JM Financial Limited (NSE: JMFINANCIL) Q1 2026 Earnings Call dated Aug. 12, 2025
Corporate Participants:
Unidentified Speaker
Vishal Kampani — Vice Chairman & Managing Director
Nishit Shah — Managing Director & Group CFO
Chirag Negandhi — Managing Director
Sonia Dasgupta — Managing Director & CEO – Investment Banking
Manish Sheth — Managing Director & CEO – Home Loans
Analysts:
Unidentified Participant
Digant Haria — Analyst
Anubhav Goel — Analyst
Dhruvesh Sanghvi — Analyst
Ketan Pitrubhakta — Analyst
Prolin Nandu — Analyst
Yogesh Bhatia — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the earnings conference call for JM Financial Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Stars and zero on your touchstone phone. Kindly note that any forward looking statements made on this call are based on the management’s current expectations. However, the actual results may vary significantly and therefore the accuracy and completeness of this expectation cannot be guaranteed.
Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Khampani. Thank you. And over to you sir.
Vishal Kampani — Vice Chairman & Managing Director
Thank you. On behalf of JM Financial, we extend a very warm welcome to all of you to our earnings conference call to discuss our financial results for the quarter ended June 2025. Our results have been uploaded as well as our presentation and press release on the stock exchange and websites. And I hope you’ve had a chance to go through the same on the call. We also have a management team. We have Sonia Dasgupta MD and CEO of Investment Banking. We have Chiragne Gandhi md JM Financial Limited Manish who runs our home loans business. Amitabh Mohanti who runs our asset management business.
And of course Nishit Shah who is our group cfo. I will give a few updates and highlights and then we’ll hand over the call to Nishit who will take you through the numbers and then we can open up for Q and A. So as most of you would have seen, it’s been a very exciting quarter for us at JM Financial. I think all of our business units have done extremely well and have posted stellar results and growth. And this is all due to the hard work of the last couple of quarters in terms of having strategic alignment and focusing on the business build.
We are pleased to report our highest ever operating PAT at almost 454 crores. Our net worth has crossed 10,000 crores for the first time and our book value is at now 106.4 per share. And more interesting to note is that we’ve had a net revenue growth year on year of 22%. And even our pre provisioning operating profit has increased by 22% which is an extremely healthy number and the reason we want to highlight this number is because even after you take out the impact of the positive recoveries that we have seen in our business units, both the real estate lending unit as well as the arc, despite that, I mean in terms of positive news, in terms of being able to recover a significant flow of bad assets which we had planned for the year, in the first quarter itself, even the operating profit has seen a solid growth of 22%.
Our real estate loan book, which I define as the non core real estate notebook, has declined by almost 56%. And in our ARC business in the last 12 months we’ve had cash recoveries of almost 1368 crores. And so both the real estate recovery and the ARC recoveries all put together have resulted in a net reversal of impairment of almost 204 crores, which is extremely healthy. So in terms of the guidance that we had given earlier that we’ll have almost 250 to 300 crores of recovery every year for the next three years. And our target is that we want to recover the provision, the entire provision that we have made and our current NPA stands at close to 780 odd crores.
Excluding the home loan of 37, it’s around 740750 crores. And we are hopeful that we should be able to meet our guidance that we have given over the next three years. And moving on to the borrowing side, we have reduced our borrowing by 4300 crores in the last one year and still had excellent growth in our P pop by almost 22%. And the result of this is because of the strong increase in fees and commission income as well as the brokerage income. The brokerage income Q1Q is up 29% and despite the fall in volumes is almost flat YoY and the fee and commission income is up almost 13%.
And we see even July and August being extremely strong months in terms of the business that has been completed on the fees and income side. So hoping for the momentum to continue. As I was mentioning to someone earlier that the best performing sector in India right now is the capital market sector. We are hoping that the economy catches up. And in terms of strategic initiatives, we’ve increased our shareholding in JM Financial Credit Solutions to 100%. On the home loan business, we divested a small stake of 2.1% to Bajaj Aliha’s life insurance. This helps us value the business and also brings in a good strategic investor, very long term, high quality investor in our business.
Our plan here Remains the same. We plan to grow the loan book to 5,000 crores in two years and to around 10,000 crores by f530. And we will plan an IPO and listing of this business so sometime in 2028, 29. And to add to that, you know we are, as I said, very pleased with the execution. We’ve also had a 1 lakh crore sort of filing. We filed 45 IPO transactions which aggregate to 1 lakh crore. So that gives all of you the sense of our pipeline. And if markets continue and the domestic fund flow continues at the rate which we’ve been seeing, I think there is a good chance that we should be able to execute this pipeline in the next 12 months or so.
There’s been a lot of headcount addition and our business management teams will talk about that in more detail. And so with that I’ll hand over the call to Nishit to take you through the numbers and then we can open it up for Q and A. Thank you.
Nishit Shah — Managing Director & Group CFO
Thank you, Vishal. I’ll just take you all through the segment numbers. On corporate, advisory and capital markets, the net revenue stood at 182 crores which is a 53% increase year on year basis. Profit before tax stood at 96 crore which is a year on year increase of 77%. Profit after tax stood at 77 crores which is an increase of 88% on a year on year basis. The capital employed in this segment is around 714 crores. On the wealth and asset management side, the net revenue increased to 225crores an increase of 29% on a year on year basis.
Profit before tax stood at roughly around 44 crores which is a 54% increase year on year basis. Profit after tax and minority interest stood at 38 crores which is a 69% increase on a year on year basis. The capital employed in this segment is 1222 crore. Moving on to private markets, the net revenue has increased by approximately 62% on a quarter on quarter basis. On the private markets, I would like to give numbers on a quarter on quarter basis because of the sharp decline in the loan book and make it more comparable. There is a reversal of impairment on financial instruments to the extent of 212 crores.
Profit before tax including the reversal stood at 377 crores which is a three times increase as compared to the earlier quarter. Profit after tax and minority interest stood at 278 crores which is a 12 time increase as compared to the earlier quarter. The capital employed in this segment is 6457 crores. Moving on to affordable home loans. The total income increased by 8% to Around 100 crores on a year on year basis. Profit after tax was more or less flattish at roughly around 14 crores. The capital employed in this segment is 765 crores. Over and above this we have treasury and other assets. The capital employed is roughly around 1303 crores. We made a profit after tax of 47 crores which is an increase of 35% on a year on year basis. With this I would like to hand over to the moderator for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. If you wish to remorsel from the question queue you may Press Star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Tikant Haria from Green Edge Wealth. Please go ahead.
Digant Haria
Hi, thanks for the opportunity. Firstly, congratulations to the team. I think this quarter a lot of things have started moving in the right direction together so I’ll try to just ask one by one because there’s too much to ask. So the first question is especially on this wealth management team that despite such strong addition in the sales and the relationship manager teams I’m sure the opex would have gone up a lot but even then you know our profits have shown significant jump so just wanted you know, some color on, you know, you know, what have we planned for these new hirings that we have done and you know, as investors do we start saying that okay, this quarter was a base and you know we will see continuous improvements from your in terms of the recurring AUM and the profits both.
Vishal Kampani
Yeah, because I’ll have Chirag answered a question on wealth management.
Chirag Negandhi
Well, we’re at an investing phase in the wealth management business. We obviously have made some key additions in the people that we brought across the spectrum of the wealth management space. I would definitely like to believe that we have now set the base from which you should expect that we continue to grow definitely on a year on year basis and it might be slightly up and down on a quarter on quarter basis but on a year on year basis you have to expect that we will continue to grow at a rapid pace from here. And this is when the addition of people have not even yet started to operate at A full level right now because most of them are joining during the quarter.
So you’ll see that the improvement from there coming through on coming quarters.
Digant Haria
Okay, okay, thanks. There’s just a follow up on this. So. So you know. So you mean the, the costs, you know, still will get loaded up over the next two or three quarters, you know, and then maybe that productivity comes a little later, Is that correct?
Chirag Negandhi
That’s right, yes. Because we are still adding people.
Digant Haria
Okay, okay, okay. And then if you can just talk in terms of, you know, the number of products or you know, anything innovative that we did because you know, our recurring AUM has increased quite a bit versus transactional. So you know what’s happened there.
Chirag Negandhi
So the recurring big chunk of the recurring is the mutual fund business. But in addition to that, there are several products that we do from time to time that are innovative and we were the only ones, for example. And you can see the whole flywheel in operation over there because you would have seen the Blackstone Sattva deal. We were the only banker across the whole value chain from the wealth side in terms of H and I distribution to ultimately the bankers on the deal as well. And the only common banker across both the wealth and the IPO was JM Financial.
And that’s really the fly and feel in play. We hope and intend to do a lot more of these because you actually maximize the entire volume share there.
Digant Haria
Okay, okay, thanks. Thanks Chirag. Second question is on this corporate advisory in capital markets we have seen pretty strong growth despite like, you know, the markets maybe last year were more buoyant and you know, more euphoric. Then maybe this quarter was a little subdued. So is there any one off or. This is just, you know, like we have done really well overall. Any comments?
Vishal Kampani
I’ll have Sonia answer that. Digant.
Sonia Dasgupta
Yeah. Hi Dgant, thanks for pointing that out because clearly JM has led the entire market by a long shot. We closed 10 capital market transactions in the first quarter. So it’s clearly an effort of JM to take disproportionate market share. Most of the peers may have closed not more than three or four. So this is clearly like to rightly put a lot of things coming together, a lot of origination effort and execution effort, getting, seeing the fruition and as you can see also from the league tables in equity capital markets, we remain number one in quarter one.
And in addition even our advisory pipeline looks very strong.
Digant Haria
Okay, okay, okay, okay. That’s great to know Sonia, thank you. My next question is to Vishal. You know this private markets division, the division which you’ve been spearheading. So Vishal, this loan book, you know, for the first time, you know we are seeing that, you know, especially the, you know, maybe the real estate book has bottomed out at 2000 crores but the bespoke book has started increasing. So, so you know, is it fair to say that now, you know this number 5057 crores, the loan book itself will start growing?
Vishal Kampani
Yeah, as I mentioned on our last call also that this is kind of the bottom and you will not see any depletion in loan book going ahead. In fact you will see addition to loan book but it will be more granular, it will be a much higher quality of sort of counterparty that we will be dealing with and putting on our books. It will be more driven by bespoke and lats and also cash flow backed financing in real estate and not land or structured in real estate. All of that will be part of our aif.
And we are, I’m also very happy to note that we’re making very good progress on the syndication side in our private markets business. As you know, we kicked off that effort five quarters ago and you see a lot of that traction coming through in the next couple of quarters. Even the origination engine is working extremely well in partnership with our investment bank as well as directly what the private markets business will be able to source. Having said that there is a lot of liquidity and when there is a lot of liquidity there can be mispricing and learning from our experiences in the past, if there is a lot of mispricing then we will choose to stay away and that DNA will not change.
But having said that there is a lot of opportunity and we are very focused on executing and again just the way we’ve gained market share on the equity capital market side and we built a phenomenal pipeline on the equity capital market side as well as the distribution strength which is going up on the wealth management side. I think there will be a lot of credit syndication opportunities across corporate bespoke real estate as well as distress which I think we will need market share and hopefully.
Digant Haria
Perfect, perfect Vishal. So this from the journey from this 5050crores in this quarter to say, you know, effectively we wanted to reach 10,000 crores kind of a loan book and then we also wanted syndication income. So is that syndication income anything to talk about now or it’s just, you know, we’ve started and you know this income will start building up and how many years do you see to reach that 10,000 crores.
Vishal Kampani
What I would say Is efforts on the same started four or five quarters ago. And I think now we are seeing tangible assignments and mandates in hand which I think will convert into revenue in the next three quarters and then you will start seeing the revenue flow. And you know this is not pure syndication and a lot of it we will have some hold on balance sheet as well. So not only does it increase fee and commissions income but it also increases interest income. And this basically also helps in terms of protecting the cyclicality that you may occasionally face in the equity capital market business.
Because equity capital markets business I’ve always said is an 8 month business in 12 months you need 8 months to execute and your entire annual budget is met. While this will be a lot more stable and the credit as well as the interest income will be a lot more stable income.
Digant Haria
Okay. Okay, thank you. Thank you everyone. And you know like you know my last question is on this home loan piece like you know we have like you know we had a small transaction and you know I think the market acknowledges our home finance business as one of the finest with you know this three and a half times kind of a valuation. So just wanted to check like you know, what are the growth plans, you know, do we stick to what we had even in the last quarter or you know this deal, after this deal there is some revision.
Anything on that home finance company. If you can speak on.
Vishal Kampani
Yeah Manish, go ahead.
Manish Sheth
So basically we are sticking to whatever we have guided this percentage. You know, 2%, 2.1% w hat we have placed is to the one of the best investor Bajaj. But nothing changes on the ground. We are going to deliver w hat we said in the beginning of this quarter on this call is 5000 for next two years and by 2030, 10,000.
Digant Haria
Perfect. Manish Bhai, congratulations. And you know congratulations to the whole team. Thank you. I’ll come back in the queue if I have more questions. Thank you.
operator
Thank you. Participants who wish to ask questions May press chart and 1. Now the next question is from the line of Pawan from Edelweiss. Please go ahead. Mr. Pawan, your line has been unmuted. Please go ahead with your question.
Unidentified Participant
Hi, am I audible?
Vishal Kampani
Yeah, we can hear you.
Unidentified Participant
Congratulations to the whole team. Everyone has done phenomenally well. Just couple of questions on the wealth management side. The recurring AEM has grown quite substantially from like 19,000 crore at the end of FY25 to 31,000 crore in this quarter. Is it what has led to this and how can we look, how to look at this going forward? Can you give some kind of guidance on the net new money that you have received and then like the kind of target that you are looking at for the full year also? Any reclassifications or some such thing, if there is any.
Yeah, that’s my main question. Thank you.
Nishit Shah
Yeah. So basically on a year on year basis, the wealth management recurring AUM has increased to 31,180 crores as compared to 22,000 in June of 2024. So that is an increase of 37%. We’ve seen a lot of traction in terms of hiring, new talent, etc. I’ll ask Chirag to take you through the overall strategy over here.
Chirag Negandhi
Yeah, right. Like we were mentioning earlier on the c all, the strategy is clear. We’re on an aggressive build out. We believe that with the complementary other businesses in the group there is a big reason and right to win for us in this business. We’ve started out by investing and we continue to invest by recruiting a lot of good people in the business. Our focus continues to be on the recurring side of the business of course, as markets are markets and they give us opportunities on other transactions, we will continue to do those as well. But we remain extremely focused on the recurring piece and growing this recurring piece fast across all segments of the wealth spectrum.
Vishal Kampani
And I also want to add to that that while our focus will always be on growing the recurring piece, we are not at any point in time going to ignore the transaction piece. And I think I said this earlier as well on one of my calls because the transaction piece allows us to get new clients into the fold. Second, we have a very exciting pipeline on the transaction piece which many of our competitors don’t purely because of the work that we do on the investment banking side as well as the private market side. So the idea is always to engage with family offices and high net worth customers with new ideas and new concepts and many times you get them into the fold as your client with a transaction and then over time they become sort of a recurring revenue client for you.
And this is our strategy where we will continue our focus on both the recurring revenue which is extremely critical long term, but not shy away from having good growth on the transaction side. And third, on the asset management side, we are building our own products internally when that product flow today as a percentage of what AUM we have on the wealth management side is pretty small and we see a significant share of that increasing towards our own products. And that itself will also help in terms of the cross sell internally. So again very excited with the increase in recurring revenue but we are not taking our rise of transactional flow.
Unidentified Participant
Wonderful. Thank you so much for that. Just one follow up. Any kind of guidance on the net new money that you’re targeting in each of the quarters for the full year.
Vishal Kampani
So we don’t have any targets on net new money on a quarterly basis. And see you also have to appreciate if you see the increase in wealth RMs that we have had YOY it’s almost 91% even our sales force is up almost 35% YOY. So I mean if we talk about the business plan targets, I mean they will sound unreal to all of you. So let us just demonstrate that over the next few quarters because right now we are really in recruitment and build out.
Unidentified Participant
Thank you Chirag. Thank you everyone and all the best to the entire team.
Chirag Negandhi
Thank you.
operator
Thank you. The next question is from the line of Anubhav Goel from Kosma Ventures. Please go ahead.
Anubhav Goel
Yeah hi sir. Just just wanted to understand something on the wealth piece. So you know we are above 1 lakh crore and it’s a 1300 crore plus sales business, largely transactional, 72% non retail. So when I compare us versus our peers, anything I’m missing why our pat margins are relatively lower at 10%. Is it an accounting issue or are we externally sourcing it?
Nishit Shah
No, no. So no, no there is never accounting issue or anything. The margins are slightly lower because we are as you see in the presentation the expansion plans are being loaded into the P and L. So as Chirag alluded at the earlier part of the call also that a lot of these costs are being upfronted and the revenues etc we will see over a period of time. So that is why the margins are lower. But I would like to highlight that if you look at it on a year on year basis the margins have improved by 3 percentage points. So as the sort of the teams start building out the revenues the operating leverage will also kick in and you will see the margins improve.
Vishal Kampani
I mean the productivity for the team that we recruit, that we’ve continued to recruit and will keep building only comes with time, right? So that takes a little bit to catch up and that’s what you’re seeing. On a Y oi basis.
Anubhav Goel
I take that. But even if I see companies, other wealth Companies with say 1 lakh crore, 1.5 lakh crore, 2 lakh crore AUM they are at significantly higher profitability than us. Hence I was just trying to understand this.
Vishal Kampani
Yeah, it could be because they have a larger recurring mix and the trail income revenue is higher. So as your recurring mix will go up the trail income revenue should get higher and they probably have more stabilized costs and they are not expanding headcount and infrastructure at the rate we are. Right. So I think if you. It’ll be good if you do a detailed comparison in terms of what is the actual growth in terms of infrastructure build out and people build out versus our growth. And also what is the extent of the profitability coming from products like margin trade finance which are loan based products.
And if those have increased significantly in the last one year and versus us which has been, you know, flat, we’ve had more fees and commission income than actually interest income in this mix.
Anubhav Goel
Okay, sir, got it, got it. So a function of regarding AUM and say interest income. And so just just to follow up on this, you know, there is so much entranced competition, you know, which has grown very well since COVID and you know, wealth has been a bit soft for us over the past few years. So is it, is there a thought like we are going aggressive on wealth now in the past 12 months so we are a little late in the game.
Vishal Kampani
Well, I think little late or little early depends on your horizon. Our horizon is 10 years. So I don’t think we are late at all. I think we’re still early in the game.
Anubhav Goel
Okay, sir. Okay sir, as a last question for the corporate advisory and capital markets piece, you know, if markets remain stable and we see the IPO pipeline unfolding in 3Q and 3 and 4Q, can we see say a 20% growth for this year like 788 crore sales for FY25 and possibly a 900,000 crore sales this year. Is that possible?
Sonia Dasgupta
Yes, it is.
Anubhav Goel
So a 20% growth is what we are targeting this year, ma’.
Sonia Dasgupta
Yeah, in the minimum, it’s like you said, the first caveat. Markets holding up. We are very confident. Like we said, we have very strong pipeline already filed IPOs. In addition, there are more that are getting filed every month. So we are quite hopeful and confident that we should see a strong growth trajectory.
Anubhav Goel
All right, thank you so much.
Vishal Kampani
Thank you.
operator
Thank you. The next question is from the line of Apurva from Buggle Rock. Please go ahead.
Unidentified Participant
Yeah. Hi, good afternoon. This was a question regarding EMC business. Can you give some idea on what percentage of business would be retail, corporate, Chennai and also the channel wise mix? Are we. How is that mean channel wise mix and investor wise mix. Something on that will Be helpful.
Vishal Kampani
So let me put it this way as on date we have got approximately 15,000 crores of AUM out of it, approximately 3,000 crores would be liquid funds that would be predominantly institutional. Otherwise if you look at the equity area of around 11,500 crores that would be predominantly retained either direct through digital or through channels. So our digital is almost, if I may put it in terms of folios, almost 60% of our folios. And if I look at the AUM that would be approximately 15% of the AUM. And otherwise if you look at it. Our r etail channel which is the IFA channel that would contribute to most of the channel made sales. So if I look at 60% coming through channels and 40% through digital out of 60% almost 80% would be coming through the IFA channel. The other two channels which for us is family offices etc. That would again be around 10 to 15%. And the bank and ND is still in the process of getting set up.
Unidentified Participant
And is there any goal in terms of that this much AUM we need to have to get embattlemented banks or have we crossed that threshold?
Vishal Kampani
We have crossed that threshold. It’s just that the process of onboarding in banks takes a bit of time. So since we crossed that threshold pretty recently in the last six to eight months I think we will, we are still in the formative phase and maybe by the end of this year you’ll start seeing banks come along. And to be frank, some of the smaller and mid sized banks have already started onboarding us. Yes, bank is already working with us. IDFC bank is already working with us. IDBI bank, rbl, all of these small to mid sized banks have already started working with us and only the big banks are in advanced stages of engagement and that should hopefully kick in over the next two quarters.
Unidentified Participant
And just I confused got confused at one place the direct would be what percentage of over total AUM means direct business.
Vishal Kampani
If you look at our digital would which would be around 40, around 20 odd percent would be digital. Plus if you look at our. Key. Accounts group which would be another 10 to 11%. So around 30 to 35% would be direct.
Unidentified Participant
Okay. And currently what, what type of yield we would be able to get on equity portion.
Vishal Kampani
Just to just to make myself again slightly distinct, this would be of equity. Right. So 3,000 crores of liquid will be essentially totally direct to institutions.
Unidentified Participant
No can in any net figures that this type of yield we are able to get currently on the equity portion.
Vishal Kampani
Of the if I look at our net Yield on equity AUM, we are touching around 25 to 27 basis points. So the target is to cross 30 over the next six months to a year. This is net of all operating expenses, net of all commission payouts in regular plans.
Unidentified Participant
Okay. Okay. Thank you from my side.
operator
Thank you. Participants who wish to ask a question may press char and one knock. The next question is from the line of true sanghi from Prospero Tree. Please go ahead.
Dhruvesh Sanghvi
First of all, hearty congratulations for like finally seeing the reversal on impairments which was like really awaiting on our end. Second is, you know, after attending phone calls for so long, the kind of breadth that we feel is just amazing. And congratulations to the team that you continue to do well. Just a couple of questions. So if, if all the restructuring exercise and the planning is over, is there a possibility of a buyback or any sort of event on that kind? Now.
Vishal Kampani
We’Ve always maintained that our payout ratio will increase in terms of dividend. But you know, from a taxation perspective, I’m not sure if buyback is as efficient. But I think we will continue to have a pretty decent payout ratio.
Dhruvesh Sanghvi
Okay. The one small bookkeeping question is in the wealth side when we use the words that out of the 1 lakh 15,000 crore it includes distribution, custody and advisory. I think I understand distribution does custardy mean that we don’t earn any income there. But it is just stagnant old type of stocks and over time it will get revamped. As in when we talk to the customers or investors and help them revamp the portfolio. What does custody part there mean?
Chirag Negandhi
Yeah, the custody includes about 20,000 crores at a low yield. It’s not like it doesn’t earn us anything but it does have a low yield. So yeah, from, if you, if you look at the yields net of the custody yield, you’ll see that it’s, it’s in line with, you know, what you’re seeing at the Pearson as well.
Dhruvesh Sanghvi
Perfect. I think I understood.
Vishal Kampani
Now the endeavor would be to the clients who are on the custody side on this 20,000 crore. The idea would be to convert them into recurring or transactional revenue. So we will not stop that effort.
Dhruvesh Sanghvi
Great.
Chirag Negandhi
Sorry, just jump in Chirag here while you focus on aum, which is the right way and you’re, you know, you’re trying to compare this with the peer group. What you will have to. And you know, because it is our focus area, what you should also look out for is how the flywheel works. I Mean, that’s the beauty of how the business is built out. Right. Each of these businesses are allowing us to increase the number of client touch points and the number of customers and then we have the products across the group that we can monetize that customer.
And that’s not, I mean you’re seeing many competitors trying to build this out, but I don’t think anyone does it a s well as we do right now.
Dhruvesh Sanghvi
No, no, I mean my, my point w as actually coming from that angle that m aybe the yields are looking lower because of the custody assets and probably that’s the right thing and it will naturally improve if you are able to achieve what you said. So that’s a good thing.
Chirag Negandhi
That is a given. I mean the custody yield is low and therefore it is that the yields are lower because of that. The point I’m making is you have to look at each product, the custody point aside, even overall on the wealth business or across businesses. This allows us to mine clients deeper across businesses as well. And that’s really what we’re aiming at.
Dhruvesh Sanghvi
Great, great. And one thing related to the 1 lakh crore pipeline. So is this, I mean of course subject to markets and everything, but let’s say broadly, if the market is what it is, does it happen in the next 12 months? I mean that’s like a super number and that is why I’m just trying to clarify. And then can we count something like 3 to 5% on this as a ballpark number or how should we think in terms of revenue translation of these numbers? I’m not asking for a guidance of 612 months. I’m just trying to understand the rational o f how do we as investors over a longer period understand these big numbers converting into revenues?
Nishit Shah
Hi Dhruvish, this is Nishit here. It’s fairly straightforward. If there is a 1 lakh crore issuance, assuming roughly around three banks, you make 2 to 3% so that revenue can be anywhere between 500 to 750 crores. That is the pipeline that we are talking about. If markets stay the way they are.
Vishal Kampani
And you know, I just want to highlight a little bit here which allows you and you know the investors on the call to just think about this business in a different way. Right. First, this is a 50 year legacy business with an extremely strong brand. And when you think about a 50 year legacy in investment banking with a very strong brand, the first thing that occurs to me is that business must have strong recurring revenue because there will be old relationships, there will be long standing relationships which are valued by clients. And in many cases the reason we are able to build a 1 lakh crore pipeline literally without any marketing spend or any advertising spend is because of word of mouth.
We’ve had years of history of clients who are happy with us. They recommend us, not only they give us their future business, but they also recommend us to many friends of theirs in the industry or outside the industry through which we get more business. And everyone focuses and talks a lot about the wealth management recurring revenue. And yes, that’s great. And there is no doubt that we are going to be aggressively gunning behind that our wallet share and our deserved wallet share in that business. But there is a big recurring revenue that we see on the corporate advisory on the private markets as well as the equity capital markets business which the market’s not able to value.
I mean, if we all believe that India is going to do well and it’s going to be a much larger economy five years or 10 years down the line, I think the capital markets will explode even further from here. I mean there will be dips. But if you look at peak to peak profitability, the corporate advisory and the private markets business, the capital markets, the ECM business will grow as fast as any wealth advisory or any asset management business in the country. And the reason is that India still needs capital, whether it’s domestic sources or foreign sources.
Corporates need advice. And both the public markets and private markets have to support that growth. We are not a mature economy, we’re still a growing economy. We’re going to grow at 6,7% over the next 10 years every year. And that requires a ton of capital raising. And we are one of the best businesses to get a phenomenal amount of recurring revenue share from the clients that we already have. And IPOs means new clients because they are IPOing for the first time in the public markets. And that is where we have a leading market share in bringing more clients into our fold.
And then it depends on our execution, which is the risk investors are betting on that we will be able to cross sell and we will be able to convert more recurring revenue lines from that customer. So it’s literally as simple as that. We are going to integrate. Chirag talked about the flywheel, right? And we have a strong brand, deep connectivity, more than enough capital in terms of the net worth. And if you see the capital employed, including leverages, just one is to one to be able to offer all of these products and services to our clients, to keep them with us for the foreseeable future and longer.
Chirag Negandhi
I’ll just Add to that, you have to think of this as a full service investment bank also. Yes, there is the whole pipeline of the IPO market but there is a very strong MA and advisory business as well which absolutely complements the ECM business as well. And what you’re also seeing in the capital markets numbers are the institutional equities cash and derivatives business which itself is growing at a, you know, at an extremely healthy clear. The derivatives business was a much smaller business last year. It will be significant at the end of the year when we share the numbers.
You’ll see it’ll be a very big business for us. So the cyclicality as you’re thinking of this just based on the IPO window is not. It isn’t as cyclical as you’re making it out to be because it’s spread across different businesses that all complement each other.
Dhruvesh Sanghvi
Great, great. Thanks. Thanks a lot, sir. Thank you.
operator
Thank you. Ladies and gentlemen. If you wish to ask a question, please press char in one now. Participants who wish to ask questions may press star and one at this time. Participants who wish to ask Questions may press star N1 at this time. The next question is from the line of Ketan Pitrubhakta from Envision Capital. Please go ahead. Hi sir.
Ketan Pitrubhakta
Am I audible?
Vishal Kampani
Yeah, please go ahead.
Ketan Pitrubhakta
Yeah. Hi sir. Firstly congrats on the quarter. And secondly, what are our plans on utilizing the 2000 crore on of cash in like deployment in terms of segments of businesses?
Vishal Kampani
Yeah. So I think in terms of capital requirements we’ll be investing more in wealth management, asset management as well as home loans. And this capital is reserved for investments on that side on the corporate advisory capital markets and private markets. We are fully funded.
Ketan Pitrubhakta
Okay, thanks.
operator
Thank you. The next question is from the line of Yogesh Bhatia from Secret Investments. Please go ahead.
Yogesh Bhatia
Hello. I actually missed the part on the h iring that you’ve done in the wealth management business. Can you highlight those numbers again please?
Nishit Shah
Yeah. So in terms of wealth RMS, the number of RNs has increased by 91% on a year on year basis from 91 RNs in June 2024 to 174 in June 2025. Our sales employees have increased from 563 in June 2024 to 773 in June 2025 which is an increase of 37%.
Yogesh Bhatia
Okay, thank you sir. That should be all.
operator
Thank you. The next question is from the line of Anubhav Koel from Cosma Ventures. Please go ahead.
Anubhav Goel
Sir, We have done a great job bringing down the Real estate book form 2788-2063. And you have said, you know you will. Now we will focus on growing the loan book. Just wanted an update on this quarter on this remaining piece of 2000 for the real estate book.
Vishal Kampani
Yeah. So I think this, I think we’ve reached a stable level for the real estate book. Significant portion of this 2000 is cash flow back. And as I said we’re not going to shy away from lending in real estate to cash flow back. We just don’t want to have any form of adventurous loans on our balance sheet. So the cash flow backed loans will continue. So I think real estate has bottomed. You can comfortably assume that real estate should be able to grow at a 15 to 20% loan book growth on cash flow backed comfortably year on year for the next two to three years.
Anubhav Goel
Got it sir. Got it sir. There there anything worrisome you can. We can expect from this 2000 crore piece. Any one two accounts.
Vishal Kampani
As I mentioned last year that the entire entire loan book is is post Covid. So and in this, in this 2000 crore book 620 crore is our NPA book which is provided for. So actually the net book is 1400 and it is all Covid and performing exceedingly well. There are not even, there is not even a single account where there is a one day delay in payment.
Anubhav Goel
Great to hear sir. All right sir. Thank you. Thank you so much.
operator
Thank you. Before we take the next question we would like to remind participants that you may press star in one to ask a question. The next question is from the line of true Sanghi from Prospero Tree. Please go ahead.
Dhruvesh Sanghvi
We recently saw that Juhu property announcement. I think with Oberoi can you expand like how does this work in terms of the payouts to us or is it like IRR backed or or similar such deals and how many such kind of things can happen? Because it sounds like a pretty IRR category.
Vishal Kampani
Yeah. So I would not like to disclose the IRRs. But yes, it is a high IRR transaction. We acquired this SRS from the banks, from three banks. We got 2 or 50% sort of market share of the ownership of the. The hotel was in distress. And then we chose to partner with Oberoi Realty which is a very good brand for Bombay real estate in terms of bidding jointly with them to acquire the asset. The entire controlling position on this asset is with Oberoi. We are only a minority investor with Oberoi. And Oberoi will develop. They won the bid and they will ultimately develop this asset with a very small equity position from us.
But the bulk of the realization that we will get will be on the SR once the NCLT approvals are in place, which we expect in the JFM quarter next year. So to give you a perspective, this is the kind of business that we will do going forward where we will use our origination capabilities sitting in investment banking as well as private markets. We will identify transactions and we will do transactions in our ARC where we are partnering with the best of names in the industry and work with them to turn around assets and not take on the responsibility of turnaround ourselves, which is what we were doing 10 years ago in the ARC.
And this is the significant change that we have implemented two years ago in the ARC business.
Dhruvesh Sanghvi
Great. Thank you. Thanks a lot Vishash. Thank you.
operator
Thank you. The next question is from the line of Prolin Nandu from Edelwiss Public Alternatives. Please go ahead.
Prolin Nandu
Yeah. Hi Vishal, Congratulations on set of results. Three questions from my side. One is that I wanted to understand this rationale of selling a very small stake in housing finance business. Was it any sort of partnership that you envisage with them or is it just to put a value, external value to this piece and can we expect more such transactions from here to your targeted IPO timeline of 2829?
Vishal Kampani
Yeah. So let me answer that question. I think the first reason to do the transaction is obviously to invite a good strategic investor, long term investor in the company and insurance sector. Investors are very long term. They take a five to seven year view and it’s good sort of partner to have on your cap table. Second, we of course have a long standing strong investment banking and advisory relationship with the Bajaj Group. So our comfort with the Bajaj Group is very high and we have a lot of respect for their business capabilities and what they have done in the financial services business.
So that excites us that they would choose to make an investment in jm. And we are very excited by the fact that Bajaj is an investor with us on synergies. Yes, there can be a lot of synergies with the Bajaj Group. Bajaj Housing is a very large player on the housing finance side and we have sold portfolios to them in the past from our affordable housing finance business. They could be longer term investors in the housing finance business. When we decide to ipo they have insurance verticals through which we can choose to partner and work with them.
So there are a lot of synergies with a big house like Bajaj. And of course we will explore all of those synergies. But the principal reason was to establish a valuation for the business. And of course when we do an IPO we will over the next three years maybe do a couple of more stake sales like we have done with Bajaj, invite maybe one or two more partners in the cap table and then we will file for an IPO which will be around three years down the line.
Prolin Nandu
Thank you Vishal for that. The second question was on wealth management piece. Now see there is a lot of competition, right? Like somebody else also highlighted, right? But you mentioned that you are taking more of a 10 year kind of a view. But how do you see competition in acquiring talent? Right? Because there’s been a lot of coaching going on in this particular segment and also when you think about the profitability of this segment, right, and you have probably, you know, you have highlighted how RNs have went up from 91 to 174. But have we reached the stage wherein the existing productivity gains of some of these RNs can take care of the incremental cost of hiring the RMs? Have we reached that stage in the business?
Chirag Negandhi
Okay, thanks for that question. Let me break this down. As I said, to answer this, when w e talk about this as being a 10 year timeline, it doesn’t mean that we hope to break even in 10 years and we’ll overspend on the RMs or acquiring talent over the next 10 years, right? We are talking about the phase of the market and the phase of the business in India. We have been aggressive on it over the last one year and the way we see this, that the business in India continues to grow over the next 10, 15 years and beyond. And therefore with that kind of a timeline we are not trying to go aggressive in overpaying an ERM or building out a lost leadership kind of business.
We want to get to a leadership stage which we have a very strong five year plan about how we will get to a leadership stage and continue building from there. And that’s how we’re thinking about this 10 years and not as a fly by night kind of. We come in, we spend money, we build up RMs, we show you a higher count of RNs and we lose money on an RN. On an average for us, post a decent year of productivity the RM start breaking even for themselves any which way. So we are not in the game of trying to go out and poach people at obnoxious commitments of either payouts or equity in the business or any of that.
We want to build a solid team. We believe this is a long term business. We will get people who want to play and be invested with us for the long term. And if somebody is purely being opportunistic from a six month or a one year time frame in terms of hoping that we will force them from that time frame, let me assure you that we will stay away from such people.
Prolin Nandu
Sure. Thank you so much for that last question. Vishal to you would be on the syndication piece, right where you have mentioned that there is ample of liquidity and we don’t want to probably, you know, go out and drop our internal IRR benchmark because of the liquidity. So could you just double click on this part as to, you know, how are you finding the opportunities despite ample liquidity? Is it because we are starting off a very low base or there is enough and more to be.
Vishal Kampani
No, no, no, no. That is. No, no it is. It’s about the mix between interest income and syndication fees and there is ample liquidity. I think you focus more on syndication, right, because you don’t want to compete for a risk adjustment which is kind of lower for you. So your participation rate goes down but your fee income probably goes up because there are more transactions to do when there is ample liquidity. So the point I was trying to make is that we will think of it from a risk adjusted basis and that thought process will not change. For example, when you go back to the peak real estate lending that was happening in the NBFC space in 2017, 18, 19 and we had kind of slowed our loan book growth when everybody was ramping up for almost four to five quarters and that really helped us.
Otherwise God knows what the NPA number would have been. So I think there are times when you have to sacrifice greed for the sake of balance sheet. And what I was trying to say is that we will not take any step where the risk adjusted returns are lower. Having said that, there is no concern on the horizon. I think corporates in India still are in the pink of health and there is no sort of risk that we see which we could see in certain sectors in that time period.
Prolin Nandu
Understood. Vishal, thank you so much and all the very best.
Vishal Kampani
Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today and I now hand the conference over to Mr. Vishal Khampani for closing comments.
Vishal Kampani
Yeah, thank you everyone for joining this call. I think the pressure is now on us. We delivered a great quarter, we made significant investments and I think we will be continuously focused on execution over the next couple of quarters to achieve the internal goals that we’ve set. Thank you.
operator
Thank you on behalf of JM Financial, t hat concludes this conference. Thank you for joining us. And you may now disconnect your lines.