Nuvama Wealth Management marked its trading debut, becoming one of the pure-play listed wealth management firms alongside industry peers such as 360 One WAM and Anand Rathi Wealth.
The shares of Nuvama, demerged from Edelweiss Financial Services, finished at Rs 2,612.5 on the NSE, giving the firm a valuation of Rs 9,163 crore. However, the true fair value discovery might take a few more sessions as the shares hit the 5% lower circuit limit after only a few trades.
Nuvama, promoted by private equity major PAG, encompasses wealth management, asset management, and capital markets. It manages assets worth Rs 2.5 trillion. In FY23, the company reported a net profit of Rs 1,575 crore and net profit of Rs 368 crore (excluding certain non-recurring expenses).
The company aims to double its bottom line in three years, driven by the increasing number of wealthy Indians seeking investment solutions. India’s high net worth individual (HNI) population, those with assets exceeding $1 million, is expected to grow at an annualized rate of 12% to 1.41 million by 2026. This growth is projected to drive the wealth management business in India, with an annualized growth rate of 12-15% over the next five years. Many HNIs who currently receive advice from informal channels are likely to shift to large organized players.
The wealth management sector has attracted significant interest from private equity investors. For example, the Blackstone group acquired a 71% stake in ASK Investment last year, while Bain Capital owns a quarter of 360 One.
Currently, PAG holds approximately 57.2% stake in Nuvama, Edelweiss owns about 13.7%, and the remaining 29% is held by the public.
Ashish Kehair, MD & CEO of Nuvama Group, commented, “The financial savings are going to quadruple in the next 10-12 years. In the next 10 years, both inflation and interest rates will be high, so compounding will be faster. Even at similar compounding rates as 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.”
