NUVAMA — earnings call

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Prepared remarks

SGA, INVESTOR RELATIONS ADVISOR · Management

Nuvama Wealth Management Limited January 27, 2026

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to the Nuvama Wealth Management Limited Q3

We take the first question from the line of Manas Agrawal from Sanford C.

Bernstein.

Manas Agrawal

I wanted an update on the HFT business within the asset services vertical.

A, how is the activity trending?

And B, your yields have moved up as an offset to Jane Street issues.

How sustainable is that bump up in yield, so that is one.

B, I wanted an update on the litigation that you've talked about in your annual reports in the past with Anugrah.

And C, on the PAG situation, if you have anything to share?

Those are my questions.

Ashish Kehair

So, activity perspective on HFT, I think post the order of SEBI, we saw about 30-35 days when the market was adjusting to basically understand how the regulator is looking at it.

And then I think regime change also happened somewhere around September and the signals from the regulator were reasonably positive and their whole discussion around weekly options and all also subdued.

So, I think activity now is actually back at similar levels, or even more, and volume is also reflective of that and newer HFTs have started signing up.

So maybe it was a 30-40 day period of adjustment, and then it all came back.

Yields, Manas, as we've already mentioned earlier also is a function of the split of the collateral between deposits and G-Sec. It's a function of how the overall service is being priced.

There's a broking relationship.

There's a custody relationship.

There's a clearing relationship.

We are able to operate as a single one-stop shop and can give a bundled pricing.

Given the size of the clients and how they have looked at the overall pricing, right now, the proportion of deposits should be higher than G-Sec hence the yields have gone up.

If you ask me, we can forecast for a 12-month period.

And in my view, it should remain between 2.6 to 2.9 kind of range, should not migrate much unless we see significant interest rate movement on the either side.

Minor movement will be absorbed.

On Anugrah litigation, I think one major step that has happened is that for the last 2 years, unfortunately, whenever the case was coming for hearing, no significant discussion could Nuvama Wealth Management Limited January 27, 2026 happen because there were maybe other issues which the Supreme Court was handling which was of higher importance.

But this time, they have formally admitted the case.

Till now the admission itself was going up, down, up, down, formally admitted.

And I think now the hearing will start.

But I don't think any decision looks to be reached in near future.

It may take a couple of years.

But our positioning, our understanding, our assessment of the situation, we are fairly confident that this will be favorable for the company because whatever we did was in accordance with the law then.

On PAG, you had any specific question?

Manas Agrawal

No, just wanted to check any change in position.

I think in the past, you have said that as management, there is something that you cannot change.

But is there any change in the position?

Ashish Kehair

Not really.

I mean, as I've always maintained that they are financial sponsor and there will be a change of ownership at some point in time.

But at this point in time, there is nothing that has changed in the recent past.

Moderator · Conference Operator

We take the next question from the line of Prayesh Jain from Motilal Oswal Financial Services Limited.

Prayesh Jain

Just few questions.

Firstly, on Nuvama Wealth, if I look at the MPIS revenues sequentially, they have been flat.

You had incremental money coming in from flows, they should have an equity mark-to-market positive, yet the revenues on MPIS appears to be flattish sequentially.

So what would you ascribe that to?

Ashish Kehair

See, basically, composition of the MPIS also matters.

Now if you break MPIS into 2 buckets, Prayesh, there is managed products and there is investment solution.

So managed product is your classic AIF, MF, PMS, and investment solution is your fixed income, MLD, insurance and largely unlisted and syndication deals.

So if in the investment solutions bucket, there are certain categories which have different kinds of yields.

So your overall flow may not directly correlate in terms of the revenue because that is like, just to give an example, I mean, if you do insurance, the earning is fairly different from what you get if you do fixed income versus MLD.

So I think that composition creates a bit of a quarterly variance.

But as long as your net new money is on the upward trend.

And if you look at the trend of the numbers in MPIS, I don't think there is any structural concern.

There is 11 quarters of growth.

And if you look at year-on-year growth, it's about 48% on a nine month basis and 22% on a Q- on-Q basis.

It's just INR3 crores down from previous quarter, which I don't think merits any concern from a trend perspective.

Prayesh Jain

Right?

Generally, we've been used to seeing consistent growth, and that is a reason to just pointing that out.

The other question was on your asset management piece, where you mentioned that there have been challenges to flows given the volatility in market on the listed equity side.

Nuvama Wealth Management Limited January 27, 2026 But is there also a point where because the number of accredited investors are increasing and they are looking to get the smaller ticket size and be more varied products.

Is that any cause of concern with respect to incremental flows from an industry perspective?

Ashish Kehair

From the numbers, at least what we are seeing, that is not something which we have witnessed as of now, not really.

No. Theoretically, what you're saying can have a bearing.

But I think it is not visible.

In fact, not at all.

None of our discussions internally has brought this topic up.

In fact, in Nuvama Wealth, we are trying to position this to the clients that if they take accredited status, they can actually go ahead and do a large number of credit funds at a lower ticket, which will give them a much higher diversification.

But then what we faced practically on the ground is that the fund managers have a number of investors cap of 1,000, I think, so they don't really want to encourage this significantly unless they have the ability of launching multiple schemes.

So we'll have to see how that evolves, this whole accredited investor thing.

Prayesh Jain

Got it.

And last question on the asset services front, where in terms of revenues, we still are from the peak of what we had in the, say, 1Q FY '26 or even for that matter, 4Q FY '25 when we had about INR198 crores of revenues, we still had about INR172 crores.

You had kind of alluded to the fact that we will be back to a revenue potential by fourth quarter.

Are we on course to do that or probably we're still running behind on that?

And just an extension to that, you mentioned about adding more services here from an RTA perspective, do you think that, that will kind of add to cost in the initial period and then probably help you get better revenue and profitability over the medium term?

Yes, those would be my questions.

Ashish Kehair

So when you look at the revenue in asset services, one component you earn from float, right?

Now float-related earning has 2 components: the float balance itself and the yield.

So from a float balance perspective, we will be back to full potential by end of Q1. But yields have compressed from Q4 and Q1 this year because of the rates going down.

So whatever residual impact and the difference in revenue, which you will see, will be because of the fall in yield and I think in Q1, maybe once the float goes even further up, we will be able to negate the impact of the falling yield.

On the services front, I think large part of the costs are already incurred.

And these are not very high opex, capex.

These are more licensed, like trustee services do not require a very high amount of expenditure and a marginal increase in market share we will be able to compensate.

So I don't think there will be any sort of impact, which you will see in the numbers, which are worth discussing that we need to highlight, at least as of now, we don't see that.

Moderator · Conference Operator

We take the next question from the line of Dipanjan Ghosh from Citigroup.

Nuvama Wealth Management Limited January 27, 2026

Dipanjan Ghosh

A few questions from my side.

First, on Nuvama Private and Nuvama Wealth, if you can give us some color on the growth, net new money in recurring assets versus the redemptions, so that across like third quarter or maybe nine months or that we can get some color on how the gross money into the ecosystem has been shaping up?

The second question is in terms of the cost -- variable cost reduction that we have seen, how comfortable are you on fourth quarter?

I mean, Bharat gave some color on the fourth quarter, but I mean, do you have any more headroom, in case, let's say, the revenues were to kind of dip a bit in 4Q also?

And third question is on the IB IE business.

If you can split up the margin profile of the business between DCM, ECM and your IE.

And just one clarification, I think at the start of the call, you gave some color on the flow expectations in AMC in FY '27.

Did I hear it correctly that you're expecting around INR7,000-9,000 crores of flows in that?

Ashish Kehair

So let me go one by one.

In your gross ARR assets for private, I think would be order of magnitude about INR4,000-INR4,500 crores for the quarter.

And net, we saw was about INR1,500-INR1,800 crores, so balance would be the adjustment in terms of redemption, or scheduled maturities and all that.

We don't track ARR, non-ARR in Wealth, so that maybe we will check and when we talk next, we can give that number.

On variable cost, essentially, in this quarter, the adjustment was largely around 2 businesses: one was in Nuvama Private because in Q2, we saw the revenues go up.

So therefore, in line with that, the incentive and the bonus provisions went up and second was in the capital markets business.

So in both, we have the flexibility to move up and down.

And broadly, we try to track the variable provisions in line with the revenue so that we don't have a shock in any quarter.

In fourth quarter, it's not that we will have something unreasonable or large coming, which is disproportionate to the revenue percentage.

So it should be in line with what we have been seeing till now.

And our overall cost income range also should be in line.

It will not be materially different.

In terms of the margin profile, for ECM, DCM, we've not gone to that level because there are a lot of resources, which are also common.

But broadly, if one were to guess.

I don't have actual numbers.

DCM would be maybe slightly better margin because people cost could be slightly lower than ECM side, maybe one is at 40%, one is at 60% and blended we operate at 50% and institutional equity will range from 50% to 60-65% range, depending on the performance of revenues.

When the revenues go significantly up, the cost income comes down and vice versa.

On AMC, yes, you heard right.

I can tell you broadly how we are looking at the breakup.

Essentially, if you are able to launch our new commercial real estate fund and do maybe INR2,500-INR3,000 crores there.

And if credit is also launched, which we are planning maybe by Q1, latest by Q2 and one could do another INR2,000-INR3,000 crores there.

Nuvama Wealth Management Limited January 27, 2026 Once we migrate our flagship strategies of current AIF absolute return and long short into SIF, we expect flows to improve because SIF gives us significantly improved tax profile for the customers.

And our absolute return and long short still are in the top quartile in terms of performance.

So I think that will start attracting flows.

And it also opens up a large set of distributors.

Maybe we will take time to onboard them because we are not a retail brand, but it opens up the INR10 lakh distribution IFA community as and when they qualify to distribute the same.

So, I think combination of these three could essentially give us another INR2,000-INR2,500 crores.

So if we add all this up, order of magnitude anywhere between INR6,500 crores, INR7,000 crores to INR8,000 crores, INR9,000 crores without taking into private equity, I think that will be an added upside element.

That's how the numbers add up.

Dipanjan Ghosh

Sir, just one small follow-up on the gross profile, if you can give the full number for nine months?

Thanks, and all the best.

Ashish Kehair

About INR13,000 crores.

Moderator · Conference Operator

We take the next question from the line of Mohit Mangal from Centrum Broking Limited.

Mohit Mangal

My first question is towards the net flows.

So, I think if you look at this quarter, so Nuvama Private has seen a considerable uptake led by the transactional segment, while Wealth has seen a kind of a decline from around INR3,800 crores-INR3,250-odd crores.

Now going to financial year '27, how do you see net flows actually spanning out?

That would be my first question.

Ashish Kehair

So net flows become important in two things.

One for Private, we should look at the ARR net flows.

ARR net flows this year for Private right now is about -- nine months basis about INR6,500 crores.

And order of magnitude, it should end up at around anywhere between 23% to 25% of the opening.

And let's say, we are right now sitting at about INR52,000 crores of assets in ARR.

If we end the year at, say, INR54,000-INR55,000 crores and you take a range of, say, 20%-25% of that.

We are looking at INR10,000-INR11,000 crores or maybe INR12,000 crores next year in Nuvama Private.

And if you come to sort of Nuvama Wealth, I think similar about 25% to 30% of the opening book, which we will have in the MPIS segment.

So that's how essentially one should track the net flow numbers.

Mohit Mangal

Understood, that is helpful.

My second question is on the cost to income.

So I think you've guided for 10% to 12% increase in opex.

So does that also cover the RM addition that we are doing.

Ashish Kehair

No, no. So, when we speak our lingo, opex means everything else other than people cost.

People cost is different.

So people cost I think if I look at a nine month consol, we would have grown Nuvama Wealth Management Limited January 27, 2026 by about 7% year-on-year.

And by the end of the year, maybe it can be slightly higher, but order of magnitude is this only.

Opex is everything else other than people costs.

So there, last year, we were about INR410 crores.

I think this year, we should end up anywhere between INR440 crores to INR445 crores.

So that's the 10% increase is what we talked about.

Mohit Mangal

Okay.

Understood.

This is very clear.

And lastly, basically the RM addition, I think we are adding about 10% to our RM strength.

So, I think this strategy will continue, right, over the next 2 to 3 years?

Ashish Kehair

Absolutely.

Yes, yes.

Moderator · Conference Operator

We take the next question from the line of Nidhesh from Investec.

Nidhesh

First question is on Private Wealth.

So, there is an increase in yield in this quarter.

What has led to that increase?

And secondly, what is the run rate of transition revenue that we should build in this business?

Ashish Kehair

So, yield increase typically happens because of the composition of the products in the ARR basket, sometimes in the salience of Category II will increase slightly because there, you earn about 30-odd percent in year 1.

So that gives a bump up.

But on a BAU basis, I think any range between 80 to 85-90 bps is what we will continue to see there.

In transactional income, broadly, this year, we should see about 20% growth.

So like last quarter, we saw about INR100-INR110 crores of revenue this quarter, we saw INR64- INR65 crores.

I think anywhere between INR70-INR80 crores is a decent run rate till -- I mean, going forward is what we are meant to.

Nidhesh

Second question is on wealth management.

Ashish Kehair

Yes.

Yes, go ahead.

Nidhesh

So on wealth management, can you give some color on MPIS income, how much of the revenue is upfronted, how much is, let's say, trail based, etcetera?

Ashish Kehair

The overall wealth management, around 60% comes from MPIS and about, say, 20% comes from NII and balances your broking and other.

And if I look at full wealth management as a bucket, around 55% comes from ARR.

So if I subtract 20% of NII from there, around 30-35% will come from our recurring revenues within the MPIS bucket.

So, 60% divided by 2, that's about 30% to 35% of that 60% breakup.

So 20-25% would be upfront and 30-35% would be recurring.

Nidhesh

Understood.

And last question is on Asset Management.

In that segment, the yields are quite volatile among segments with private markets, public markets and real estate.

So what is leading to this volatility in yields?

And how should we model that?

Nuvama Wealth Management Limited January 27, 2026

Ashish Kehair

Actually, it's a temporary thing.

In real estate, right now, we have reached about INR3,000 crores.

As I said, another INR1,000 crores, we will hit the end of the fund.

And after that, the yield will stabilize because every time till the closure when a new investor comes, at that point in time in that quarter, you charge fees from the beginning.

So, in any quarter, if, let's say, we moved from INR3,000-INR4,000 crores in 1 quarter, on that INR1,000 crores in that quarter from the beginning till the end of quarter 4, the full fees will be charged.

So, once we hit INR4,000 crores on commercial real estate, the fees will stabilize, which will be order of magnitude, 50-55 basis points.

On private equity, you can assume it to be around 50-55 basis points.

And on public markets, the fees have been fairly steady at around 60-62 basis points.

Nidhesh

Sure.

So, there will be an element of carry also, right, in these businesses…

Ashish Kehair

This is right now zero carry.

As of now, we don't take carry into consideration.

We take carry as and when it comes.

If we change that policy in the future, we will tell you.

Moderator · Conference Operator

We take the next question from the line of Shrenik Mehta from IndoApls Wealth.

Shrenik Mehta

I just wanted to ask you a question about this institutional equity segment.

We have been seeing significant declines over the last few quarters.

What parameter would you use to say that there is potentially a bounce back, whether this is the number of active institutional clients?

Or is it the overall cash volumes that will help us say that we will start getting back to year-on-year growth?

Ashish Kehair

I think two things.

One is the cash volume and second is the derivative volume.

These are the two components that essentially once they start moving up and if the market share remains intact, which typically, for us, remains intact, then you start seeing growth coming back.

Shrenik Mehta

Okay.

And are you seeing any early signs of it?

Ashish Kehair

Yes.

At least in this quarter, we have seen quarter-on-quarter, there is an improvement in the average daily turnover because on a year-on-year basis, Q4 will become full, I think, clean quarter where the F&O rules, if you remember, came middle of Q3 last year.

So half of Q3 had higher numbers in F&O volumes, and then it sort of subdued.

And Q4 onwards, you will get a base which is with the new F&O rule.

So, this Q4 will be the first quarter with -- so I think you should see a year-on-year uptick start happening because the base effect will come into action.

Moderator · Conference Operator

We take the next question from the line of Lalit Mohan Deo from Equirus Securities.

Lalit Mohan Deo

Just two questions.

Firstly, on the lending book, we are writing that we are seeing some strong growth in the wealth business where we have scaled up to INR4,300 crores.

So now how should we see this for the next year?

And similarly, in the private also where we are at close to around INR2,400-INR2,500 crores.

So how should we see the overall loan book?

Nuvama Wealth Management Limited January 27, 2026

Ashish Kehair

Ideally, see, we'll have to grow it in line with the business.

So anywhere between 20% to 30% is what we will target for next year.

Lalit Mohan Deo

Sure, sir.

And sir, just like we also touched upon this advisory piece in the Nuvama Private, which is Infinity.

So currently what is like the overall current AUM over there?

And like how should we see this in respect to the distribution business in the ultra HNI segment?

Ashish Kehair

I think right now, we are not separately disclosing.

It's a part of the ARR AUM.

We are also discussing internally on whether to call it out separately.

So give us a couple of quarters, and maybe we can give you the numbers.

But it's growing significantly within the ARR AUM.

Moderator · Conference Operator

We take the next question from the line of Sanketh Godha from Avendus Spark.

Sanketh Godha

Ashish, probably the question on asset services still remains to me because if I look at 1Q FY '25, your yield or retention was 1.4%.

Now it is more than double of that, 2.88%.

So just to understand, this model really works on retention or is it you calculate the growth number, how much you want to achieve from the clients?

And then accordingly, you rebalance the cash and G-Sec component so that incrementally revenue doesn't fall, whether building a model around the yield is actually, right?

Or how do we understand this way to look at this business?

Ashish Kehair

So I think what you're saying is quite pertinent.

Actually, last year, in Q1, we had the large client, right?

Now the large client was disproportionately large as compared to others.

So therefore, there was an adjustment.

And actually, the answer to both your approaches is that yes, that is the challenge that if somebody becomes very large, then the correlation with yield will fall off because then you will target a growth and adjust the cash and noncash securities.

But if they are all within a particular range, then I think the yield works, which is the case right now.

So I don't see this breaking suddenly in the near future and should be in the range of 2.6% to 2.9% in terms of the yield on the clearing balance.

Now why it was 1.4% and becomes 2.9% is how that clearing balance is split between cash and G-Sec, which what you said was absolutely right that if somebody becomes very big and they want to reduce the cash, then we will have to target a growth and therefore, adjust accordingly.

But I don't think for the next 12 to 24 months, we have to model for that.

We don't see any client going to that size.

Sanketh Godha

So incrementally 2.6% to 2.8% kind of a number is a realistic number to build in?

Ashish Kehair

Yes, yes, yes.

That's right.

Sanketh Godha

Understood.

And maybe for the first time, asset clearing AUM grew, so which means whatever migration need to happen from institutional to wealth or even the fall which happened from the large client.

Now we assume this growth to come back kind of a thing in the assets under clearing?

Ashish Kehair

Correct.

That's right.

Nuvama Wealth Management Limited January 27, 2026

Sanketh Godha

Okay.

And lastly, I just want to check on SEBI came out with the paper that on FIIs, netting is allowed.

Ashish Kehair

That's only for cash, not for derivatives.

Anyway, there is a margin-based business, so it doesn't matter.

Sanketh Godha

But in this revenue, we don't make any significant from the cash…

Ashish Kehair

No, no, no. cash-related float is insignificant.

Sanketh Godha

Okay.

Understood.

And lastly, Ashish, on the flow number.

I know I ask this question typically that you gave a guidance of around INR20,000 crores for the year, closer to INR20,000 crores.

And now we are at INR14,000 odd crores.

So we need to get closer to INR5,800 crores to INR6,000 crores for the fourth quarter to achieve that number, and you are seeing a growth of 20% to 30% on that number for the next year.

So just wanted to understand, given the 2 core pieces that are Private and Wealth saw a sequential decline Q-o-Q, you are confident on delivering INR20,000 crores kind of a number.

Is there any macro factor because market sentiments have weakened meaningfully in last maybe 2 weeks, maybe 3, 4 weeks or 1, 1.5 months.

Then your RM is interacting with the clients, how do you see whether the money will come, or they are waiting and watching something -- any color on those will be very useful to understand.

Ashish Kehair

So largely around the product calendar or the products which you have, which are non-correlated to equity markets is what gives us the confidence to be in line with that number because equity flows are equity flows.

They will always keep moving at least in the higher net worth segment and ultrahigh net worth segment, they are not, as I would say, consistent as the SIP retail flows.

But the nonequity component, which is your alternates, fixed income, MLDs and within alternates, different categories, there you see a reasonable degree of certainty.

And there, if you have a product calendar, which is decent, then you have a reasonable amount of control.

I will never say 100% predictability on where the flows will be, but reasonable amount of control on the flows.

Sanketh Godha

So, Ashish, then in the current year around INR19,000 crores, INR20,000 crores and next year around INR26,000 crores net flow number is achievable...

Ashish Kehair

Yes.

So, about INR19,000 crores, INR20,000 crores and next year between INR25,000 crores to INR26,000 crores is what we target, yes.

Moderator · Conference Operator

Ladies and gentlemen, we take the last question from the line of Amar from Raedan Capital.

Amar

Yes.

Can you just give me a summary for the FY '27 guidance overall and the new launches and products that we'll be introducing to FY '27?

Ashish Kehair

So, we don't normally give guidance on revenue and PAT numbers.

But what we say is that we aspire to have a 20% plus growth.

And this year, because of the adjustment of asset services, we Nuvama Wealth Management Limited January 27, 2026 will not end up at that.

But I think once the base is formed, we should come back to that same level of growth, anywhere between 20% to 25% of the overall business.

That's what we target.

I don't think we give any guidance.

In terms of new products, at least on the asset management side, there's a Dynamic asset fund.

There's a REIT InvIT fund.

There will be a Credit fund.

There will be a new Commercial real estate fund.

These four, we have visibility currently.

Amar

Okay.

And what will be the percentage of revenues if you could help them with that for the new launches?

Ashish Kehair

So, these are all asset management products.

So, they will run at a management fee structure of anywhere between 1.5% to 1.75%, which gets split between the asset management and the wealth management businesses in terms of distribution and management fee and then there will be some carry.

But each product will have a different structure.

Moderator · Conference Operator

Ladies and gentlemen, with that, we conclude the question-and-answer session.

I now hand the conference over to the management for their closing comments.

Ashish Kehair

Thank you.

Thank you all for coming back again.

Hope to see you again in the next quarter.

Thank you.

Bharat Kalsi

Thank you.

Moderator · Conference Operator

Thank you.

On behalf of Nuvama Wealth Management Limited, that concludes this conference call.

Thank you for joining us, and you may now disconnect your lines.