 449 -1.3% -1.8% -2.1% 200 -4% Current account balance as % of GDP -4.3% Lower band -4.8%

India Upper band

China -6%

Brazil

Japan

Russia

Singapore

Hongkong

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

South Korea South Switzerland*

FY21E FY22E Saudi Arabia* Saudi Note: Based on UBS analysis, threshold CAD level for India is 1.5-1.7% of GDP, assuming potential GDP growth of 6-6.5% with real annual import growth of 4-7%, net external liabilities and foreign exchange reserves (as a % of GDP) steady

th st 18 KMUKS_NR093_2020 Source: Bloomberg, CEIC, UBS. Spark, as of 30 June 2020. *as of 31 May 2020 Transformational Legislative Changes Implemented (2014-19) ®

• Informal to Formal • Robust banking system key to • Improving tax compliance economic success • Increasing tax to GDP ratio • Asset resolution- time bound • Logistics – Supply chain (<12 months) efficiencies • Fear of loosing control to change borrower behaviour Goods & Insolvency & services tax bankruptcy code

Direct benefit RBI -Inflation transfer targeting • Unique identity cards to ~1.2 bn • From growth centric monetary to people inflation target 4% + 2% • Government policies more • Long term lower inflation effective with reduced time lines outcome • Eliminating middle men • Lower cost of capital

19 KMUKS_NR093_2020 New Policies (2019-24) – Ease Of Doing Business ®

• Simplification of GST • Land Acquisition – fine balance • GST compliance between fair compensation and • Inclusion of Electricity and ease for infrastructure and Petroleum products manufacturing • Labor laws – 44 to 4

Simplify Land and Goods & Labour services tax

Divestment / Infrastructure Direct Tax • Strategic divestment & Power code • Attract global capital to fund infra • Fix the “gap” between cost of • Simplification of tax laws generation and realisation of • Corporate tax rate cut and power competitive

20 KMUKS_NR093_2020 Corporate Tax Rate ®

India's corporate tax rate amongst the lowest in EMs

40% 35% 35% 30% 25% 25% 20% 17% 15% 10% 5%

Brazil

China

Russia

Poland

Mexico

Taiwan

Vietnam

Thailand

Malaysia

Myanmar

firm)

Argentina

Indonesia

Cambodia

Singapore

India India (Old)

Philippines

India India (new)

South Africa South

South Korea South India (new mfg India (new

• The 10% cut in the corporate income tax rate and 18% tax cut for new manufacturing is one of the largest corporate tax rate cut anywhere in the world. • India offers a unique combination of large domestic market and competitive tax rates.

21 KMUKS_NR093_2020 Source: UBS The Four proposed labour codes ®

22 KMUKS_NR093_2020 Source: PIB, PRS, Kotak Institutional Equities Ease of Doing Business ®

Improvement in 'Ease-of-doing-business' the past five years has been meaningful for India

100 Improvement in ranking in last 5 years (2015-2020) 79 80 52 60 47 40 23 25 26 20 1 1 2 2 4 5 0 -4 -1 -1 -20 -13 -18

-40

India

Brazil

China

Japan

Russia

Mexico

Taiwan

Vietnam

Thailand

Malaysia

Indonesia

Singapore Hongkong

Philippines

Bangladesh

South Korea South United states United

23 KMUKS_NR093_2020 Source: World Bank, UBS Agricultural Reforms – a 1991 moment for rural India ®

Governance and legislative reforms

1) Plans to make changes to the Essential Commodities Act to enable better price realization for farmers. Plans to deregulate agriculture food stuffs including cereals, edible Amendments to Essential oils, oilseeds, pulses, onions and potatoes. 2) Stock limit will be imposed under very exceptional circumstances, famine with surge in Commodities Act prices 3) Stock limits will not apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to the export demand

1) Reforms to provide marketing choices to farmers to reduce hindrance in free flow of Agriculture marketing agricultural produce and fragmentation of markets and supply chain reforms (APMC) 2) Formulate a central law to provide adequate choices to farmers to sell price at attractive price, barrier free inter-state trade and framework for e-trading of agricultural produce

1) Bring in a facilitative legal framework to ensure that farmers get a predictable price and Agricultural produce price predictable sales of their produce. Farmers will be able to engage with processors, aggregators, large retailers, exporters, etc. in a fair and transparent manner and quality assurance 2) Risk mitigation for farmers, assured returns and quality standardization shall form integral part of the framework

24 KMUKS_NR093_2020 Source: Ministry of Finance, Kotak Institutional Equities Rural India offsetting challenged urban ®

Farm sector relatively unscathed during COVID-19 pandemic

Terms of Trade Fiscal Support Government Mother Nature Farm tractor Fertilizer Agriculture Procurement sales production sector GVA1 of Wheat Remain extremely Immense Procurement June rainfall is reached pre- Grew 7.5% Grew 5% YoY favorable. Lower support- Rural during Rabi the best in 7 COVID levels YoY in May'20 in May'20, output prices spending grew Marketing Season years, leading to in May'20 similar to the matched with 69% YoY in Apr- is highest-ever at massive best period sharper decline in May'20, following 39m tonnes, improvement in seen in late input costs 11-yr high growth beating previous area sown. 2019 of 25% in FY20 peak of 38m Water reservoir tonnes in FY13 levels at record high

25 1 KMUKS_NR093_2020 Source: Motilal Oswal. Gross Value Added Agriculture being the ray of hope and most guarded during Covid-19 ®

Kharif sowing has been impressive this year Government rural spending very strong in FY21* 89.8 Rural spending, % YoY Kharif area sown,% of normal 29.7 68.7

21.5 19.2 17.4 14.5 17.1 14.1 25.0 13.7 20.1 7.6 5.1

-7.3 -8.3

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

FY16 FY17 FY18 FY19 FY20 FY21 FY09 FY21*

Water reservoir continues at unusually higher levels

water reservoir level, % of live storage 33.3 27.0 27.6 24.9 24.5 21.5 20.8 21.8 17.1 18.8 18.4 16.4 14.7 16.2 11.8 12.0 12.4 10.6 9.3

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

26 KMUKS_NR093_2020 Source: Motilal Oswal. * Apr-May’20 Valuations – close to lower ends ®

Nifty 12 month forward Price to Book Value (x)

3.5

3.0 10 Year Avg: 2.6x

2.5 2.4

2.0

1.5

Jun-14 Jun-10 Jun-11 Jun-12 Jun-13 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20

27 KMUKS_NR093_2020 Source: Motilal Oswal Earnings yield vs Bond Yield ®

1.8 Earnings Yield (12 month forward)/G-Sec Yield Highest since 1.5 EY/BY spiked sharply It remained below 1x Jun’13 during GFC for last six years, 1.3 except for a brief period 1.0 during demonetisation 0.82 LT Avg: 0.80% 0.8

0.5

Jun'16 Jun'06 Jun'07 Jun'08 Jun'09 Jun'10 Jun'11 Jun'12 Jun'13 Jun'14 Jun'15 Jun'17 Jun'18 Jun'19 Jun'20

Dec'15 Dec'05 Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Dec'16 Dec'17 Dec'18 Dec'19 2.0 Earnings Yield (12 month trailing)/G-Sec Yield 1.6

1.2 0.77 10 Year Avg: 0.74% 0.8

0.4

Jun'06 Jun'16 Jun'07 Jun'08 Jun'09 Jun'10 Jun'11 Jun'12 Jun'13 Jun'14 Jun'15 Jun'17 Jun'18 Jun'19 Jun'20

Dec'18 Dec'05 Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Dec'15 Dec'16 Dec'17 Dec'19

Please note that the 12 month forward earnings factor in the current Covid - 19 crisis

28 KMUKS_NR093_2020 Source: Motilal Oswal Other Valuation Measures ®

Market cap to GDP Valuations are at GFC low

2.00 India premium vs EM Avg -sd +sd 1.90 1.80 1.70 1.60 1.50 Relative Valuations to 1.40 MSCI EM headed towards 1.30 1.20 historical lows 1.10

1.00

Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20

29 KMUKS_NR093_2020 Source: Bloomberg, Motilal Oswal, Citi Research Nifty Midcaps relative valuations Vs Nifty 50 has corrected back to 2013 lows ®

(7 DMA) 1.60 Midcaps Relative Valuations V/S Nifty 1.50 Nifty Midcap 12m forward PE 1.40 Relative to Nifty 12m forward PE 1.30 1.20 *2013 lows – Beginning Average 1.03 1.10 1.00 Midcap relative valuation v/s Nifty back to 2014 zone 0.90 when this leg of midcap bull run had begun

0.80

Jul/15

Oct/12 Apr/16

Jun/13 Jan/19 Jun/20

Feb/12 Mar/14

Nov/14 Dec/16

Aug/17 Sep/19 May/18

Source: Elara Securities Ltd 30 KMUKS_NR093_2020 Nifty 50 is the Largecap Index and Nifty Midcap100 is the Midcap Index Institutional Flows – Domestic Activity up ®

Foreign Flows (US$ bn) – Sell in Cash; Buy in Futures Market

29.3 24.5 20.0 17.6 16.2 14.2 3.3 2.9 7.7

-0.5 -4.6 -2.2

CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20YTD Domestic Flows (US$ bn) – Mutual funds dominate the Flows – SIP the key driver

10.2 14.0 15.9 11.9 5.3 5.9 5.3 6.0

-4.7 -4.9 -10.9

-13.0

CY13 CY19 CY09 CY10 CY11 CY12 CY14 CY15 CY16 CY17 CY18 CY20YTD

31 KMUKS_NR093_2020 Source: Motilal Oswal Securities India under-represented in Global Indices ®

India GDP Ranking and weight in MSCI Indices

Ranks 2000 2005 2010 2015 2016 2017 2018 2019 1 United States United States United States United States United States United States United States United States 48.0 47.8 42.3 53.1 53.8 51.0 54.4 55.6 2 Japan Japan China China China China China China 10.1 10.8 2.4 2.6 2.8 3.1 3.6 4.2 3 Germany Germany Japan Japan Japan Japan Japan Japan 3.9 2.9 8.7 8.1 7.8 7.9 7.6 7.2 4 United Kingdom United Kingdom Germany Germany Germany Germany Germany Germany 9.5 10.1 3.2 3.1 3.0 3.2 2.7 2.5 5 France China France United Kingdom United Kingdom United Kingdom United Kingdom India 5.2 0.5 3.7 6.7 5.9 5.5 5.2 1.1 6 China France United Kingdom France France India France United Kingdom 0.3 3.9 8.4 3.4 3.3 1.0 3.4 4.8 7 Italy Italy Brazil India India France India France 2.1 1.6 2.2 0.8 0.9 3.4 1.1 3.3 8 Canada Canada Italy Italy Brazil Brazil Italy Italy 2.2 3.2 1.0 0.8 0.8 0.8 0.7 0.7 9 Mexico Spain India Brazil Canada Italy Brazil Brazil 0.5 1.6 1.1 0.5 3.3 0.7 0.9 0.9 10 Brazil Korea Russia Canada Korea Canada Canada Canada 0.5 1.3 0.9 2.8 1.5 3.1 3.6 3.0 Note: Data for MSCI Weights is as of Jul 2, 2020

32 KMUKS_NR093_2020 Source: IMF, RIMES, MSCI, Morgan Stanley Research ®

Covid 19 – keep the big picture in perspective

33 KMUKS_NR093_2020 Healthcare – a sector in focus ®

• Increased Generic sourcing from India – Indian generics have 45% vol share (26% in 2014) in US generics • Policy Support Intermediates / APIs– Mar 2020. 3 bulk drug parks and Production linked Incentives (PLI) for 53 critical drugs • Medical Equipment Parks

34 KMUKS_NR093_2020 Digital / E-commerce upsurge ®

India e-retail Market Growth @ 30% CAGR Online penetration across categories in India with further room of expansion

Source: Company reports, sourcing Crisil (Jan-20)

M-wallet players approximate user base*

Source: Citi Research; *based on media reports Source: Euro Monitor, Morgan Stanley Research. Note: Above data is for C2019.

www.kotakmutualfund.com 35 KMUKS_NR093_2020 Consolidation in a banking crisis – opportunity for the fabulous four? ®

36 KMUKS_NR093_2020 Large deals / offers taken up by long term investors ®

Date Counter Size ($ mn) Seller Date Counter Size ($ mn) Seller 6-Feb ADGREG (to Total SA) 494Adani Green 2-Jun KMB 924 QIP 6-Mar SBICARDS 1,400IPO 3-Jun HDFCLIFE 173 Promoter 3-Jun KMB 987 Promoter 27-Mar HDFCLIFE 293 4-Jun HDFCLIFE 263 Standard Life 14-Apr METROHL 99PE 5-Jun RIL JIO (Silver Lake) 602 RIL 22-Apr RIL JIO (Facebook) 5,771RIL 5-Jun RIL JIO (Mubadala) 1,204 RIL 3-May RIL JIO (Silver Lake) 749RIL 7-Jun RIL JIO (ADIA) 753 RIL 15-Jun ARTO 29 SmallCap World Fund 6-May HUVR 3,350GSK 16-Jun 3M 67 Ruane Cunniff 8-May RIL JIO (Vista) 1,506RIL 17-Jun SI 23 Venkatesh Investment 13-May RIL 7,050Rights 19-Jun ICICIGI 295 ICICI Bank 17-May RIL JIO (General Atlantic) 874RIL 22-Jun IPRU 111 ICICI Bank 22-May RIL JIO (KKR) 1,506RIL 23-Jun SIEM 1,206 SIEM Parent (Internal) 24-Jun EMBASSY 130 Blackstone 26-May BHARTI 1,120Promoter 29-Jun LAURUS 84 Bluewater TOTAL 24,212 Total 6,852

www.kotakmutualfund.com 37 KMUKS_NR093_2020 Source: Motilal Oswal Our Approach to Indian Equity Market ®

A portfolio with focus on domestic growth themes with opportunistic midcap allocation

38 KMUKS_NR093_2020 Kotak Funds ®

 Investment Objective:

• The Fund seeks to achieve long term capital appreciation.

 Investment Strategy:

• Active management • The Fund invests in equity and equity linked instruments* of companies registered in India and listed on the major Indian stock exchanges or having a substantial proportion of their businesses in India. • Allocation to sectors and capitalization bands varied according to the Portfolio Manager’s view of the market. • The Investment style is a mix of top down and bottom up research along with macro and economic analysis. • Large cap stocks are predominantly researched on a top-down approach, while the mid cap ideas are researched on a bottom-up approach.

39 KMUKS_NR093_2020 Disclaimer: The fund does not guarantee that it will achieve its objective. * Please refer to the ‘Prospectus' for more details on the equity and equity linked instruments Investment Universe Offers Greater Diversity ®

Large Caps Mid/Small Caps

• Larger number of researched companies • Large number of listed companies in India • Play on the ‘Indian Macro Story’ • Immense opportunities for bottom up • Exposure to potential market leaders in each sector portfolio construction • Higher correlation to benchmark indices • Exposure to emerging domestic themes (SENSEX, NIFTY50) • Investments in potential ‘large caps in making’ • Increased Corporate Governance practices • Large diversity of stocks provides broad based • Liquid stocks representation across sectors

Indian Market Number of companies % of Total Market Cap (RHS) 2,500 100%

2,000 74% 2,278 80%

1,500 60%

1,000 40% 19% 372 500 20% 100 250 5% 2% - 0% LargeCap MidCap SmallCap I SmallCap II

Note: The universe comprises of top 3,000 stocks by market cap, as of June 30, 2020 40 KMUKS_NR093_2020 Source: Bloomberg Diversified strategy across different segments of the market ®

NSE500 Index (500 stocks – Market Cap in US$ mil)

(# of companies: 100) (# of companies: 150) (# of companies: 250) Largest Smallest Market Cap Market Cap

122,827 2,989 746 33

Large Cap Mid Cap Small Cap

Diversified strategy

Different segments of the market

41 KMUKS_NR093_2020 Source: Bloomberg. Data as of 29th May 2020 Midcaps have Potential To Generate High Returns ®

Benefit from Domestic Economy  Mid cap companies belong to high growth sectors or have niche market presence and are positioned to benefit from growing economy. Investors can also benefit from Earnings growth and Price/Earnings (P/E) multiple expansions in the future.

High Growth Potential  Over the long term, business of midcap companies tend to exhibit significantly higher growth in revenues and earnings compare to Midcaps broader market, which also reflects in the outperformance of their Stocks stocks over the long term. How they generate Wealth Re-Valuation Opportunities  Mid cap companies are relatively under-researched than large cap companies. Hence, these present fertile grounds to exploit significant gaps between market price and intrinsic values, thereby generating higher returns than the market over a period of time.

Simplicity of Analysis  Most mid cap companies are simpler to analyse as they are present in single business and are thus pure plays. Thus, some of these companies might present opportunities to enter into niche or sunrise industries, which might not be possible in a large company.

42 KMUKS_NR093_2020 Portfolio Construction Approach ®

Sector level Stock level diversification diversification

Multi-level approach with Market Capitalization risk as spread backdrop Buying uncorrelated businesses

Businesses at different stages of business lifecycle

43 KMUKS_NR093_2020 Kotak Funds ®

44 KMUKS_NR093_2020Diversiﬁcation does not protect against loss in a declining market. Stock selection: ®

High quality growth companies at reasonable valuations Stock Selection Process

M V

No of Listed stocks in No of stocks with market No. of stocks under No of stocks in the India: ~3000 cap of more than $ 200 research coverage: portfolio: Mandate mn: ~575 335 (~85% of India’s M- specific cap)

45 KMUKS_NR093_2020 Investment Philosophy ®

Business

• Large addressable market • Strong competitive position B • Scalability • Sustainability

Management B M • Strong track record • Sound capital allocation M • Long term strategic vision • Corporate Governance / Transparency / Accountability

Valuation V • Strong Balance Sheet V • ROIC and ROE • Strong free cash flow generation  Growth bias with 2-3 years business horizon  Bottom up stock picking approach

46 46 KMUKS_NR093_2020 Stock Selection driven by research team ®

Experienced Research & Investment Team

12 members strong research team

Cover ~85% of market cap in India

Each member is sector specialist Covers entire spectrum of stocks from large to small Sectors Covered ~ 26 cap Stocks Covered ~ 338

47 KMUKS_NR093_2020 UNPRI and ESG ®

 Kotak Mahindra Asset Management (KMAMC and KMAMS) has signed the UNPRI • Kotak Mahindra Asset Management Company (Kotak Mutual Fund) is the first Indian asset management company publicly committing to make its investment decisions in a more responsible and sustainable manner using the PRI’s voluntary framework • While the six Principles themselves are voluntary and aspirational, the commitments provide direction for our responsible investment efforts  Entered into an agreement with a third party provider—Sustainalytics—for their inputs on various companies and their ESG score. The agreement encompasses the following research output: • ESG ratings: Starting with a research universe consisting of up to 250 Indian companies part of Sustainalytics’ current research universe. • Core ESG ratings: In addition, Sustainalytics will provide us with core ratings research (and controversy analysis) on a list of companies which we have additionally provided • We may also request for bespoke core research coverage for additional companies during the year

48 KMUKS_NR093_2020 ESG - A three pronged approach – the 3 Es ®

 Evaluation - Incorporating ESG scores into our BMV framework for the evaluation of companies • Fundamental analysis bedrock of investment decisions. Our investment philosophy of Business, Management and Valuation, focuses on sustainability of business and corporate governance • Over and above, we also believe that ESG issues can influence investment risk and return. Signing with UNPRI would strengthen our commitment to incorporating ESG practices into investment decisions and publicly demonstrate our commitment to do so • Publishing ESG scores as part of the valuation sheet  Engagement with companies on their ESG policies • Engaging with companies on their ESG related policies B M • Will further collaborate with companies to help improve ESG scores  Exclusion – based on environmental and social factors • Environment – focus on fossil fuels • Social – Focus on Tobacco and gambling V • Controversy – controversial weapons, weapons of mass destruction

49 KMUKS_NR093_2020 Kotak India Growth Fund – A Multicap Fund ®

 40-65 stocks Portfolio  Sector agnostic Composition  Flexibility to invest up to 1/3rd of portfolio in mid market

 Top Down Sector allocation Investment  Bottom-up stock selection Approach  Invest for long term for compounding opportunities

 Sustainable & Scalable businesses Investment  Competent management – Strong execution and capital allocation philosophy policies  Stable cash flow / healthy return ratios

 Top 5 sectors make up ~73% of the fund Portfolio  Liquidity profile ~100% of portfolio can be liquidated in 7 days Breakup  Weighted Avg. Mkt cap $38.26 bn, Median Mkt cap $6.73 bn

50 KMUKS_NR093_2020 Kotak India Growth Fund: Sector level breakdown ®

Sector level breakdown - GICS Sector level breakdown – AMFI1 Utilities, Consumer Real Estate, Information Telecom, Cement & Consumer 1.3% Communication Discretionar Metals, Automobile, 2.1% Technology, 3.5% Cement Goods, Services, 3.5% y, 8.7% 1.4% 5.5% 11.1% Products, 11.0% Consumer Materials, Textiles, 4.1% Staples, Industrials, 6.8% 1.4% 5.9% Construction 8.5% Pharma, , 6.2% 5.3% Information Energy, Technology, 12.0% 11.1% Energy, Financial 13.9% Financials, Services, Health Care, 31.1% 31.1% 6.2% Industrial Manufacturing, 1.9%

Source: Internal Data, as on 30 Jun 2020 51 KMUKS_NR093_2020 1 Association of Mutual Funds in India Kotak India Growth Fund: Active positions & sectors ®

Active positions from benchmark Active sectors from benchmark

Source: Internal Data, as on 30 Jun 2020 52 KMUKS_NR093_2020 Kotak India Growth Fund: Portfolio breakdown ®

Top 10 holdings comprise ~48.8% of portfolio

HDFC Bank Ltd

Reliance Industries Ltd

ICICI Bank Ltd

Infosys Ltd

Tata Consultancy Services Ltd

Housing Development Finance Co

Bharti Airtel Ltd

Hindustan Unilever Ltd

Larsen & Toubro Ltd

Bharat Petroleum Corp Ltd

0.0 % 2.0 4.0 6.0 8.0 10.0

Source: Internal Data, as on 30 Jun 2020 53 KMUKS_NR093_2020 Portfolio breakdown: Business cycle ®

Portfolio divided into 3 broad buckets based on underlying thesis Risk Mitigation

Steady Emerging Mispriced businesses businesses businesses % Indicative range

Compounding Higher earning  Steady businesses: 60-100% Normalization of Objective returns & low growth + potential re- valuation volatility rating  Emerging businesses: 0-25%

No. of 33 7 13  Mispriced businesses: 0-25% stocks

% of 69.35% 8.73% 19.06% portfolio

Source: Internal Data, as on 30 Jun 2020 54 KMUKS_NR093_2020 Portfolio breakdown: Market capitalization ®

Unconstrained portfolio across market capitalization with bias towards midcap stocks

Breakdown by market cap Risk Mitigation

Small cap Cash & others 2.25% 2.86%

Mid cap 19.21% Large cap  Small cap restricted to 10% of portfolio 75.68%

Median Market Cap ~$6.73bn Weighted average market cap ~$38.26bn

• Top 100 stock by market cap considered as large cap – cut off at ~$ 3.53bn • 101-350th stock by market cap – lower bound at ~$485.18mn

Source: Internal Data, as on 30 Jun 2020 55 KMUKS_NR093_2020 Kotak India Midcap Fund ®

 65-85 stocks Portfolio  Sectoral agnostic Composition  Flexibility to invest 1/3rd of portfolio in large caps

Investment  Bottom-up stock selection Approach  Invest for long term for compounding opportunities

 Sustainable & Scalable businesses Investment  Competent management – Strong execution and capital allocation philosophy policies  Stable cash flow / healthy return ratios

 Top 5 sectors make up ~63.6% of the fund Portfolio  Liquidity profile ~ 89% of portfolio can be liquidated in 30 days Breakup  Wt avg mkt cap $ 6.87 bn, Median at $1.98 bn

56 KMUKS_NR093_2020 Kotak Funds – India Midcap Fund: Sector level breakdown ®

Sector level breakdown - GICS Sector level breakdown – AMFI1

Services, Fertilisers & Cement & Communicat Consumer Telecom, Real Estate, 2.7% Pesticides, Automobile, Cement Utilities, ion Services, Discretionar 1.4% 0.7% Chemicals, 2.5% 7.1% Products, Information 3.9% 1.4% y, 14.7% Information 3.0% 2.8% Technology, Consumer Technology, Construction 3.7% Materials, Staples, 3.7% , 2.9% 15.7% 9.9% Textiles, 3.8% Consumer Pharma, Goods, Industrials, 20.4% 11.6% 11.5% Financials, Financial Health Care, 18.6% 13.4% Services, 18.6%

Energy, Industrial Energy, 2.1% Manufacturing, 5.9% 5.6%

Source: Internal Data, as on 30 Jun 2020 57 KMUKS_NR093_2020 1 Association of Mutual Funds in India Kotak Funds – India Midcap Fund: Active positions & sectors ®

Active positions from benchmark Active sectors from benchmark

Source: Internal Data, as on 30 Jun 2020 58 KMUKS_NR093_2020 Kotak Funds – India Midcap Fund: Portfolio Breakdown ®

Top 10 holdings comprise ~29.2% of portfolio

ICICI Bank Ltd

Divi's Laboratories Ltd

SRF Ltd

Britannia Industries Ltd

Dabur India Ltd

Indraprastha Gas Ltd

Atul Ltd

Bata India Ltd

MRF Ltd

Aavas Financiers Ltd

% 0.0 1.0 2.0 3.0 4.0 5.0

Source: Internal Data, as on 30 Jun 2020 59 KMUKS_NR093_2020 Portfolio breakdown: Business cycle ®

Portfolio divided into 3 broad buckets based on underlying thesis Risk Mitigation

Steady Emerging Mispriced businesses businesses businesses % Indicative range

 Steady businesses: 50-80% Compounding Higher earning Normalization of Objective returns & low growth + potential valuation  Emerging businesses: 5-25% volatility re-rating

No. of 45 13 23  Mispriced businesses: 5-25% stocks % of 59.31% 15.58% 20.99% portfolio

Source: Internal Data, as on 30 Jun 2020 60 KMUKS_NR093_2020 Portfolio breakdown: Market capitalization ®

Unconstrained portfolio across market capitalization with bias towards midcap stocks

Breakdown by market cap Risk Mitigation

Small cap Cash 3.82% 3.24% Large cap 26.73%

 Small cap restricted to 20% of portfolio 66.21% Mid cap

Median Market Cap ~$1.98bn Weighted average market cap ~$6.87bn

• Top 50 stocks by market cap considered as large cap – cut off at ~US$ 6.83bn • 51-350th stock by market cap – lower bound at ~$485.18mn

Source: Internal Data, as on 30 Jun 2020 61 KMUKS_NR093_2020 Portfolio focus – Current Investment themes ®

Unorganised to Banks, Home Building, Retailing, Organised Auto components

Capital goods, rural sector, farm IncreasedIncreased implements, construction, governmentgovernment cement spendingspending

Consumer durable, light Discretionary electrical equipment, media, consumption QSR, retail

Gas, capital goods, renewable Clean-Green India power

Physical to Insurance, banks, capital market financial companies savings

62 KMUKS_NR093_2020 Summary ®

 India Is Fast Emerging On The Global Landscape

• India ranks 5th in nominal GDP • India ranks 2nd in working age population; 67% is of working age • Structural reforms and political stability to de-risk economy and markets  India Growth Story Offers Different Opportunities At Different Points Of Time

• Demographics led consumption story • Financial Services • Infrastructure • Outsourcing  A Dynamic Market Environment Requires A Flexible Strategy

• Kotak strategies capture emerging opportunities across the Indian market depending upon risk appetite

63 KMUKS_NR093_2020 Trends to Amplify ®

01 02 03 04

De-globalization Digitalization Diversification Darwinism (nationalism) (of risk and (consolidation) supply sources)

64 KMUKS_NR093_2020 Source: Kotak Institutional Equities Key Risks ®

Macro Risks • COVID 19 – potential second wave • Rating – risk of a downgrade • Banking / NBFC Sector – needs capital to provide capital Macro Opportunities • Oil prices – Long term benign energy prices • Outsourcing –benefit from potential shift of manufacturing • Flows – reweighting in global indices • Rural economy – Normal Monsoons

Equity Markets • Corporate earnings – still in downgrade mode • Flows – global flows have been volatile • Midcap Segment - Volatility

65 KMUKS_NR093_2020 Important Notice ®

This document is not intended as a recommendation or for the purpose of soliciting any action in relation to the investment funds or any investments and is not intended as an offer to sell shares in the funds. The private placement memorandum of the Funds or this document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other materials in connection with the offer or sale, solicitation or invitation for subscription or purchase, of interests to be issued from time to time by the Funds may not be circulated or distributed, nor may the interests be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to an accredited investor pursuant to Section 305(1) of the SFA, (iii) or otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. In the preparation of this document we have used information that may be from publicly available sources, from third parties or developed in-house. Information gathered & material used in this document is believed to be from reliable sources. However, no representation, undertaking or warranty (express or implied) is given as to its accuracy or completeness, and the content may change without notice. No liability is owed to any persons with respect to the information contained in this document. For data reference to any third party in this material no such party will assume any liability for the same. This document may also contain certain statements, estimates and projections that are "forward-looking statements. We do not make any representations or warranties (express or implied) about the accuracy of such forward-looking statements. Actual outcome of estimates and projections could differ materially from forward-looking statements and users of this document should not to place undue reliance on forward-looking statements. The India Growth Fund and The India Mid Cap Fund are sub-funds of Kotak Funds which is a open ended investment company organized as a Societe d'Investissement a Capital Variable (SICAV) under the laws of the Grand Duchy of Luxembourg and is registered under Part I of the Luxembourg law of 20 December 2002 relating to undertakings for collective investment. Kotak Funds is operated under the requirements of the European Union's Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) and is regulated by Luxembourg's Commission de Surveillance du Secteur Financier (CSSF). The address of the CSSF is 110, route d'Arlon L-2991 Luxembourg (Telephone No. : (352) 26 25 1-1 Facsimile No. : (352) 26 25 1-601). The investments of Kotak Funds into India is undertaken through various entities incorporated in Mauritius regulated by the Financial Services Commission, Mauritius. 66 KMUKS_NR093_2020 Important Notice ®

Distribution of this document is strictly restricted by applicable laws and regulatory requirements of all countries in which it is made available and is intended only for the use of persons to whom it may legally be made available under local qualification criteria, such as certain types of investment professionals, accredited investors, professional investors and financial institutions. This document is not intended to be accessed by retail customers. The funds cannot be made available to investors who do not meet the eligibility criteria applicable to their country. Protections afforded by local legal and regulatory systems may have limited applicability to investments in this funds.

You should consult your professional adviser if you are in doubt about the strict restrictions applicable to the use of this material, regulatory status of Investment, applicable regulatory protection, associated risks and suitability of the investments to your objectives. With respect to information given on access routes for investments in Indian markets, there are various conditions that apply to be able to access India and all these requirements have not been captured in the presentation. Investors must take professional advice in deciding a route suitable to their particular circumstances for investments in Indian markets.

Kotak Mahindra Asset Management (Singapore) Pte. Ltd. (“KMAMS”) whose registered office is at 16 Raffles Quay #35- 04A, Hong Leong Building, Singapore. Phone: +65 63956970 is regulated by the Monetary Authority of Singapore and is also registered as an investment adviser with the Securities and Exchange Commission, USA. . This document has been prepared by KMAMS and is communicated by the following, whose prior written consent must be obtained before onward distribution or communication to any other person: Kotak Mahindra (UK) Ltd (Dubai Branch), (which is regulated by the Dubai Financial Services Authority) Office No. 701, Level 7, Tower 2, Al Fattan Currency House, DIFC, P.O. Box 121753, Dubai, UAE. Phone: +9714 3848900.

Kotak Mahindra (UK) Ltd, (which is regulated by the Financial Conduct Authority in the United Kingdom) 8th Floor, Portsoken House 155-157, Minories London EC3N 1LS, Phone: +44 20 7977 6900.

Kotak Mahindra (UK) Ltd (Singapore Branch), (which is regulated by the Monetary Authority of Singapore), 16 Raffles Quay #35- 02/03, Hong Leong Building, Singapore. Phone: +65 6290 5590. 67 KMUKS_NR093_2020