Nuvama Wealth Management makes NSE debut; stock settles at Rs 2,612

Nuvama Wealth Management makes NSE debut; stock settles at Rs 2,612

Nuvama Wealth Management made its trading debut on Tuesday, joining industry peers such as 360 One WAM and Anand Rathi Wealth as pure-play listed wealth management firms.

Shares of Nuvama—hived off from Edelweiss Financial Services—finished at Rs 2,612.5 on the NSE, valuing the firm at Rs 9,163 crore. However, its fair value discovery could get a few more sessions as its shares hit 5 per cent down limit after only a handful of trades.

Private equity major PAG-promoted Nuvama verticals include main-stay wealth management, asset management and capital markets. It manages assets worth Rs 2.5 trillion. In FY23, the company had clocked revenue of Rs 1,575 crore and net profit of Rs 368 crore (excluding certain non-recurring expenses).

The company is aiming to double its bottomline in three years underpinned by the growing number of wealthy Indians and their demand for investment solutions.

India’s high networth individual, or HNI (those with assets of over $1 million) population is expected to grow at an annualised rate of 12 per cent to 1.41 million by 2026. On the back of this the wealth management business in India is pegged to grow at an annualised rate of between 12-15 per cent over the next five years. Also, a lot of HNIs who currently get advised from informal channels are likely to pivot to large organised players.

As a result, the wealth management space has seen a lot of interest from private equity investors.

For instance, the Blackstone group last year picked up a 71 per cent stake in ASK Investment, while Bain Capital owns a fourth of 360 One.

Currently, PAG, an Asian investment firm, holds about 57.2 per cent stake in the company, Edelweiss about 13.7 per cent and the remaining 29 per cent is with the public.

“The financial savings are going to quadruple in the next 10-12 years. Next 10 years both inflation and interest rates will be high, so compounding will be faster. Even at similar compounding like the past decade, the Rs 300 trillion financial savings will become Rs 1,200 trillion. This will help wealth management firms gain scale and size,” said Ashish Kehair, MD & CEO, Nuvama Group.