Nuvama Wealth Management Ltd (NSE: NUVAMA) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Ashish Kumar Chauhan — Managing Director
Bharat Kalsi — Group Chief Financial Officer
Analysts:
Prayesh Jain — Analyst
Dipanjan Ghosh — Analyst
Mohit Mangal — Analyst
Sanket Goda — Analyst
Ashish Agarwal — Analyst
Lalit Deo — Analyst
Piyush Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Nuvama Wealth Management Limited Q4 FY ’25 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr Ashish, Managing Director and CEO, Nuvama Wealth Management Limited. Thank you, and over to you, sir. Thank you.
Ashish Kumar Chauhan — Managing Director
Thank you, moderator. Good afternoon, everyone. Thank you for joining us today. Happy to welcome you to the Q4 conference call of Nuvama. As usual, I have with me my colleague Bharat, our Group CFO; and the SGA team, our Investor Relations Advisors. I’ll quickly give a brief overview on the quarterly performance and a bit of macro and then maybe Bharat can take you through the detailed numbers and then we can jump into the Q&A. Starting with the numbers, I think headline level, happy to state that on all input-output parameters, the year has been truly a breakout year for us. Client assets grew by about 24%. Revenue for the year-by about 41-odd percent and profits by about 65%.
We closed the year with about INR986 crores of PAT and both the cost-income ratio coming down in the sense the profit margins went up and the ROE has substantially improved from about 23.6% to 31.5%. I think before moving into the business, it’s worthwhile to talk about the year in terms of the macro. The first-half, as we all know was actually extremely bullish from a market perspective. Markets went up significantly.
And correspondingly, a lot of supply started coming into the market by way of IPOs, QIPs, blocks, insider selling. But I think somewhere around the middle of the year, things started to change, liquidity tightening to the tune of about INR3.5 lakh crores happened. RBI rightfully got worried about the rising our unsecured and microfinance loans and I think in order to contain any prospective damage, they actually tightened the rules around both NBFCs and bank. And due to the general elections, I think government also postponed their spending.
So all this along with I think, dollar strengthening, heavy supply in the primary market and simultaneously selling by FPIs in the secondary market, the tonality of the market changed in the second-half. So if you see from September through Feb, the markets continuously kept coming down. And as a result of which I think cyclically things change. So I think two, three things happened. Elections got over, so government started spending the policy pivots also changed.
I think the regulator — regulatory bodies, both the regulatory bodies saw the change at their health. RBI essentially started injecting liquidity through OMO, let the rupee depreciate. There were rate cuts which were done, a reduction of risk-weight was done towards NBFC and microfinance companies, inflation target became more benign and primary supply also dried up, which was I think, simultaneous with FBI buying.
So therefore, Feb onwards, you see that there was a change in trend and hopefully, we’ll see that momentum continue and go on through the first-half of this year. But having said that, Q4 from a market context was a bit tough for everybody. But within that context, I think what we were able to achieve actually is a true testimony to the diversification and the resilience of the platform. And I think the excellent execution by the team Nuvama. I can’t thank them enough. Coming to specifics in terms of the businesses, starting with Nuvama Wealth, we’ve always maintained that there are three, four large priorities which — which we’ve been working with.
First being of course the capacity addition and scale, which we’ve talked about a lot. But the more important part was the whole focus which we did on the managed products and investment solutions. And if you see the flows there, they are quite heartening. I think even this year, we were able to achieve about INR6,500 crores of net-new money. And within that, quarter-four saw about INR1,400 crores in a tough environment, which was nice. And now about 70% of these flows actually comprise of managed products, which in a sense is building some annuity for the future.
So slowly and steadily that book is getting built, which will play-out as we move ahead. In terms of lending, I had meant that I had mentioned this, I think both in Q2 and somewhere around Q3 that we are relooking at the way we run that business and we wanted to fix certain ROE issues by changing the whole proposition and the model, which we have now done. So from this year onwards, you will see that there will be a dial-up that will happen.
Last year, the book was — we did not aggressively push the book because we were changing this model. Although gross disbursements happened and then loans got paid back because of the change of the business model, the ROE improved substantially. But this year, I think on a net basis, we’ll be able to increase the book. I’ve been talking about the investments which we make around the technology-related to both productivity and efficiency. I’ve spoken about our multi-asset advisory platform called Mars. I think now it’s fully functional. Earlier it was in the beta version.
It’s now being used by most of our RMs and top clients. The next-stage is to essentially integrate generative AI into this. So right now, it’s a rule-based engine. We will move it to Gen AI. I think that should help in terms of both client experience, consistency of delivery and improvement of productivity of our field force. And second, which is a big move which we did was there was a fundamental challenge when you’re dealing with such large set of people, the traditional classroom trading model starts to become ineffective and extremely expensive to execute. I think with the — with the advent of Gen AI, even that we have considerably moved.
And now more than 90% 95% of our training of relationship people in that business happens through a self self-done tool, which we have created where they can at their own pace and time interact with With the fictional client on a product and get real-time feedback. And the acceptance across-the-board is phenomenal. We will see the numbers in productivity also showing through, which actually if you see the numbers, it in a sense has started reflecting there. Coming to Nuvama Private, again, there were three clear priorities which we had called out, building out capacity at a reasonable cost, build offshore as a proposition and focus on ARR in terms of increasing the proportion of ARR as part of the overall business. I think on all three, we’ve made significant progress. Capacity, we’ve been able to add about 10% this year. And here, I would like to comment. I mean, I think in a sense, there is some — some sort of madness happening in the market right now. The way people are building out teams and the way our compensation is being dealt, I don’t know, it looks like a race to death. I think at a time when cycle goes bad, I maintain that many, many of these will get decimated. I think some sense should prevail over a period of time. We’ve been able to build, I think like-minded people have joined who appreciate platforms, who appreciate building a book and not look at immediate short-term gratification, but how a platform can help them build a sustainable practice and deliver value to the clients and therefore create long-term value for them. On the offshore side, we’ve been now functional — fully functional in Dubai. We’ve hit operational breakeven with the current set of people. We will now add capacity there. And I think the three lakhs which we had, which was India Outward, offshore inward and offshore, all those three lakhs are operating well. On ARR assets, you would have seen the data book. Even in Q4, despite I maintain the challenging environment, we’ve been able to do about INR2,100 crores of net-new money. And in this — in this time actually more than 100% is managed products because we saw some down in the loan book in the ARR assets. And overall through the year, we’ve been able to do about INR10,000 crores, which is — which is actually 30% on the starting base. On the back of last year, which was 26% on the starting base. So I think all the three strategic priorities, reasonable progress has been made. On asset management, Q4, the key highlight for us was the commercial real-estate fund, we had to take it to first close, which happy to state that we had done, we had also issued a press release. And as we stand today, we’ve made our first deployment. We will talk about it in detail in the next call maybe. But just to give you a brief, it’s a marquee asset, office asset in Delhi, more than 95% leased with an equity value of more than INR460 crores. And I think it was one of the most price assets by most of the funds we were able to pull it through. The next phase will be to take this fund from current INR1,700 crore to INR4,000 crores in maybe next two to 3/4. For our public market funds, which basically comprises of long-short and absolute return, which as of date have become largest in their categories in the market. Now the longshot fund now has a three-year track-record. The absolute return fund has a one-year track-record. I think for this part, Q4 was a bit challenging because the whole public market space went through net outflows. We still saw net-new money coming in here because of the market fall, I think people were circumspect or postponing decisions or maybe redeeming. So I think that played out here. Hopefully, with the recovery now happening in the next two, 3/4, we will see the momentum come back. We’ve also in this bucket launched our gift fund. We’ve created the pipe now we can access capital, we now need to go out and basically place these with institutional and wealth customers in overseas jurisdictions. On the private markets, our focus has been deployment of both in our crossover and venture debt fund, which in this quarter we made three, four deployments. Now in our crossover fund, about our 15% of money remains to be deployed, which should hopefully get through in the next maybe seven, eight months maximum and we will look to start raising our fourth crossover fund over the period of this year. And lastly, I’ve been talking about private credit as a strategy. We’ve now firmed up that we want to launch that strategy. We are in the process of identifying and closing the team and maybe by Q3 or Q4, we should be up and running in that. Coming to asset Services, this I think has been a breakout year for this business on the back of last year also, which had seen reasonable amount of growth. Both international and domestic clients have been growing meaningfully. On the domestic side, we have about 20%, 22% incremental market-share. International side also, there was some bit of uncertainty that had seeped in because of this entire F&O regulation and all that and people thought that no volumes will go down, which they actually went down, but we saw that this business was relatively inelastic in that sense because typically people do not take margin in and out, even if you have two expiries in a week and they compute the peak margin required. So basically the peak margin, our float actually went up in Q4 also. And with this uncertainty around this F&O going away, we are seeing immense amount of interest coming from all the clients who are sitting on the fence. So the pipeline is extremely strong in this business. Coming to our Capital markets business, which is institutional equities and investment bank, I think on a collective basis, we’ve been able to weather the downfall. Our numbers are lower than Q3, but marginally lower as compared to the peer group. We were able to do a lot in fixed-income. We were also able to increase the market-share in institutional equities in Q4. So you are seeing resilience. Obviously, there was a slowdown which happened in the primary market and we just saw one IPO of. Now for the last three, four days or five days, again, we are seeing a flurry of IPOs coming back. We are also focusing on advisory transactions and fixed-income remains intact in the sense the fixed-income in Q4 was also intact and even now remains intact. And the pipeline in investment bank also the activity has slowed down, but I think mandate creation and pipeline is extremely strong. So if the market remains stable at this level and the activity comes back, I think we’ll be out there the executing deals and come back with our numbers, although the fall, again, as I said, is relatively far, far lower than what the market saw. I think this is about it from my side. I will hand over to Bharat to take you through the detailed numbers for Q4.
Bharat Kalsi — Group Chief Financial Officer
Thank you, Ashish, and good afternoon, everyone, and warm welcome to all the participants on this call. Ashish anyways covered all the headline number, but I’m happy to share the overall performance for the quarter as well as for the year. If you look at this FY ’25, this has been a breakout year as Ashish also in the starting alluded to and it actually creates that base effect of having a large numbers coming from wealth, private as well as asset services side. So with that, the number on the consolidated basis, if you look at our client assets is now at INR4.3 lakh crores, which is a growth of around 24% on a year-on-year basis.
This has been held through the sustained inflows, which is coming in and obviously, the market supported in that whole growth of 24%. For the quarter, the revenue was at INR771 crores, which is a strong growth of 29%. Here I’m referring most of the numbers on a Y-o-Y basis. Wherever I use a quarter-on-quarter, I’ll be specific about it. In case of overall full-year revenue growth, the growth was at 41% and this was a broad-based growth, not that only few businesses did. Obviously few did exceedingly well and fuel did a growth of 15% to 20%, but it was a broad-based growth.
If you look at on the overall cost, our cost is at around INR435 crore for the quarter, which is a 22% growth and data book as well as the presentation is there on the website. If you look at the breakup, the fixed-cost has gone up because we have added around 350 odd RMs over the last 18 months, obviously, as they start building up, the fixed-cost continues to go up. But I think that’s an investment which we have as a strategy, we have decided and we continue to invest on that. You would also see that the operating expenses has grown.
So if you look at the full-year operating expense, that has gone up by 10% and which I think seems very reasonable given our size of operations and as we are expanding. But on a Q-on-Q basis, you would see that there is OpEx growth of around INR30 crore INR32 crores between Q3 and Q4. See, the key reasons are there are few one-offs which are there in Q4 and as well as typically Q4 will always have some seasonal expenses. So I’ll just take some broad one-offs as well as seasonal Expenses. Like we do our flagship IE conference, which maybe few of you would have also attended in Q4 as well as all our businesses and enterprise strategy offsite happens in the quarter-four. So those are the expenses which are specific to Q4. You can see the similar trend in the previous year Q4 where the opex suddenly goes up. Other than that, we — as we — Ashish was mentioning that we have added capacity on the private side. So there is some cost which comes in terms of recruitment and all. We are also investing in our marketing spends because we want to further build-on the Nuvama brand. So there are some investments which we are doing it and the part of that is actually sit in-quarter four. And if you go back to my Q3 update where we specifically mentioned that we are looking to — we were actually in the process of modernizing our few of key systems, APIs, applications on the tech side, it was more of an upgrade and that is what has actually — most of it has already been done and that’s why the cost is sitting in the Q4. So those are like a conscious investment which we wanted to do and they are coming in the Q4 side. And there were some Q3 — in Q3, there were some specifically things which we got like a — some credits from our cloud partners as well as there was a termination of lease, some reversals were there. So that’s why the delta looks higher. But otherwise, if you see overall quarter-on-quarter, our opex remains between, say, INR95 crore to INR105 crore, give-and-take the seasonality part of it and the full-year growth was 10%. I think we will be in the similar zon or similar zip code in terms of opex growth year-on-year, so close to 10% seems reasonable and that’s our expectation. With that, our overall CI is at 56% compared to Q4 or 60% of Q4 last year, which is a growth of 4% and our PAT is at INR255 crore, a growth of 41%. Full-year basis, the PAT has actually gone up by 65% to INR986 crores and our ROE for Q4 was around 31% and similar number for the full-year at 31.5% or so. So that was on the overall financial performance. With respect to dividend in October, we declared our H1 interim dividend of INR63 per share. And in the yesterday Board meeting, the Board has actually approved a INR69 dividend for the balance — balance year. With this, we are within the range of our dividend distribution guidance. And on an average, 48% 49% of the last two financial years, we have paid it as dividend to the shareholders. That’s how the overall consol level performance looks like. In terms of coming back to specific businesses, Nuvama Wealth, again, similar to like company overall growth the Nuvama assets has grown actually 20% Y-o-Y. But I think if we more specifically also look at the NPIS assets because broking assets, the mark-to-market can do plus/minus, the NPIS asset has actually grown much faster at almost 29% and it’s touched INR30,000 crores. That’s where the Nuvama wealth numbers are looking like. And again, similarly, as Ashish was mentioning on the overall flows and our focus on our NPIs, the NPIs flows are actually almost INR1,050 crore INR1,400 crores in the Q4. And on a full-year basis, it is INR6,500 crores, which was last year was around INR5,000 crore. I’m specifically talking about NPIs flows and not the total flows. Overall, the revenue was up by 17% and this was marginally lower than what we initially thought, but that was led by broking revenue. As you know that quarter foresee saw some extra volatility and that’s where the broking revenue was marginally lower. Overall, the CI ratio is at 67% as we’ve been mentioning that if we remove the growth capital, which means the cost of the new RMs as well as the associated revenue, the CI would have actually improved by 250 to 300 basis-points. So this is a conscious thing which we are aware of and we are okay with that as we are still building on the capacity at the business level. Operating PAT was up by 14% at INR60 — operating PBT was up by 16% at — 14% at INR66 crore. Similar to wealth, even private for the quarter has been a very good performance in terms of overall client assets up by 17% at INR2 lakh crore. Again, the ARR assets, our focus area grew much faster at 33% and now it’s at INR45,000 crore, give-and-take. On the ARR asset floors, this is up by 52% on a full-year basis. So last year, we did around INR6,600 crore and this year we have actually crossed INR10,000 crore of new — net-new money in the ARR as such. So that’s I think one benchmark where we are now touching INR10,000 crores of annual net-new money. Overall revenue, revenue quarter-four has been very strong. We — in the initial quarters we mentioned that the revenue growth for private was little lower. Q4 is a complete full-year base — full reflection of the reflection of the activities and the growth was at around 24% and our ARR revenue now contributes almost 60% of the private revenue, so which is where we are focusing on. Similarly, the CI ratio excluding the growth cost of the new people and revenue would have improved by 250 to 300 basis-points from what we have reported. The overall PAT PBT was actually up by 12% and in terms of number of families, we are at 4,250. We added around 575 new families during the year and the RM count stands at 135 now for this. Asset management, a few good things, the AUM grew by 62% is at now INR11,300 crore. Public markets and the commercial real-estate actually head in. I think the one number which is more important is that out-of-the total AUM now 92% of the AUM is fee-paying, that’s where I think the most — that’s how the journey is going on for the asset management business. In terms of the new flows, you would see that the quarter-four was subdued at some INR300 crores compared to last quarter of around INR1,200 crores, but that’s primarily till last quarter, we were focusing on our commercial real-estate fund where we raised almost like INR700 crore in Q3 and Q4 we did not raise because that fund is at the deployment stage. And Ashish also mentioned about how we have actually closed our first deal on the — our commercial real-estate funds. So it’s nothing like the — the numbers has gone down. It’s just the commercial real-estate fund focus is now more on the deployment. That’s where the numbers are. HS Services, the assets under custody and clearing is actually up by 38% to INR1.26 lakh crore and the revenues up by 85%. Overall capital market, again I and IB, despite the — maybe the performance by others, our number on a totality basis for put together was up by 16% on a Y-o-Y basis. The quarter-on-quarter, obviously, the ECM activity was lower and hence the IB numbers were relatively lesser than what it did in Q3. But the pipeline in terms of the mandates, which is at a very different stages, like we’ve been working on those mandates and there are new mandates, which we are talking to them. They are at a different stages of closure, but the IB pipeline in terms of mandate on the ECM side looks strong. And on an overall basis, I and IB continue to maintain or rather improve their market-share in the irrespective business lines. I think with this, happy to share that our overall performance for FY ’25 has been satisfactory. And now we can go for the Q&A. To the moderator if we can open to we will now begin the question-and-answer session.
Questions and Answers:
Operator
Anyone who wishes to ask a question may press RN1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press TRN2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles, our first question comes from the line of Prahesh Jain with Motilal Oswal Financial Services. Please go-ahead.
Prayesh Jain
Hi, Ashi. Hi, congrats on a good set of numbers. Just a few questions. Firstly, on this asset services side, while we have seen that the assets under custody and assets under clearing have more or less been flattish sequentially in Q4, but you still have seen a very good jump-in revenues. What will be that attributed to? So typically, average assets if you see within that the float has actually gone up press. One, because of the new clients which we continue to acquire, there the proportion of cash to non-cash collateral or GSEC is normally higher.
So that becomes a big contributor in terms of — in terms of the number going up and for the asset services business in general. And some yield pickup has also happened because if you see now the yield has — is inching towards 2%. And there also the — it’s also a combination of two things. One, of course, new client
Ashish Kumar Chauhan
Acquisition continues to happen where we keep on getting the cash float. And second, as if you remember in the last call, we said that we moved to self-clearing for our wealth business. So that part of the float went out. So in Q3, it was only for part of the quarter. Q4 you see the full effect. So the yield went up even further. So there is an increase in yield and increase in the float assets within the overall assets.
Prayesh Jain
Okay. Okay, got that. Now coming to the private segment where we have seen transaction revenues are holding up pretty strong, you know, it’s at about INR90 crores in this quarter. What would you — that attribute to the — would it be unlisted shares that have created this or how should we look at it? So combination of that transactional revenue also has some bit of broking income, which of course was not up for this quarter.
Ashish Kumar Chauhan
So what you’re saying is right, it was unlisted shares, fixed-income and some other deal downselling. So combination of these three because transactional income basically has only three, four line items, right? One is brokerage, second is unlisted, third is your structured product MLD and fourth is fixed-income. So split between all these, there was some bit of heightened activity in both unlisted and fixed-income in Q4.
Prayesh Jain
All right. And just one question on the overall cost-to-income on the wealth management on both wealth management side. While you’ve been investing over the years, over the last one, 1.5 years to kind of add capacity, when do we really start seeing the benefits of these in terms of reported numbers in terms of profitability? Do you think that we are still a year away? How should we think about this? And how long would you continue to invest in-building in-building more capacity in both the wealth and the private side? See, if you look at it and this — we’ve discussed in the past and I’ve also asked you this question and you only told me that you should continue to invest. So I think that follow the same, we follow the same because if there is growth to be had, right?
Ashish Kumar Chauhan
Now as a business, you have two choices. One, you say that, okay, I want to show better cost-income, stop investing in new talent. Immediately this 66 moves to 63. Now in the short-run, that may be good, but I think in the long-run, that’s extremely damaging to the business. As long as you were able to get talent and you’re able to move them on the productivity trajectory. Now this is a business which is a slow movement from, let’s say, 1x productivity to 4x, 5x productivity. It takes three to four years.
You cannot really — because unless you start doing things which are non-aligned to customers, sell very-high margin products, which again will be damaging to the business and to the franchise. So if you see a two, three-year trajectory as this productivity moves up, cost-income gradually will keep coming down. I don’t think we are going to slow-down investment considerably, maybe in Nuvama wealth for let’s say, one, two quarters because now if I look at the cohort of 1,200 plus RMs which we have, about INR500 would be less than one year.
So in effect that 500 on an aggregate basis are delivering 1x, right? So whatever number jump you’re seeing is actually coming from the balance 700. Now the idea is to get some part of this 500 to slightly higher productivity. So we may take a pause for maybe one to two quarters, focus on this and then restart. But if you ask me from a two, three-year perspective, I don’t think the idea right now is to, you know, focus obsessively on this number and not build capacity because growth is there to be had.
So is it fair to assume that your cost-to-income, which was you know at 66% for Nova private and 67% for Nuvama Wealth, this should hold-up in the near-term and we shouldn’t keep these kind of numbers for — from our — from our modeling perspective for the next couple of years. For FY ’26, I think we are actually looking at 100 basis-points down.
Prayesh Jain
Okay. Okay. And this is at the full-year number, not at the Q4 number because Q4 number was even higher.
Ashish Kumar Chauhan
As the full-year number for the full-year. Because Q4 — because Q4, if you also see the cost now whenever we discuss, there are certain seasonal costs which bunch up at Q4. So Q4 cost is not the right reflection, at least the opex manpower cost will still be even in manpower incentive and bonus, there could be catch-up due to year-end and stuff. But otherwise on a full-year basis, you should see and then 100 basis-points is what we want to target.
Prayesh Jain
Got it. I’ll come back-in the queue for more questions. Thank you.Okay. Thank you. The next question comes from the line of Deepanjan Ghosh from Citigroup. Please go-ahead.
Dipanjan Ghosh
Hi, good evening, sir. So just a few questions from my side. First, in terms of the transactional business, despite broking being a little volatile, we have seen that do quite well both in private and wealth. So just wanted to get some sense of when you let’s look at the next one to two years, what will be the key revenue streams in this transactional portion, excluding broking obviously and what’s the pipeline sort of looking for new product segments that you can think of in that segment? Second, in your opening remarks, you mentioned that the pipeline on the IPO side is holding up well.
So for a modeling perspective, can you give some color on the — on the pipeline or revenue potential out there? The third question is coming back to the clearing business, obviously, last year was a year of significant number of new client additions, how is that looking like, let’s say, for the next four, five quarters? And just one datakeeping question. If you can quantify your corporate treasury book in the Nuvama private sector?
Ashish Kumar Chauhan
So let’s start with the first one. The first one is on the streams of transactional revenue. And transactional revenue would largely remain what we are seeing, I mean the same unlisted shares of fixed-income, MLDs, some corporate deals and all. I think by Q3, there are two streams which will get added for us maybe by Q2, some and Q3, some Q2, I think we will see some addition of downselling of our commercial real-estate where — where now since we have a commercial real-estate fund and obviously, the deal sizes there are large and when the fund goes and invest, you may get assets which are extremely good, but it may not fit fully within the funds ambit.
So we may do a co-invest with some of our large clients and family offices. So that will be one that will get added. And if by Q3, we are able to get the credit fund going, then in Q4, you will also start seeing credit downsell. So I think these two meaningful streams are there in the future, which will get added in terms of transactional revenue. From a trajectory perspective, unlike ARR, it will go up-and-down quarter-to-quarter.
But on a full-year basis, I think 40% to 50% — 40% 45%, we will be able to maintain. Your second question was around the IB mandate. So IB — if I disintegrate and look at our overall IB, you obviously know we have a very, very strong fixed-income practice. And that we are seeing secular growth for the last four years and even now that growth continues because unlike the equity side of the market, it’s a — it’s a very, I would say a repeatable market because when somebody borrows by definition that borrowing comes to an end, then they have to reborrow, right?
Unlike an IPO, once done is done, then if you need fresh capital, then only that issuer will come and access the market. So obviously, the fees in terms of percentages and quantums are lower, but the repeatedness of the business is significantly higher. And we’ve also built more pipes there because of this entire FII interest or FPI interest in India, given the — given the has been included in the bond indices, that activity has grown substantially and we are focusing on that. So we have a lot of FII side of business that is coming in on that side. So that part remains strong.
On. On the non-fixed income side, in addition to IPO. So IPO, in my view, we have 30 to 35 mandates which are signed. Now we will wait for the market condition, investor appetite and all that. So you are going to see that coming through. I will not put a number to that, but the number is reasonable. And probabilistically also we feel if the market sustains at this level, we will be able to play that out. What we are adding to that Is an intense focus on generating mandates on non-ECM side, which is advisory. There also we have about 10, 15 mandates now, some sell-side, mostly sell-side because buy-side doesn’t get materialized so easily, mostly on the sell-side. So that’s on the pipeline side on the IV. On the custody clearing, I think this year was a breakout year. I don’t think we will see an 80%, 85% growth next year. I want to, but I don’t think we will. But having said that, I think the entire FNO thing, which was clouding the whole space for the last six months is now out-of-the way. Two things we have seen. After the implementation of whatever the regulators had put out, we have seen the full-quarter four play-out and we have not seen a dent in revenue because again, people want — people operate with a peak margin which is intra-day and that doesn’t fluctuate that much, that keeps going up given the deployment opportunity they have. Now with the new rules with the — which is now as a discussion paper and maybe we will get finalized where the limits have been increased to INR1,500, IN 10,000 and the limit will be monitored on a delta adjusted open interest basis. There are flexible rules on index futures and market-wide open position will also be linked to cash volume. So this has removed a lot of uncertainty because the regulators also took feedback from most of these international clients who operate in these markets. And more importantly, the intraday peak has been removed from being a limit than to monitoring, which is there in most of the developed markets in the world. So subsequent to this change, the amount of interest that has started to come back again, most of the people who are sitting on the fence are coming back. So I think we should see a good year once again. Again, I’m repeating, it will not be a similar increase like we saw last year, but it will be a decent jump even on this elevated pace. What was your last question, Depajan? I forgot. Sir, sir, the corporate treasury book on the Nuvama private center quantum total Nuvama private, the asset size is about INR1.93 lakh crore in that the corporate treasury book should not be more than INR10,000 crores.
Dipanjan Ghosh
Got it. Got it. Thank you and all the best.
Operator
Thank you. Our next question comes from the line of Mohit Mangal from Centrum India. Please go-ahead.
Mohit Mangal
Yeah. Thanks for the opportunity and congratulations on a good set of numbers. So my first question is on the net flows. I mean if I look at net flows in the wealth division, you know that number seems to be pretty low at around, say, INR630 odd crores. And if I look at previous two quarters, it was more than like INR2,000 odd crores. So just wanted to know, I mean, what led to this downfall and going-forward, how should we see the net flows within the well division? So if you look at the data book, Mohit, we give two lines on the net flow.
Ashish Kumar Chauhan
So there is a net flow and then there is a MPIS net flow. Actually, the relevant line to see is the MPIS net flow, because the other net flow includes loan assets, it includes broking assets where the bearing of the net flow to revenue is not correlation. On loan assets, it will be, but loan assets is a discretionary item for us in the sense, we can dial-up and dial it down the way we want. It has less of a function of a market phenomenon for us. But broking assets, the correlation of net flow to revenue is not directional. Broking assets, the higher correlation is between the volumes in the market and the directional trend of the market.
So MPIS net flow is what you have to see and that is what we target. That is what we want to focus on because that contains a combination of annuity assets and the investment assets, which is your fixed-income MLDs and all. That net flow, if you see from a year-on-year basis has grown by about 36% — sorry, 30%. And on the base of last year, it has grown again by 30% and even in Q4, which was, I think an extremely challenging quarter in terms of overall equity environment and uncertainty around that, we’ve been able to do a INR1,3050 crore INR1,400 crores.
Mohit Mangal
Understood. That is helpful. My second question is on the. So I just wanted to know, I mean, how has been the attrition at the RM and the client level? And do you saw any loss of AUM because of the client attrition?
Ashish Kumar Chauhan
Not really. In both the businesses, we have not seen attrition of clients. Attrition of RMs is a normal natural phenomenon and both business operate very, very differently. In our private business, typically people take three, four years to build books. So for them to leave is like going and rebuilding, it’s a exercise. So there the regret attrition for this quarter is actually zero. In our Nuvama wealth, we categorize RMs in different buckets. So at the top-end, we call the big league there, the attrition would be order of magnitude. About 300, 350 people come in our Big League out of our 1,200, we would have lost three, four people there. And out-of-the rest, the attrition can be 25%, 30% as compared to banks which operate at 45%, 50%.
Mohit Mangal
All right. And our endeavor is to increase by around 10% to 15% RM count.
Ashish Kumar Chauhan
Yes, that’s right.
Mohit Mangal
Okay. Thanks and wish you all the best. Thank you.
Operator
Thank you. Our next question comes from the line of Sanket Goda with Avendus Spark. Please go-ahead.
Sanket Goda
Yeah. Thank you for the opportunity. Ashish, on the core flow number — next flow number means if I look at INR10,000 crores in private ARR, NPI is INR6,500 odd crores and AMC INR4,500 odd crores. So INR21,000 crores, this is core net flow number. So I just want to understand given this number has grown by 65 percentage almost year-on-year. I mean, how do you see this growth to play-out in ’26 and which segments where you will see the maximum flow to happen, whether it is private or NPIs, just want to have a color how it will play-out. So in terms of size of the net flow, I think private will be highest.
And in terms of percentage, I think I would assume now if you look at the closing ARR book, it’s around INR44,000. If we are able to do anywhere between 25% 30% on that, so you are again looking at a INR10,000 to INR11,000 crore coming from there is what we will target. Anything above that is even better. Similarly, on the wealth side, now our NPIs book would be around maybe INR30,000 crores, again a 30%, 25% to 30%, so maybe INR7,000 crore INR7,50 crore 8,000 crores there. On the asset management side, this year, public markets led the net flows.
Ashish Kumar Chauhan
I think in the coming year, depending on how the public market flows settle, I think on the commercial real-estate side, we are looking at a total net flow. So let’s say we’ve already had INR285 crore in asset management in-quarter one, if I see the remaining 3/4, at least INR2,000 crores INR2,300 crores will come in commercial real-estate, INR3,000 crores to INR4,000 bare minimum target in the public markets and say about 800 to 1,000 in the private market. So if you add all this together, we are again order of magnitude, 5,000, INR6,000. So leaving — leaving your credit fund aside because I think that the real play will come in FY ’27 and not in ’26. So if I add all this together, we come back to some INR23,000 crore INR24,000 crore at the bare minimum is what we target.
Sanket Goda
Okay, perfect. So sir, which means that this AUM growth of again around 20% plus is still overall possible in the view you have, right?
Ashish Kumar Chauhan
Yeah. Yes.
Sanket Goda
Okay, perfect, perfect. And the second question, maybe again back to the cost number. So if I look at whether that is private and mid-market put together, you are at 67% 68 percentage and your capital market business is at 40%. And I’m just wondering, given you had a significant increase delta change in the contribution of the capital market business in the current year. If the capital market business broadly grows in-line with which the wealthy business next year, then is it fair to say that 55% cost ratio what you reported might reach up back to 57 58 and because I’m asking this question because you said 100 basis improvement in the cost ratio, you — that 100 basis you meant to — meant to only for the wealth side or overall company put together?
Ashish Kumar Chauhan
That was for the wealth side, Sanket. If you look at the — if you look at the balance too, so I’m saying there will be some improvement in the asset management, obviously, the quantum is small, so the impact on the overall will be lesser. But in capital markets, if we disaggregate again asset services, I think broadly, we will be at a similar cost-income this year or we Will marginally improve over this year. Maybe institutional equities and investment bank, if the growth is slower, that is also a business where the variable-cost, Sanket, are very much linked to the growth of revenues. So there will be some adjustment which will happen there. So it’s not that the revenue has a straight pass-through to the PBT. So even if that, let’s say, degenerates by 200, 300 basis-points. If you are able to improve wealth by about 100 and let’s say, asset services also by about 100, we should be able to neutralize. But worst-case, you can see maybe a 50, 100 basis-points decline if we have a average year.
Sanket Goda
Okay, perfect, perfect. So basically the predominantly the will be at overall company-level to maintain the same cost-to-income ratio what you experience that would be 5%. Got it. And lastly on — maybe two more. And lastly on yields, see, my point on yield is that maybe there could be some seasonality and product mix factored. But if I look at from ’24 to ’25, the yields, honestly, except for the clearing business, there has been a bit of depletion.
So should we assume that the yields what you have realized with respect to ARR, NPIS and maybe NC business will hold-up and clearing business 161 is what you reported for the full-year will be — will be the new normal going ahead?
Ashish Kumar Chauhan
So actually clearing business, I think the new normal should be closer to maybe 1.8, 1.9 assuming some decline in the FD yields coming in maybe Q3, Q4 and already we are sitting at 2%. So combining the 2%, we will still be higher than 1.6%. In private, I think this will sustain. Obviously, quarter — some quarter will be up and some quarter will be down depending on the composition of AIF 2 versus AIF 3. Wealth also in my view, unless you see the — well, Sankesh, you have discussed this right, there is a denominator effect of MTM of equity assets. Right.
Now if this year you don’t see any phenomenal MTM happening, then these yields will sustain. If tomorrow the equity markets go up by 50%, obviously, the revenues will also go up, but the yield will look lower.
Sanket Goda
Yeah, understood. Understood. Perfect. And lastly,, any color on PAG exit or sell? I think if you can tell us how — given there are a lot of articles in the paper that PAG is thinking to sell and whether it will be full block or partial and if it happens, how it will happen if any color on that could be useful.
Ashish Kumar Chauhan
I have also read the same news article, Sanket. If there is anything which is — which is — has to be reported, we will report to the exchange. There is no such development, which I am which has happened and I am also PV to the same articles which you are PV2. So we are actually at the same page right now.
Sanket Goda
Okay, okay. That’s useful. Thanks. Those are my questions.
Ashish Kumar Chauhan
Yeah.
Operator
Thank you. The next question comes from the line of Ashish Agarwal from Oakland Capital. Please go-ahead.
Ashish Agarwal
Yeah. Thank you, sir for giving me the opportunity. Sir, I had two questions basically. So overall, if I look at SNI wealth growth, that growth has been pretty good. But if I look at the client count essentially for HNI segment, that has not seen much growth. So what can we do essentially to get that growth number on the client count side? And also can we look at inorganic route? And our second question was, yeah.
Ashish Kumar Chauhan
Yeah. So I’m saying client count will be a function of RMs and how we add and how much they can manage. So I think we are pretty much happy with the current level of clients which we have if we are actually able to deeper mine the ones which we already have, we will be happier than just going out and acquiring. In terms of inorganic, one always keeps looking for an opportunity, but it has to be some addition — real addition, right? It can’t just be going and buying some other well-man firm because right now the valuations are through the roof.
So either it has to be some addition of some asset class expertise which they have, which we don’t have, which has to be a strategic fit. Otherwise for us, if you see — if you look at our overall business diversification, we pretty much have most of the components that are needed. So in order to add something in inorganic, there has to be something compelling available for us.
Ashish Agarwal
Okay. And just a follow-up on that is that does that apply to the — to our — basically to increase our global presence as well, like something looking at a collaboration or something like that.
Ashish Kumar Chauhan
So yes, that could — that is something which one can look at because if in global we get something where we can acquire and it speeds up our process and it is a strategic fit that we are always open to. In terms of collaboration, I think globally, there are extremely well evolved models which exist today. And if you study, there is a concept called external asset Manager, which is prevalent in both Singapore, Hong-Kong, Dubai where we as a firm can become an external asset manager to any of these large global private banks.
And then there is a revenue-sharing of 50% 60% with the share and their entire platform, including their lending book, research, product taxes, product people, investment experts, analysts, everything is opened up. So you’re not actually then tied to one firm because very frankly, if you get tied to one firm, then you may not be able to exploit the benefits which are available across the other platforms.
Ashish Agarwal
Okay. Thank you, sir. These are my questions. Thank you.
Operator
Thank you. Our next question comes from the line of Lalit Deo with Equirus Securities. Please go-ahead.
Lalit Deo
Yeah, hi, sir. Thank you for the opportunity. So just two questions. Firstly, on the lending book, sir, as you mentioned that we have reworked on the model and we have reworked on this segment. So just wanted to understand like how — like what would be the desired levels of the lending book, which we are looking to grow in this — for FY ’26 and FY ’25. And similarly on the yield side, so there we have seen that the NIMs have come under pressure in the loan book to around 5%. So what would be the steady-state for FY ’26 and ’24?
Ashish Kumar Chauhan
I think the steady-state for our wealth business would be anywhere between 5%, 5.5% and for our private business would be again between 4.5%, 5%. And in terms of the book growth, it should be in-line with the overall business growth. So in my view, we would want to look at least at the end-of-period book growth, maybe by let’s say, if our opening book is say INR5,000 crores and we want a 20% growth that is about INR1,000 crores at an average level. So by end of year, it should be — it should have grown by INR1,800 crores INR2,000 crores is what ideally we would want to target.
Lalit Deo
Sure, sir. And sir, just on the asset management side. So when we are — when we’re looking at a growth of around INR4,000 crores of net flows in public markets, around somewhere between INR7,000 crore to INR8,000 crores of net flows on the overall side for FY ’26. So in terms of cost-income ratio, so currently, we are at a level of 130%. So by when one should expect to achieve breakeven in this business?
Bharat Kalsi
I think at INR20,000 crores of assets, fee-paying, we will be breakeven. So if you look at the cost there, it’s about INR70 crores INR80 crores, right? And if you assume that the cost will grow by, say, hypothetically I’m saying 10%, 12%. So you’re looking at INR88 crore INR90 crores of cost in FY ’27 — sorry, FY ’26 ex of the credit funds. So I’m talking existing strategies. Now if you look at each of the individual components and their yields, so in my sense, if you are hitting a cost of say, 90, I think we would end-up at a revenue of anywhere between 85% 86 if you are able to achieve the net flow numbers which we are talking about.
And at that level, the gap is really minimal. And to be very frank, we also lowered the group allocated costs on that business. So maybe the — which obviously is lower compared to other businesses, excluding that, that business is breakeven. But including that, I think FY ’28 somewhere around the middle is when we should start seeing that business breakeven on a quarterly basis.
Lalit Deo
Sure. Okay. Thank you so much.
Bharat Kalsi
Sorry, FY ’27, not FY ’28 ’28. FY ’26 end and FY ’27 middle.
Operator
Thank you. Our next question comes from the line of Piyush Kumar from Global Consilient Research. Please go-ahead.
Piyush Kumar
Yeah. Hello, am I audible?
Operator
Yes, sir.
Piyush Kumar
Yeah. So sir, my question is regarding wealth management AUM. So sir, can you just shed some light out-of-the total wealth management AUM, how much we have run ARR AUM? How much is the ARL AUM of the total?
Bharat Kalsi
Of the total in Nuvama private, about 25%.
Piyush Kumar
Okay. And sir, my second question is regarding the investment banking activity in India. And how do you see the IPOs, STOs and all of these dividends over the next two years in India?
Bharat Kalsi
Two years, nobody can say. I can say at least for the next six months, we are seeing some action coming back, because I think what happened to the markets from September to March of the investors saw so much pain in their portfolios that they were not willing to commit fresh monies into the new supply that was coming in. I think that is somewhat adjusting now and slowly and steadily if the market sustains at this level.
And if they start putting in IPOs where they don’t see losses, in the next six months, you will see the action fully back. But two years, I don’t think anybody can actually predict on the IPO market is very difficult.
Piyush Kumar
Okay. And sir, my last question. So, sir, how do you see the AI industry growing in India across over the next one year?
Bharat Kalsi
At least by 30% 40%?
Piyush Kumar
Okay, sir. Thank you so much, sir. All the best.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Ashish Kumar Chauhan
Thank you. I think as usual, it was interesting interacting with you. We look-forward to seeing you all, I think two months from now when we do our Q1, thank you for coming again. All the best. Thank you.
Operator
Thank you. On behalf of Nuvama Wealth Management Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines