Nuvama Wealth Management: Forget glowing wealth advisors and generic investment plans. In the hushed chambers of Nuvama Wealth Management Ltd, a different kind of wealth management unfolds. Here the ultra, high net worth and esteemed institutions entrust their fortunes to select a few. Nuvama acts as the confines of the elite and navigates complex financial labyrinths.

Nuvama are more than just asset managers. They’re the alchemists who transform vast wealth into strategic investments. From navigating global markets to crafting wealth preservation strategies Nuvama ensures their client’s fortunes not only endure but also flourish. 

By guiding the investments of the elite, the company shapes India’s financial future. Their expertise fuels innovation, injects stability and fosters social causes into the nation’s economic landscape. They act as guardians and silent partners in India’s journey towards financial strength. Come let’s try to understand what Nuvama wants to achieve in the future with its business model. 

Nuvama Wealth Management – Company Overview

Nuvama Wealth Management headquartered in Mumbai, acts as a key player in the Indian financial services industry. Established in 1993, the company boasts over 25 years of experience in the market. Nuvama has evolved from its roots as Edelweiss Securities Limited to become a diversified financial service provider, catering to a wide range of clients across the country. 

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Nuvama’s client-centric approach offers a comprehensive suite of wealth management solutions. With a presence of over 450 locations in India, including around 70 Branches, the company serves a diverse clientele, from mass affluent individuals to ultra-high-net-worth institutions and families. 

Backed by the institutional ownership of leading investment firm PAG, Nuvama has navigated multiple business cycles and maintained its position as a trusted partner in Indian financial services. The company’s growth and diversification over the years come from the company’s experienced management team, composed of industry stalwarts.

With a strong focus on technology and innovation, Nuvama continues to evolve and adapt to the changing needs of its clients and solidifies its reputation as a leading player in the financial service industry.  

ParticularsAmtParticularsAmt
CMP4,943.10Market Cap (Cr)18,048
Stock P.E (TTM)28.86Industry P.E (TTM)30.78
ROE (TTM)21.60%ROCE (TTM)14.62%
Debt-to-Equity2.33EPS (TTM)176.67

Nuvama Wealth Management – Business segments

Wealth Management Business

In this segment, the company provides services like retail securities broking business, investment advisory, distribution of financial products and lending against securities. With this segment, the company caters to ultra-high-net-worth clients through its Nuvama Private division, as well as affluent high-net-worth individuals through its Nuvama Wealth Division. 

Asset Management segment

Nuvama with this segment is focused on providing portfolio management services (PMS) and investment management services for alternative investment funds. They do these services to a specialized client base, to have long-term value creation and risk management.  

Capital Market Business segment 

The company encompasses institutional broking, debt advisory, merchant banking and clearing services within this segment. By doing this they leverage its strong research capabilities, experienced sales team and technology-driven execution to serve a wide range of institutional clients.

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Nuvama Wealth Management – Financial performance

ParticularsFY 2024FY 2023FY 2022FY 2021FY 2020
Revenue (in crores)31512,214.721,773.481,282.09759.77
Net profit (in crores)625305.07857.13-551.4282.76
ROE24.30%10.45%12.36%0%27.21%
ROCE16.50%10.86%12.31%0%23.96%

Nuvama’s aggregate revenue for FY24 grew by 42.27% year-on-year to Rs 3,151 crores. Its total revenues from wealth management grew by 17% year-on-year to Rs 1,188 crores in FY24. The company’s overall cost-to-income ratio improved to 62% for FY24, down by approximately 700 basis points year-on-year.

Operating expenses of the company stood at 373 crores, growing by 14% year-on-year. Nuvama’s Asset services client under custody grew by 109% year-on-year to Rs 91,156 crores. The company has demonstrated strong growth across all its business segments, with significant improvement in revenue, profitability and AUM in FY 24. 

Nuvama Wealth Management – Future Plans 

Nuvama wants to continue its aggressive expansion in the mid-market segment and they plan to add about 800 relationship managers (RM) for the next 3 years. Nuvama focuses on hiring RMs from banking backgrounds to leverage their product knowledge. So they invest heavily in learning and development programs to train RMs on a wider product basket.

Nuvama wants to launch an AI-powered portfolio analyzer and recommendation tool for RMs. With the help of this tool, the company aims to improve holistic client engagement, increase RM productivity and ensure uniformity of advice. 

Nuvama wants to maintain a focus on Managed Products and Investment Solutions (MPIS). They wanted to achieve a target of 25-30% annual growth in MPIS assets and also wanted to increase the proportion of mutual funds and PMSs in their product mix. The company expects yields in Nuvama Private (UHNI segment) to stay in the 85-100  bps range.

Nuvama is going to start its operations in Dubai (DIFC) where it recently received license approval. The company plans to use Dubai as their first go-to-market for offshore operations, rather than in Singapore. They view offshore capabilities as essential for serving domestic ultra-high net-worth clients. 

Nuvama plans to scale up private market funds, specifically the crossover strategy and wants to launch new funds in public markets, including a flexi cap fund. The company expands distribution channels for asset management products, both internally and externally. Nuvama targets growing asset management AUM to Rs 10,000 crores by next year and Rs 20,000 crores in the medium term.

Nuvama continues to focus on systematic quant funds and hedge funds in the FPI segment. They also wanted to grow a domestic custody business serving PMSs and AIFs. Nuvama plans to expand ultra-high net worth services beyond tier-1 cities in India. 

Conclusion

India’s growing wealth management sector offers fertile ground for Nuvama with having the right mix of experience and innovation. With a well-established track record, the company is positioned to capitalize on the growing pool of affluent clients. By providing access to financial inclusion and advanced wealth management solutions, Nuvama empowers families and individuals to meet their financial goals and secure their futures.

With a focus on a clear path to financial health and finding ways to stand out in the competitive sector, Nuvama has the potential to be a significant player in India’s wealth management future. What would you say about Nuvama’s growth? Can it become a giant in the Wealth management sector? Do share your thoughts in the comments below 

Written by Pavunkumar V M

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