Nuvama Wealth Management Ltd (NSE: NUVAMA) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Ashish Kehair — Managing Director and Chief Executive Officer
Bharat Kalsi — Chief Financial Officer
Analysts:
Unidentified Participant
Lalit Deo — Analyst
Abhijeet Sakhare — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Nirvama Wealth Management Ltd. Q1FY26 earnings conference call. 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 Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Ashish Kher, Managing Director and CEO. Thank you. And over to you sir.
Ashish Kehair — Managing Director and Chief Executive Officer
Thank you. Good afternoon everyone and thank you once again for joining us today. For our Q1 investor call. I have with me Bharat, our Group CFO and the SGA team, our investor relation advisor. I’ll quickly begin by sharing an overview of our performance for the last quarter and the progress we’ve made against most of our priorities. Following that, Bharat can take you through the detailed financial results and some of the key matrices and then we can jump into Q and A. So just to give you a highlight of the key themes and achievements that defined the last quarter for us, I think we were able to get a reasonable broad based growth across most of our businesses.
We saw an increase in revenue and profits and this happened with an efficiency quotient which we typically track. Cost income also was lower than last year’s same period. Client assets grew by about 19% year over year reaching about 4.6 lakh crores and profits at about 264 crores grew by again 19% and an ROE was about 30% plus in Q1. Just a bit on macro, Q1 was not necessarily one of the best quarters from a macro perspective. I think all of us saw that the markets had been range bound. Corporate profitability remains under stress. I think the two positives were the reduction of rates by RBI and liquidity infusion that still essentially held things at some level.
And looking ahead, I think external tailwinds, particularly the US tariffs and broader global trade tensions, these will remain as a potential drag on sentiment and FPI flows for the next few quarters. Having said that, I think the business delivery on the wealth asset management front continues to be robust because I think in some sense we deal with the upper end of the K curve and that segment doesn’t get impacted that much with these kind of things. So that remains robust. And I think from a long term and a medium term perspective, wealth and asset management, the structural growth story of these segments is now very well understood.
That’s why you see increasing amount of competition in these segments Most of the traditional brokers are also entering into this area. Capital markets was I think a bit dry in Q1, mostly IPOs and UIPS were slow at least for April and May. Towards end of June I think activity picked up and it continues to remain strong now as compared to April and May. And I think second half of the year is what everybody is betting. That should lead to a flurry of issues with that. Having said that, I think structural growth drivers remain intact, supporting medium term and long term optimism.
Although near term there could be some earning pressures on corporates which will play out in the markets. But I think broadly our businesses should continue to do well Getting into our business performance now, the first business being NuVama wealth, like we’ve been speaking for the last, I think two years now, almost Managed products and Investment Solutions or MPIS as how we term it, continues to remain as the core focus area for us. And I think the net flows in Q1 remains strong about 2,300 crores with managed products being well above 77%. Out of that and if we are able to maintain this growth rate, we will be able to deliver about 30% on the starting base for this year.
MPIs has now reached majority of the revenues, more than 54, 55% and that is what our desired objective was. And within that the salience of managed product continues to increase, which continues to add to the annuity stream which obviously essentially becomes a part of the growth that you keep seeing on a consistent basis. And I think if we take just the annuity stream, the jump this year would be more than 50, 60% over last year in terms of the income stream. And the way we’ve essentially constructed our offering for this segment is to focus more on holistic asset allocation on not monoline asset classes, which basically makes it more client friendly in line with what they actually need and more resilient to markets ups and downs because then you become an evergreen service provider rather than if you’re only focused on equity as asset class.
And if you see a long winter, then it goes through its own sets of stresses. Plus I don’t think that’s necessarily a very client friendly business in the long run. Second big lever in this business which we feel is technology because you’re dealing with a large number of clients and a large number of delivery points in terms of relationship managers currently we may have let’s say 1200, 1300 and if you look at a 3, 4 year horizon, it could go to anywhere between 3000, 4000 at that scale. If you don’t have most of the technology tools, you know, helping each component of the value chain, starting from onboarding of client, to delivery of advice, to executing the transaction and to complete the servicing and reporting.
It becomes extremely difficult to deliver a standardized and a uniform service and also very, very very difficult to personalize at a client level. So we’ve invested in our portfolio solutions tool, Multi asset recommendation system Mars which is now tested over 30,000 crores of portfolios and we continuously keep it evolving by adding multiple dimensions. Like we’ve now created a family level access, cash flow, tax loss harvesting and stuff like that which basically enables delivery of value to this segment which typically you are able to give to a ultra high net worth segment. Secondly, we have what we call one platform which essentially means that both are actually all the constituents are relationship managers, our external wealth managers, our clients are all on that platform.
So their execution, their servicing, everything is managed at one place. They don’t have to toggle between multiple applications. It’s both on desktop and on mobile. So it’s basically a digital first application. And we’ve also revamped our website which is a client facing website I think some of you can have a look at. Basically is a reflection of how the product landscape is moving. Traditionally the digital platforms used to cater only to let’s say exchange traded products or mutual funds which were in a sense more mass and more readily render themselves to a digital platform. But we’ve taken it to a step ahead.
We’ve taken more bespoke products like pmss, aifs, insurance, everything onto that, OTC products where partially clients can evaluate and then even lead the execution. Maybe some part of the execution gets done online, some of them happen through a payment gateway, but it’s in a sense a complete digital experience for the clients. And lastly what we focus here, which we keep saying is productivity and I think two big levers. One, as the vintage, as the team vintage increases automatically the productivity goes up. And second, tactically using the lending book to increase productivity which you, which I mentioned in the last quarter and you see some sort of reflection in the numbers in Q1 moving to Noama Private I think here the again focus is clearly has been what we call ARR.
And again if you look at the flows we saw about 2,900 3,000 crores in Q1 which again if you analyze and if we maintain the run rate we should be able to deliver anywhere around 26, 27% of the opening base. And second, obviously it’s the addition of relationship managers. We maintain that this part of the market is going through its own set of challenges because many people are entering at the same time. But I think the nuance of a superior platform to service clients and therefore also create more economics for themselves I think continues to attract relationship people, the better ones, the more discerning ones and the people who want to build a more solid long term book.
We continue to attract that segment without any, I would say significant challenge. The areas that we are working on here. I think lending is one place where you will see some movement which will start to happen now in the next three quarters and more syndication opportunities is what we are building a pipeline on moving to asset management. I think Q1 the focus was deployment. So we had raised our first round of commercial real estate fund and the whole focus was to do our first deal which we are happy to state that we’ve concluded it. It’s a prime property in Delhi in Saket.
We bought it from one of the funds and second deal also definitive documents have been signed. It’s again a large transaction in Chennai, some sort of a GCC and again being sold by one of the leading international real estate funds. So I think deployment traction now is there. We will now focus on raising the second leg of this fund and maybe in the next six to nine months we want to add another 2,000 2,200 crores to take the fund to about 4,000 crores in public markets which is a long short fund and absolute return fund performance remains top notch.
The challenge in Q1 was because of the Indian market conditions. I think we saw some redemptions. Therefore the net flows were negative but that was largely in April, May, June onwards the trend has changed and July also the trend has remained robust. So I think we will see a reasonable positive addition from second quarter onwards. And private markets again the focus was on completing deployment and Crossover 4 which is our pre IPO private equity fund. That fundraiser started so maybe in the next two, three quarters. So between these three funds I think in the next three quarters anywhere between 4 to 5000 crores is what we are targeting today.
And new product category which we’ve been talking about private credit we will start maybe by the end of Q3. Asset Services, both international and domestic continue to be strong pipeline of clients in both never been more robust. I think some of the rules have been clarified by the regulators so more and more people are coming in. On the domestic front we are planning to add two value added services in order to create more backward integration and become a one stop shop for our clients. Which are more PMSS than aisle. We want to add the RTA service for them and we also will add trusteeship services and we’ve essentially got the approval from the board to start these lines and we will start floating the subsidiaries and maybe in next six months you will see that action also happening here in institutional equities and investment bank.
I think secondary market volumes with some recovery in Q1 as compared to Q4. However I think they’re still moderate when we Compare it to Q1 or last year. Near term volumes in our view will remain moderate as the market adjusts to the disruptions till the time there’s some certainty which prevails on tariff because right now most of the global players are shifting their flows out to maybe Japan, Korea, Indonesia and the way they are funding it is that they are exiting Indian markets to fund their investments there are So I think that should change once some level of clarity emerges on this tariff side and on the primary market side which was more dry in April and May, I think that activity has started which we should see increased traction in Q2 and Q3 and Q4.
I think with that I will hand over to Bharat to take you through the detailed financial performance and then we can go to the Q and A section. Thank you Bharat, over to you.
Bharat Kalsi — Chief Financial Officer
Thank you Ashish. Good afternoon everyone and welcome to the call. Ashish anyways covered most of the headline business priorities as well as the performance but I’ll still take on the business wise numbers a little bit more granular than what Ashish has covered. So if you look at overall our company performance for the quarter and I’m using a frame of YOY here, more of YOY and less of Q1Q but I’ll still cover wherever Q and Q is required. The consolidated client assets has actually grown 19% YoY to 4.6 lakh crore. This is because of the net flows during the period as well as the obviously the market movement which has helped in but that’s where we are on the client assets.
In terms of the revenue for the quarter it is at 770 crore which is a 15% YoY growth. Our cost is up by around 13%. Many moving parts including the fact that the year increments has also now been added here as well as we have added the capacity on the distribution side but if you look at on the OPEX side it is pretty steady. So there is nothing on the OPEX side it’s mainly the employee side or the distribution capacity which we have added our cost to Income ratio for the quarter one is around 55% which is last year quarter one was around 56.
So is the quarter four was around 56%. Operating PAT actually grew by 19%. So it’s 264 crore rupees which is an ROE of around 30% is where on the consolidated basis. Similarly if you go to the Noama wealth, the client asset is now at around 1.05 lakh crore which is a growth of 20%. But as Ashish was also mentioning our focus on the MPIs. So where the assets has actually grown much faster at 30% and now it has already touched a base of around 32,500 crores. This quarter we have actually recorded our highest quarterly net flow of around 2,900 crore.
And within that NPIs was around 2,300 crore which is like a 64% growth Y on Y basis. So the stated focus on NPIS is actually reflecting in the NNM. Also the last year quarter one we did an MPIs net flows of around 1300 crore. Now it is at 2,300 crore for this quarter overall revenue for wealth Is up by 17%. And again within that if you look at our MPIs revenue has actually grown by 59% on a yoy basis. And the share of MPIs revenue has actually moved from 40% to 54%. So almost 55% now comes from MPIs.
Within wealth business cost to income ratio is steady at 66% as same as last first quarter of last year. And the operating PVT is actually 75 crore which is a growth of 18%. So headline 20% growth on the client assets, 17% growth on the revenue and 18% growth on the PBT for wealth business now moving to Noama Private. If you look at Noama Private the client assets at 2.2 lakh crore which is a 17% YoY growth. Again similar to what happened in wealth where the MPI’s revenue was. MPI’s assets are growing much faster. Here also the ARR assets are growing at 25% compared to the overall asset growth of 17%.
And now the ARR asset base is touching almost 50,000 crore. We are at 48 crore. So give and take we are close to 50,000 crore. And the net flows on the ARR asset also was very strong at 2,900 crore. In terms of the overall revenue the revenue was 155 crore 19% y o y growth within that ARR revenue was growing much faster at 25%. And this is the transactional revenue which grew by 9% YoY and you would also notice that the transaction revenue has actually grown lesser than Q4. See basically transactional revenue I would suggest we should not look at on a quarterly because there will always be a seasonality impact depending on the market opportunities which anyways has a cascading effect on the quarterly CI ratio.
So in a quarter our CI ratio would look little higher. In a quarter it will look little lower but on a full year basis it will smoothen out. That’s how we look at it because transaction revenue is not that it will continue to grow quarter on quarter it will have higher growth as well as it maybe have lower growth but otherwise ARR revenue for private is now 2/3 of the total revenue. 66% of our private revenue comes from ARR sides. That is I think is more reassuring saying that the predictability of the future performance is coming from the ARR side cost income ratio I had covered 69% same as quarter one.
Obviously there is some seasonality impact which happened between quarter one and quarter four but I think we seems to be fine with this as well as because we have added almost like 1920 RM’s over the last year on a base of 118. We’re currently at 137 so they are in the early year of working with the organization. So the productivity level are yet to come to the full capacity. Operating PBT grew by 19% to 48 crore. Again as a headline number if you look at revenue grew by 19% as well as the PBT grew by 19% for private which is steady growth numbers.
Overall Asset Management the EM grew by 54% at 11,800 crore. Out of this 93% of the revenue is actually fee paying. The assets are fee paying. Net flow for the quarter one was lower because of the volatility in the public market side of the funds. But otherwise if you look at June was better than April and May July seems better than June and hence we believe that as we progress to the subsequent quarters it will be back on track. It’s just a quarter phenomena which is playing in overall asset services. The assets under custody and clearing has actually grown by 19% to 1.27 lakh crore and the revenue is up by 46% year on year for the quarter one.
As Ashish also mentioned that this is coming not only from the existing client but we have actually onboarded new clients. So both the CL on the international as well as on the domestic side is helping US capital market. The revenue is actually down by 10%. But as we mentioned in the earlier quarters also there was a M and A deal which was there in Q1 last year. If we exclude that there will be a growth in the capital market as well. Otherwise it’s obviously to some extent linked to the market activity. But we think that it’s on the track this year.
This quarter, the fixed income part of our IBDESK has actually done very good. Maybe they have done the best quarter ever which is tracking well. Otherwise the capital market business seems fine. That’s all per se. Happy to initiate. The Q and A moderator can take on for the Q and A.
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 remove yourself 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 Vivek Ramakrishnan from DSP Mutual Funds. Please go ahead.
Unidentified Participant
Congratulations on a very good quarter. And there was a rating upgrade in the quarter also which is excellent. What I wanted to ask you was on the Whether there is any client concentration in revenues. Is there any top top five clients account for a significant proportion of your revenues or profitability and if so, if you can give a number that will be nothing like it. If so, what are you doing to reduce this concentration? That’s my only question. Thank you.
Ashish Kehair
So Vivek, we have multiple lines of businesses. If I were to aggregate everything and then look at top five clients, I think it will not even be more than 5, 10%. If I look at specific businesses then it could change because top five clients of each business may have different types of contribution to each of those businesses, revenues and profitability. But what we continuously keep seeing is that whether the top five is constant or they keep changing and in most businesses, except maybe the domestic part of our institutional equities business which is largely dominated by domestic mutual funds and where the revenues are driven by the size of the mutual funds, I think in most of the businesses the composition of top five keeps changes.
Unidentified Participant
Yeah, I needed it in a consolidated basis. And your answer is completely. Okay, thanks a lot and wish you good luck.
Ashish Kehair
Thank you.
operator
Thank you. The next question is from the line of Naresh Naikar from Systematic Shares. Please go ahead.
Unidentified Participant
Good afternoon, sir. So, given the recent developments on Gen, can you please elaborate on the potential impact we may have an asset management business and the market share approximate what kind of revenue and un we can see going forward.
Ashish Kehair
Asset management not nourish asset services. Okay, yeah. So I think J Street was one of the clients which have right now not resumed. And they may post their engagement with the regulators may resume anytime because regulator has given them a go ahead to resume. But having said that, even if we assume a zero revenue from the day, let’s say the regulator gave out the notice to them on a full year basis in asset services, we will still end up getting a reasonable amount of growth.
Maybe early double digit kind of a growth. Had they been there, it could have been more like late teens. This could be more early teens. There could be some impact in Q2. But given the run rate which we are seeing both from our existing clients ramping up their balances and the new client pipeline which we have by maybe end of October or middle of November, we will come back to the same levels where we were assuming the industry is zero and from there on the growth again. So on a full year basis we will still end up with a decent amount of growth.
Unidentified Participant
Thank you sir.
operator
Thank you. The next question is from the line of Lalit Dio from Equiros Securities. Please go ahead.
Lalit Deo
Yeah. Hi sir. Good afternoon sir. Two questions. So one on this asset services itself. So like in this particular quarter we have seen some 17 decline in the AM. So what led to that? And also the retentions are like high. So and we have earlier we were guiding like the retentions on a steady state basis should be around 1.8% so. So is this the new normal?
Ashish Kehair
Sorry I’m cutting you because last time when we actually discussed on this I had mentioned two things. One, that till Q3 of last year in our asset services business we also had a representation of our wealth management business clearing activity happening there which. Which we shifted to what we said was self clearing. When we shifted to self clearing we pointed out that the yields will now go up because that was a slightly lower yield business. And in our view depending on where market interest rates are, we should be more around 1.952 to maybe 2.3 2.4 range over a period of time.
That is point number one. So yield on a steady state basis in line with market interest rate should be in this range. And maybe this year it may be slightly higher also from 2.1 second. Again last quarter I mentioned that in the clearing assets there is a composition of cash and non cash or cash and G Sec. And depending on the client size, depending on what trading volumes they do on the equity or the derivative side, these compositions can change. And maybe when the reduction happens, let’s say when you said, you know, reduction in the AUM has happened, the earning assets can still go up within that which is the cash component.
And last point is that don’t look at quarter end, end of period. You should ideally look at the averages because end of period may not be a full reflection of how people deploy their money. There are trades for which collateral comes and then goes away. So average is the right reflection which you should see within which there are moving parts on cash, non cash. So that’s why you see even if that even if the AUM has gone down, the yield has gone up and the income fall is barely anything from 198 to 193 crores.
Lalit Deo
Right sir, answer. And sir, thank you for this elaborate answer. And sir, secondly on could you also break up the like the cost between the clear asset services and IBIE business in this particular.
Ashish Kehair
So we’ve always maintained that overall cost income there let’s say is about 40. So asset services operates anywhere between 30, 30 to 33% and IEIB is 50, 50 plus range. So you can do a math and arrive at a rough blend. Sure.
Lalit Deo
So. And so just lastly one data. So there was this up like in this particular order we have seen an increase in the overall debt for ourselves. So so what would be that related to like the net debt.
Ashish Kehair
About thousand crores of net debt has been added, 500 crores if you see the loan book increase and about 300 crores is the working capital which is payable, receivable difference balances, client facilitation, trade and some margin at the exchange. So it’s split between these three four items. But 50% has gone to let’s say loan book increase. About 30% is working capital.
Lalit Deo
Thanks. Thank you sir.
operator
Thank you. The next question is from the line of Vikram Raghavan from Moon Capital. Please go ahead.
Unidentified Participant
Congratulations on a good set of numbers and thank you for the opportunity. I wanted to ask if the current run rate of operating margin is sustainable. Thank you.
Ashish Kehair
So broadly if you see in our wealth cluster the cost income between the two put together is order of magnitude say 67%. And in capital markets it’s maybe lower at around 40, 45% though wealth will go down by the end of the year because in private where we ended at 69 on full year basis, our assessment is that we should end at 65 with growth cost embedded and wealth wealth which is wealth which is at 66 that will also be maybe 100 basis points lower. So that reduction will happen and maybe there could be slight increase in the capital market side.
So if you aggregate both, we should end up at the same level.
Unidentified Participant
Thank you sir.
operator
Thank you. The next question is from the line of Abhijit Sakare from Kotech Securities. Please go ahead.
Abhijeet Sakhare
Hi, good afternoon. So the first question I had was, you know, from your opening remarks I think you mentioned about setting up an RTA business. So just if you could, you know, give us a few more details as to, you know, you know, what’s the thought process behind this and you know, where do you see this business fitting in the overall scheme of things?
Ashish Kehair
So this is Abhijit, not the regular K Fintech camps which, which basically services the large mutual funds. This would be mostly for our custody clients which is PMSS and aifs because there we feel that they need a one stop shop. Most of the new ones which start out, they need the trustee, they need the RTA and some of our peers have started it and it has helped them get better market share in new registrations. When new AIFs and new PMSs come, if you can offer them a one stop proposition, then your market share in that base increases.
So we’ve actually been working on this for the last one and a half years and evaluating on whether we can partner or we should build. Finally we concluded that it’s best built and we have seen a demonstration of it in one of our peers and it has helped them in reasonable gain of market share. So I think it will be reasonably accretive to the overall business and costs are not much in this.
Abhijeet Sakhare
Understood. And the second one is that if I go back to the Nuama wealth business, I don’t know if you clarified this but the fall in MPIS revenues sequentially if you could point out, you know what’s.
Ashish Kehair
Yeah, largely, largely Q4, Abhijit has heavy insurance.
Abhijeet Sakhare
Ah, okay, understood.
Ashish Kehair
That is the only thing. So if you see I’ll, I can give you the specifics about 28, 27, 28 crores insurance has fallen and rest of the streams have gone up by you know, 17, 18 crore. So there’s a 10 crore movement there. So that catch up will happen as you move to Q2, Q3, Q4 because Q1 is the weakest in insurance and Q4 is the strongest in charge.
Abhijeet Sakhare
Okay. And then again within this I’m guessing like the, the managed product part of it is more trail driven and inference investment solution is, is where you’ll have you know, something like, you know, debt placements and insurance sales. So then in that context, you know, first the breakup between these two segments and then, you know, how does this, you know, move in line with the net flow number that we kind of report on a quarterly basis.
Ashish Kehair
So managed products basically has in. If you look at it from a, from a revenue color perspective, three products, which is AIF, PMS and NF. The only, only nuance is within AIF where a cat 2 and a cat 3 pays us differently. In a cat 2 you earn slightly higher in the first year and then it falls down, the trail falls down and Cat 3 is full uniform. So depending on the salience of sales in a quarter, that component could slightly move up or down in both private and wealth. So that’s how it moves. I think overall sales, if I look at the 2,900 crores, about 77, 78% is managed products and balance net new money.
Sorry, net new money about 23% is your investment solutions. But the right way to look at investment solutions is actually gross sales because you earn like you rightly said, on the transaction. So there’ll be some fixed income which will get redeemed during the quarter and people will roll or buy fresh. So net new money is only a reflection for let’s say the trail products which is your managed products and investment solution revenue is a combination of gross sales. I mean which is the net plus whatever rollover has happened.
Abhijeet Sakhare
Understood. This is very helpful. Thank you so much.
operator
Thank you. The next question is from the line of Mohit from Centrum. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. So basically my first question is in terms of the private business. So we saw that, you know, the number of clients increasing from around 4250 to around 4400 plus. Can you tell me how many of this they have an AUM of more than 25 crores.
Ashish Kehair
The overall, if you see about a third of our clients have a um of more than 10 crores. And I think if I remember correctly I’ll have to look at the number. I think more than 50, 60% have 5 crores. Now Aum with us is a different concept versus the potential of the client. If you are asking whether each of these clients have a potential to invest 25 crore plus, the answer is yes, most of them would have a potential to invest 100 crore plus. But you will appreciate and understand that the AUM builds over a period of time.
It takes three years for it to build. Maybe the first transaction can be a 1 crore transaction or 2 crore transaction. But the client can be a 500 crore. Right. So whenever we onboard a client, what we need to ensure that whether the potential of the client is above 25 crores. And if that is your question, the answer is 100% of those clients will be more than 25 crores.
Unidentified Participant
Understood? No, that is helpful. My second question is in terms of the net flows in the private division. So what we saw is that we saw very big steep decline in that. And I assume we saw in one of the quarters in 25 also the numbers was in significant and we saw, you know, we bouncing back. So do you want to give any guidance in terms of flows in the private division?
Ashish Kehair
So broad maths, if you want to use it will range between 25 to 30% of the opening ARR assets. And if you see the opening ARR assets it would be order of magnitude 40 to 43,000 crores. So if you take a 25, 30%. So anywhere between 11 12,000 crores is where we land. There could be quarters where it could be slightly higher and there could be quarters where it could be slightly lower. What happened last year was in Q1 there was a large inflow because we had acquired one of the investment banking clients who had sold their business to a private equity.
That entire flow came in the first quarter which itself was some 2,000 2,500 crores. So the total net inflow was I think 4,800. Out of which 50% was this one client which was 17 families. I mean 17 different accounts. Now that whichever quarter it comes, it will just jack up. But if you remove that and see then it’s fairly uniform in that sense. And sequentially also it has moved up over Q4.
Unidentified Participant
Understood? No, that is helpful. My last question is on the asset services. I think you broadly, you know, told the different scenarios and growth. But do you think that this division is kind of being very clouded by the regulatory thing? And maybe tomorrow more and more such companies come into the radar. We can have variations in the revenue. So if you can just try give us something that, you know, is this kind of little concentrated to the top clients or how does this division works? That would be very helpful.
Ashish Kehair
So broadly you have to break asset services into two units. One is international clients and second is domestic clients. And if you look at our overall revenue stream, I think depending on which quarter we are Talking about between 70, I think between 70 to 75% comes from international and 25 to 30 comes from domestic. Domestic is fully granular. It’s spread across large number of PMSs and AIFs through which we earn now coming to international international, the set of clients which we have would be more than you know, 150, 200 and there are different stages of evolution.
Out of that 50, 60 will be very large internationally and they continue to test their strategies in India and whichever strategy works, then they start to increase their exposures. I think this incident which has happened will be helpful for the market because I don’t know which direction it will go because it’s right now under regulatory subjugation so I can’t comment much but it is between the client and the regulator interactions are happening and it will take its own course. But I think from a signaling perspective others will be more careful so it will be a more inclusive market.
What we’ve heard from most of the other proprietary traders or HFTs both in domestic and international side that you know now the profit pool has expanded and is available to larger number of players. So yes, people will be tentative as to what the regulator will say but as long as they are careful in how they are deploying their strategies, I don’t see a problem. However, having said that, we should also be mindful that derivatives in general is a topic which bothers regulators because of the losses which retail segment makes now on that, I mean your guess is as good as mine as to what is going to happen.
But in my view as long as there is derivative trading that is happening, you will see market makers, you will see liquidity providers, you will see proprietary funds, you will see hedge funds, high frequency trading funds because all these also add to giving, you know, volume to the market which help your regular long only hedges, arbitrage funds also to operate. If they go away market will, I mean the depth of the market will completely collapse.
Unidentified Participant
Understood. No, but, but I think my question. Was that you know we don’t have. Any concentration of top five or top five ten clients right in this.
Ashish Kehair
That’s what I said changing. If you, if I look at my book today, maybe in the international business the top 10 would contrib 30, 35%. But that is the nature of the business. At any point in time it will always remain like that. But it’s not like top five is 90% of the business, right?
Unidentified Participant
No, I think that, that, that is very helpful. Thanks and wish you all the best.
Ashish Kehair
Thank you.
operator
Thank you. The next question is from the line of Sanket Goda from Aventus Park. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Ashish. This, this moment of Assets from asset clearing to self clearing in it impacted the overall AEM at the asset clearing.
Ashish Kehair
10,000 crores.
Unidentified Participant
Okay. 10,000 crores. And I’m assuming that was meaningfully low yield and that’s, that’s the reason why the yield bumped up in yield.
Ashish Kehair
Yes.
Unidentified Participant
Yep. Yes. Okay. Okay, Got it. And and second thing with asset clearing I just want to check is that means, means is the deposit if RBI being on, on the path of doing rate cuts and if it remains for a little longer period 18 months or 1824 months then then is it fair to say this 2.1% yield, what you are trying to guide will hold up or it could come off or you have measures like extra cash taking to keep it at 2.1 kind of a number.
Ashish Kehair
So I think we could see if let’s say there is a further fall from here of interest rates of maybe you know, another 30, 40, 50 basis points across the yield curve then maybe this 2.1 can fall to 2.
Unidentified Participant
Okay.
Ashish Kehair
Because we also have laddered maturity and like, like you said we will increase the cash component and so on and so forth. So it doesn’t fully go because this is a combination of G, Sec and cash. So full doesn’t translate to us.
Unidentified Participant
Got it, got it, got it. And two more questions, Sorry. One, just wanted to check is that last year in IB we had a lumpy piece so on overall it looks minus 10 percentage. So just wanted to segregate the growth into IE and IB point number one for the quarter and second, given the instinct impact is there in IE2 in your view how you see IE growth to play out or you think this IPO pipeline coming back can, can still help you to report at least flattish kind of a trend in the full year.
Ashish Kehair
So if I take I +IB and I take Q1 over Q4. So let’s say there is a, there is a jump of revenue of some maybe 1820 crores largely has come from IB and mostly from the fixed income side. Because you know that on the, on the ECM side it was reasonably dry in the first quarter and I was largely flattish in Q1. I don’t think if, let’s say, you know, let’s say the Jane street impact on ie. If we run the analysis and we look at the scenarios and let’s say if what you said, if the ECM activity picks up then maybe we will go through a 1520 crore PAT impact for the full year and if it doesn’t pick up maybe slightly higher.
But this is assuming reasonably Low volume growth on the IE side. If the markets were to recover and if some volume comes back then I think a part of it will be made over.
Unidentified Participant
Understood, Understood. And one more is on the cost. I just wanted to check see the other OPEX on sequential basis has come down on non employee cost. So anything to read there. Because we reported 126 crores in fourth quarter and it’s 105 crores in 1Q year on year also it looks little muted compared to the top line growth, relatively lower. So just wanted to understand how it will turn out going ahead.
Ashish Kehair
So if you remember Sanket last quarter when we did the call. No. We clearly pointed out that There is a 1520 crore extra in Q4 and there were multiple items like you know we did the CNBC deal so there was a payout on that and charging on that. All our off sites got bunched. Our institutional equity conference happened and I clearly mentioned that in next year again Q1 to Q4 we will have 105 to 110 crore per quarter kind of an OPEX range and which is where we should end up at. So these were largely Q4 related items which don’t happen in Q1.
So that is the fall which you have seen.
Unidentified Participant
Okay then Q4 again it should go back to that 125130 crore level in.
Ashish Kehair
The current this year we will not have the CNBC and and some of the expenses. So full year basis you can basically take a 7 to 8% jump over the last full year.
Unidentified Participant
Got it. Perfect. Perfect. And lastly on Netflow guidance which you told last time was will be around 1920,000 crores. So we should assume that number you will be confidently delivering. Given. Given we are at 5000 odd crores of ARR flow in the current quarter.
Ashish Kehair
Looks like. Because if I take let’s say about 32 33,000 crores in wealth and take about 30% of that so that should give 7,8000 and private should give another 12,000. So 1920 looks at this point in time reasonably confident that we should be able to deliver.
Unidentified Participant
Perfect. That’s it from it. Thank you. Thank you for your answers.
operator
Thank you. The next question is from the line of Shyam Sampath from MSA Capital Partners. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon. I just have one question I wanted to ask if you can give some color on our view on the SIF and when we start applying for it.
Ashish Kehair
So we’ve already applied for the license for MF because we don’t have MF license and only MFs can do SIFs. Our first round of SEBI inspection has happened and so it is basically progressing. So as and when we get the license, I don’t know how much time it will take. Maybe a quarter or maybe four, five months. And because from a strategy perspective, from the team perspective, from performance track record, everything is in place the day we get the license. After that, whatever logistics is required to file the scheme, get the approval, is the time that will be taken and we will be up and running.
Unidentified Participant
Okay. All right. Thank you.
operator
Thank you. The next question is from the line of Ashish Agarwal from Oak Lane Capital. Please go ahead.
Unidentified Participant
Thank you sir for giving me the opportunity. I have a question. So overall there is an expectation that wealth management industry will go grow from here given there are tailwinds. So based on what I understand is that overall pie should definitely expand from here. But there are more players coming in which means that there will be more pieces of the pie. So how are larger players like Nuvama placed And if the market share gain happens for these players like players like Nuala and other players, will it happen at the cost of unorganized players or. How it will be going forward?
Ashish Kehair
I think largely you hit the nail on the head. So there are two things. One, the size of the pie growth. I don’t think people are really able to comprehend how big it will become. I mean in the last two years if you see the MF asset book has grown by 50%. A 50 lakh crore has become 75 lakh crore. That is order of magnitude 25 lakh crores. Right? And now on this, when it starts compounding, the effect will be huge. Similarly, if you take pmsa, if you take each component and just compound it at 10 12% and then calculate the PI and then look at the penetration.
Today the formal penetration of all of us, all of us put together is not more than 15%. If that doubles in next 10 years, I think the size, the overall size grows by 8 to 9x. So in my view everyone who’s currently operating in the next 10 years, their market share will actually fall. But they would have still grown by 20, 25% compounded for 10 years because newer players are needed, the size will become very, very large.
Unidentified Participant
That is there. I agree sir. The pie will definitely expand for all players. But someone will lose market share. Right. So who is that?
Ashish Kehair
Insurance agents, the sub brokers and the IFAs because they are monoline products. So for a particular client segment which is a certain threshold and above and as tier 2, tier 3, tier 4 start becoming more and more mainstream, you will see that they will either move or fold into the larger players who will be aggregators in some sense and give a multi product platform. But they will cede market share to the more organized players.
Unidentified Participant
Okay, thank you sir. That answers my question. Thank you.
operator
Thank you. The next question is from the line of Vedant Sara from Nirmal Bunge Securities Private Limited. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Sir, can you please tell like what kind of bottom line is currently contributed from the clients who are deploying derivative strategy.
Ashish Kehair
For us in our wealth management side, our total broking revenue if you take in a year is about order of magnitude 240 crores. In that about 40% comes from FNO. 60% comes from cash. So maybe 100 crores of revenue comes from FNO for us.
Unidentified Participant
So these include like the clients like Jane Street.
Ashish Kehair
No, no, no. That is institutional equity. So there about 160. Another let’s say 180, 190 crores or 200 crores would come from FNO on the institutional.
Unidentified Participant
Thank you so much.
operator
Thank you. The next question is from the line of Manoj from Kiva. Please go ahead.
Unidentified Participant
Thanks for the opportunity. As you said, we can grow 20, 25% of the industry for the next 10 years. Can I assume we are also aiming for the same for our net profits for the next couple of years?
Ashish Kehair
We are aspiring for the same. Yes, of course we are.
Unidentified Participant
And so even whatever everybody is trying to ask and not ask in the straight way, even with that we can aim or aspire for the similar 20% growth as we’ve done in the past for the next couple of years as well. Sir.
Ashish Kehair
So that event can have a bearing on this year. Maybe to some extent, but not so it will not impact wealth management, asset management or investment banking at all. So they will grow at the pace and wealth management, both the businesses I think will grow faster than what we grew last year. Asset management also will be faster. The only area that impacts is asset services. Where again basis of scenario analysis which we’ve done, we will end up with growth and not negative. So that leaves only one line item which is institutional equity where we will see some impact.
Where I mentioned about maybe 15, 16 crore of PAT impact in the current year. Once the base is set then you again start growing.
Unidentified Participant
I think things are looking great. So no impact on the news we’ve been hearing about a private equity deal. Current scenario should not impact that as well.
Ashish Kehair
Those, those talks, what that is that is actually not. I mean we don’t get involved in that because that is a shareholder matter and if anything happens I mean you’ll also come to know, I’ll also come to know the same time. So I mean I have nothing more to add on that. Whenever it happens it happens but that has no bearing on the company performance or the growth prospect the way we.
Unidentified Participant
See it of course. All the best and thank you.
operator
Thank you ladies and gentlemen. Due to time constraints we would take that as the last question for the day and I now hand the conference over to the management for closing comments.
Ashish Kehair
Thank you. I think it was a reasonably engaging session. Thank you once again for taking time out. We’ll look forward to meet all of you again in quarter two. Thank you.
operator
Thank you on behalf of Nuvama Wealth Management. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Sam.