The shares of the wealth management company jumped up to 2 percent after Morgan Stanley Asia Singapore Pte, Goldman Sachs Funds & Smallcap World Fund Inc bought 18.42 lakh equity shares worth Rs 1,234.8 crore.
With a market capitalization of Rs 24,265.69 crore, the shares of Nuvama Wealth Management Ltd were trading at Rs 6,793.95 per share, decreasing around 0.63 percent as compared to the previous closing price of Rs 6,837.15 apiece.
Reason for rise:-
According to the BSE bulk deal, Asia Singapore Pte, Goldman Sachs Funds & Smallcap World Fund Inc, FIIs bought 18.42 lakh equity shares which is equivalent to 5.2 percent in the company at an average price of Rs 6,702.60 apiece. This transaction was valued at Rs 1,234.8 crore.
Moreover, Edel Finance Co & Ecap Equities, an FII likely to offload 22.10 lakh equity shares which is equivalent to 6.4 percent in the company in a block deal. The transaction value of this deal is 1,464.8 crore.
Additionally, as of June 2024, Edel Finance Co & Ecap Equities, a foreign investor holds 48.22 lakh equity shares together which represent 13.62 percent of the company.
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Financial Condition & prominent investor:-
Looking forward to the company’s financial performance, revenue zoomed by 47 percent from Rs 648 crore in Q1FY24 to Rs 949 crore in Q1FY25, but during the same period, net profit magnified significantly by 80 percent from Rs 123 crore to Rs 221 crore.
Ace investor Mukul Agrawal holds 5,00,000 equity shares which represent 1.41 percent in the company as of June 2024.
Wealth Management:-
The company has strong flows observed in focus areas, with a net new money (NNM) of ₹1,400 crores in managed products and investment solutions (MPIS) for Q1. NNM for managed products grew 40% YoY, contributing over 70% of total NNM. Revenue growth normalized to 20%, and the cost-to-income ratio improved to 66%.
Robust demand & AUMs:-
Nuvama Private has seen robust demand across all city tiers, adding 200 families to reach a total of 3,900. Their annual recurring revenue (ARR) hit a record ₹4,700 crores, with over 93% in managed products. Asset management grew to ₹7,700 crores, targeting an increase of ₹3,500 to ₹4,000 crores this year, bolstered by new product launches and strong investment banking synergies.
Management comments:-
Management is transitioning from unorganized to organized wealth management, spurred by technological disruptions and regulatory changes. Emphasizing a multi-product, multi-channel, and multi-customer segment model, they are investing heavily in technology, including MARS (Multi-Asset Advisory Tool) and One Platform for improved client engagement and sales Management.
Future outlook:-
The future outlook anticipates continued growth in managed products and asset management segments, with an expected improvement in transactional income in Q2 FY25 due to market opportunities. Management aims to sustain a cost-to-income ratio below 65% as the business scales and matures.
Company snapshot:-
Nuvama Wealth Management Ltd is a financial services firm that offers a wide range of investment solutions, including wealth management, asset management, and financial advisory services. The company caters to individual and institutional clients, providing tailored strategies to help them achieve their financial goals and optimize their investment portfolios.
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Written by:- Abhishek Singh
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