Any current/future new fundraising through debt or equity?

Nuvama Wealth Management is targeting to raise INR 4,000-5,000 crores through 3 private market funds over the next 3 quarters, including a pre-IPO private equity fund called Crossover 4. They plan to start a new product category, private credit, by the end of Q3. The company has also applied for a Mutual Fund (MF) license to start a Scheme of Investment Funds (SIF) business; the SEBI inspection has happened, and they expect to launch this within 4-5 months after license approval. No specific mention of new equity fundraising was made; private equity deal talk is a shareholder matter and not ex

Any current/future capex/capital investment/strategic investment?

Nuvama Wealth Management is planning to add two value-added services in Asset Services: registrar and transfer agent (RTA) service and trusteeship services. Subsidiaries for these will be floated within the next 6 months. In Asset Management, focus is on deployment of funds, including raising a second leg of a commercial real estate fund targeting an additional INR 2,000-2,200 crores over the next 6-9 months. Private credit is a new product category planned to start by the end of Q3. Investment in technology is ongoing, including portfolio solutions tools (MARS) and a unified digital pla

Future growth expectations in sales/revenue/volumes?

Wealth Management and Asset Management businesses are expected to grow faster than last year. Asset Services will still achieve growth, despite challenges like the Jane Street impact. Institutional Equity (IE) might face some impact with an estimated INR15-16 crores PAT hit this year but expected to resume growth afterward. Overall, the company aspires to grow net profits by 20-25% compounded annually over the next 10 years. The mutual fund asset base expanded from INR50 lakh crores to INR75 lakh crores in two years, expected to compound significantly. Market penetration is currently below 15%

Future growth expectations in earnings/operating earnings/profits/EPS?

Aspiration to achieve similar 20-25% compounded growth in net profits over the next 10 years, driven by expanding market size (Page 16). Wealth Management and Asset Management businesses expected to grow faster than last year, showing strong growth momentum (Page 17). Asset Services growth to remain positive despite some headwinds; Institutional Equity may see an INR15-16 crore PAT impact this year but will resume growth thereafter (Page 17). Operating PBT for Wealth business grew 18-19% YoY, with a steady cost-to-income ratio (~66%) indicating efficient growth (Pages 6-7). Managed Pro

Current/ Expected Orderbook/ Pending Orders?

As per Ashish Kehair, the current assets in MPIS (Wealth) are about INR 32,000-33,000 crores. Approximately 30% of MPIS assets (~INR 7,000-8,000 crores) contribute to the orderbook. The Private division adds another INR 12,000 crores. Total orderbook/pending orders currently stand at around INR 19,000-20,000 crores. The company is reasonably confident about delivering on this orderbook.

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Nuvama Wealth Management LtdQ2 FY25Capital Markets

Nuvama Wealth Management Ltd Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,752P/E: 25.5Market Cap: ₹26.6K CrSector: Capital Markets

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Wealth Management and Asset Management businesses are expected to grow faster than last year.
→Asset Services will still achieve growth, despite challenges like the Jane Street impact.
→Institutional Equity (IE) might face some impact with an estimated INR15-16 crores PAT hit this year but expected to resume growth afterward.
→Overall, the company aspires to grow net profits by 20-25% compounded annually over the next 10 years.
→The mutual fund asset base expanded from INR50 lakh crores to INR75 lakh crores in two years, expected to compound significantly.
→Market penetration is currently below 15% and expected to double in 10 years, leading to an 8x-9x market size expansion.
→Transactional revenues and flows in private divisions show strong momentum with net flows around INR2,900 crores quarterly.
→Capital markets' activity is recovering with improved secondary market volumes and IPO pipeline revival anticipated in H2.

Margin guidance

Category 3

→Aspiration to achieve similar 20-25% compounded growth in net profits over the next 10 years, driven by expanding market size (Page 16).
→Wealth Management and Asset Management businesses expected to grow faster than last year, showing strong growth momentum (Page 17).
→Asset Services growth to remain positive despite some headwinds; Institutional Equity may see an INR15-16 crore PAT impact this year but will resume growth thereafter (Page 17).
→Operating PBT for Wealth business grew 18-19% YoY, with a steady cost-to-income ratio (~66%) indicating efficient growth (Pages 6-7).
→Managed Products and Investment Solutions to drive more than 50-60% growth in annuity income stream this year (Page 3).
→Overall company revenue grew 15% YoY with client assets growing 19%; growth expected to sustain through focused client acquisition and product expansion (Page 6).
→No significant negative impact from external developments on core business profitability or growth prospects (Page 17).

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Fundraise plans

Yes

→Nuvama Wealth Management is targeting to raise INR 4,000-5,000 crores through 3 private market funds over the next 3 quarters, including a pre-IPO private equity fund called Crossover 4.
→They plan to start a new product category, private credit, by the end of Q3.
→The company has also applied for a Mutual Fund (MF) license to start a Scheme of Investment Funds (SIF) business; the SEBI inspection has happened, and they expect to launch this within 4-5 months after license approval.
→No specific mention of new equity fundraising was made; private equity deal talk is a shareholder matter and not expected to impact company growth or performance.
→Net debt increased by INR 1,000 crores this quarter, used partly for loan book growth and working capital, but this is operational rather than a new fundraising effort.

Order book

→As per Ashish Kehair, the current assets in MPIS (Wealth) are about INR 32,000-33,000 crores.
→Approximately 30% of MPIS assets (~INR 7,000-8,000 crores) contribute to the orderbook.
→The Private division adds another INR 12,000 crores.
→Total orderbook/pending orders currently stand at around INR 19,000-20,000 crores.
→The company is reasonably confident about delivering on this orderbook.

Capex plans

Yes

→Nuvama Wealth Management is planning to add two value-added services in Asset Services: registrar and transfer agent (RTA) service and trusteeship services. Subsidiaries for these will be floated within the next 6 months.
→In Asset Management, focus is on deployment of funds, including raising a second leg of a commercial real estate fund targeting an additional INR 2,000-2,200 crores over the next 6-9 months.
→Private credit is a new product category planned to start by the end of Q3.
→Investment in technology is ongoing, including portfolio solutions tools (MARS) and a unified digital platform ("One Platform") to support a growing number of relationship managers (potentially 3,000-4,000 over 3-4 years).
→No material capital expenditure impacts expected from the private equity shareholder matter, as it is a shareholder issue with no bearing on company operations.

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