NUVAMA - Nuvama Wealth Management Limited Share Price

Management Outlook:
Nuvama's management remains optimistic about India's long-term structural growth, expecting short-term market volatility to present opportunities. They emphasized a diversified business model (wealth/asset management, capital markets, asset services) to balance cyclicality. Focus areas include scaling core businesses (wealth/asset management), improving capital efficiency (targeting best-in-class ROE), enhancing revenue quality (annuity/ARR-driven streams), and leveraging technology for productivity. The loan book (calibrated for ROE improvement) is set to expand, and offshore expansion (Dubai/Singapore) is progressing. Regulatory shifts (e.g., SEBI's F&O norms) may impact broking but are offset by growth in recurring revenue segments.

Key Highlights:

1. Financial Performance:

   • Client assets: Rs.4.5 lakh crore (+36% YoY).
   • Revenue (9M FY25): +45% YoY; PAT: Rs.731 crore (+76% YoY).
   • ROE: 32% (consistent for 9M).

2. Business Segments:

   • Wealth Management: AUM crossed Rs.1 lakh crore (+38% YoY); MPIS net flows at Rs.5,800 crore (9M). Focus on managed products (65"“70% of flows).
   • Private Wealth: ARR assets +38% YoY; offshore operations (DIFC) live.
   • Asset Management: AUM at Rs.11,300 crore; SEBI application for mutual fund license (SIF category).
   • Asset Services: AUM +57% YoY (Rs.1.3 lakh crore); dominant in AIF/PMS onboarding.
   • Capital Markets: 18% equity IPO market share; steady institutional equities despite volume dip.

3. Strategic Priorities:

   • Tech investment: Launched AI-driven training (NUWAI), self-clearing transition (cost efficiency).
   • Geographic expansion: Dubai operational; Singapore planned.
   • Product diversification: New funds (CRE, Flexi-cap), focus on external distribution.

Near-Term Catalysts:

• Q4 recovery in NII (temporary Q3 dip from self-clearing/hedging costs).
• Mutual fund license approval, CRE fund deployment.
• Market share gains in investment banking (57 deals in CY24).

Question 1 (Prayesh Jain, Motilal Oswal Financial Services):
"Firstly, on wealth, could you give me some understanding on the breakdown of your managed products category... And the yield pressure in the wealth segment... On private, breakdown of AUM... how should we look at yields... And last question would be on asset services... split between domestic and international... concentration risk?"
Answer Summary:
Managed products in Wealth include PMS, AIF, and MF (65"“70% of flows), excluding insurance. Yield pressure in Wealth is temporary due to NII dip from self-clearing adjustments (reversing in Q4). Private ARR AUM comprises non-correlated assets (real estate, PE, credit) with sustainable yields of 80"“85 bps. Asset Services split is 25% domestic and 75% international, with diversification reducing concentration risks.

Question 2 (Lalit Deo, Equirus Securities):
"In the clearing business... how that yields have increased... building presence in Dubai/Singapore... RMs recruited and growth plan?"
Answer Summary:
Clearing yield rose due to self-clearing adjustments (transferred wealth clients to Wealth division). Offshore expansion: Dubai (3 RMs, breakeven in 5"“6 months) prioritized over Singapore due to competitive intensity. Yields to stabilize at ~150 bps.

Question 3 (Abhijeet Sakhare, Kotak Securities):
"Asset class mix for Wealth and Private ARR assets... quantify synergy benefits across businesses?"
Answer Summary:
Private ARR assets focus on non-correlated classes (real estate, credit). Wealth ARR is 50% listed equity. Synergies (e.g., cross-selling between IB/wealth) add 10"“15% revenue via cost-efficient collaboration.

Question 4 (Dipanjan Ghosh, Citigroup):
"Activity levels for Wealth flows... transactional income quality... expense levers if markets remain sluggish?"
Answer Summary:
No material slowdown in Jan flows; transactional income is stable (fixed income dominates). Expense levers include discretionary cost cuts (travel, marketing) and variable pay adjustments.

Question 5 (Mohit Mangal, Centrum Broking):
"RM attrition in Q3... cost-to-income ratio sustainability amid competition?"
Answer Summary:
Zero attrition in top RMs during Q3. Cost-to-income ratio sustained via variable-heavy compensation and platform monetization advantages (product/investment banking access).

Question 6 (Vivek Ramakrishnan, DSP Mutual Fund):
"Loan book calibration... growth strategy?"
Answer Summary:
Loan book optimized via ESOP/product restructuring (shorter tenures, fee focus). Growth tied to scaling with client base (non-MTF products like loans against securities).

Question 7 (Ashish Agarwal, Oaklane Capital):
"PAG's long-term ownership"¦ breakeven timeline for asset management?"
Answer Summary:
PAG (fund lifecycle to 2030) aligns strategically but may exit per PE norms. Asset Management breakeven expected at ~INR 20,000 crore AUM (12"“15 months).

Question 8 (Sanketh Godha, Avendus Spark):
"Revenue/AUM concentration in MLDs"¦ waterfall of client additions vs. mining?"
Answer Summary:
MLDs contribute <2% revenue. Client additions (20"“30% of flows) and mining (70"“80%) drive growth, with new clients ramping up gradually.

Question 9 (Nishant Shah, Millennium Capital):
"Deal pipeline postponement"¦ F&O clearing outlook?"
Answer Summary:
Deal pipeline intact (filings continue); F&O clearing resilient due to India's derivatives appeal. Client additions (hedge funds) ongoing despite volatility.

Question 10 (Anirudh Agarwal, Valuequest):
"Lending business ROE"¦ MPIS growth drivers?"
Answer Summary:
Lending ROE improved to 22% via cross-selling (broking/wealth). MPIS growth driven by fixed income/PMS and seasonal insurance uptick in Q4.