Nuvama Wealth Q2 FY27 Earnings Call: Record Net New Money Across Wealth Arms, H1 Dividend Withheld

Broad-Based Growth Across All Engines

• Revenue Rs.937 crore (+21% YoY) — H1 FY 2026-2027 revenue ~Rs.1,850 crore (+~20%); operating PAT Rs.319 crore (+26% YoY); management stressed growth was broad-based, not concentrated in asset services.
• Client assets Rs.5.5 lakh crore (+25%) — wealth management assets Rs.3.7 lakh crore; NPS + ARR assets Rs.1.1 lakh crore (+27%); asset management AUM Rs.12,000 crore; asset services assets Rs.1.63 lakh crore.
• Record net new money — Q2 FY 2026-2027 NNM of Rs.3,300 crore (Nuvama Wealth) and Rs.5,000 crore (Nuvama Private), the highest ever for both businesses; management on track for FY 2026-2027 guidance of 20-25% growth in focus assets.
• Revenue by business — wealth + private crossed Rs.500 crore quarterly revenue (+14% YoY); asset services Rs.245 crore (+53% YoY, mainly a low Q2 FY 2025-2026 base); capital markets Rs.175 crore (+9%).
• Rs.16 crore post-tax exceptional charge — pre-closing of the venture debt fund launched in FY 2022-2023 (7-year tenure); per CEO Ashish Kehair, it is a write-off of unamortized upfront distribution cost after the fund was pre-wound, not related to committed returns; Rs.9-10 crore of accelerated called-in capital in NAML over the next 12 months (H2 FY 2026-2027 onwards).
• Both wealth businesses compounded >20% — across parameters over the last three years (through Q2 FY 2026-2027); management attributed resilient flows to non-equity asset allocation push and embedding technology/generative AI across businesses.

Record Flows, Lending Momentum, Productivity Gains

• Nuvama Wealth (MPIS) client assets crossed ~Rs.46,000 crore — net flows >Rs.6,000 crore in H1 FY 2026-2027 (~Rs.3,300 crore in Q2); Q2 revenue moderated only on a high Q2 FY 2025-2026 base (real estate fund transactional income); revenue grew >25% YoY in each of the last 7-8 quarters with no structural change in flows or yields.
• Wealth lending book ~Rs.6,000 crore, +60% YoY — LAS + ESOP financing ~75% of the book; marginal NIM uptick in Q2 FY 2026-2027 from positive hedging on MLD borrowings; ~90 RMs added over trailing 12 months; NPS at all-time high of 89; cost-income ratio improved ~200 bps YoY.
• Nuvama Private (ARR) assets crossed ~Rs.60,000-62,000 crore — H1 FY 2026-2027 net new money at 11-12% of opening balance vs full-year FY 2026-2027 guidance of 22-25% — on track; ARR now ~64% of revenue, expected to range between 60-65% (period unspecified).
• Private lending book and NII each grew ~50% on an H1 basis — 14-15 RMs added over the last year (~10% of base); ~40% of ARR net flows sourced from beyond tier-1 cities via distribution leverage; ARR assets and revenue per RM +15-20% YoY with margins up ~70 bps.
• Monetization mix — over the trailing 15 months through Q2 FY 2026-2027, ~35-38% of Nuvama Private net new money came from monetization clients, balance ~60% non-monetization; management did not quantify the split for Q2 specifically.
• One team movement in private wealth — ~75-80% of the impacted business arrested; management expects Q2 FY 2026-2027 to close with a higher RM count QoQ and does not foresee a dent in revenue flows or RM numbers.

Custody Strength vs Cash-Volume Headwinds

• Asset services revenue +~50% YoY — client assets crossed Rs.1.6 lakh crore (+12% QoQ, attributed to organic growth, not higher margin requirements); H1 FY 2026-2027 retention healthy at 2.7; Q2 yield moderated to ~2.5 as high cash-collateral new clients normalized; FY 2026-2027 yield expected at 2.6-2.8.
• Clearing yield outlook — with collateral mix at 38-40% cash (rest G-Sec) and deposit yields within ±50 bps, management expects clearing yields of 2.5-2.8% over the next two years (FY 2027-2028 onward); if an FPI becomes very large, the cash-to-G-Sec mix breaks down and yields would compress, though absolute income would still grow.
• Cash introduction hit institutional equities — cash volumes down ~12% QoQ in Q2 FY 2026-2027, a Rs.2-3 crore per month impact management expects to reverse from December (Q3 FY 2026-2027); asset services had no impact from the cash quarter.
• Primary markets surged — IPOs >Rs.400 crore jumped from ~4 in Q1 FY 2026-2027 to ~38 in Q2; ECM revenue jumped more than 2.5-2.6x QoQ with some deal revenues still to be monetized in Q3 FY 2026-2027; Nuvama's ECM participation share ~15-18% of transactions, weakest in block deals, strongest in IPOs.
• Capital markets pipeline — ~40 transactions (~13 ECM, ~10 advisory) with a reasonably high two-digit to early three-digit (Rs. crore) revenue target for remaining FY 2026-2027; separately, ~30 ECM and ~9 advisory mandates with probability-adjusted revenue potential of Rs.85-90 crore (period unspecified).
• Competitive risk from new custody licenses — CEO Ashish Kehair said the segment already fields 18-19 formidable competitors and Nuvama will need to "continue to up our game"; management expects more licensees over the next 2 years if SEBI is liberal in granting them; no view offered on yield pressure.
• Custody JV (49%-owned) — management is committed to acquiring the remaining 51%/merging the entity as the new license regime changes, subject to both companies' board approvals and ongoing discussions with regulators; current licenses do not cover the FPI business, which management understands will take at least 2-3 years more.

Deliberate Build-Out, Revenues Lagging Costs

• CRE Fund I ~50-55% committed — expected to reach ~70% within 2-3 months (~Q4 FY 2026-2027); second CRE fund launching in ~2 weeks (Q3 FY 2026-2027) targeting ~Rs.5,000 crore (raise period unspecified).
• Private credit fund launching in 25-30 days (Q3 FY 2026-2027) — targeting Rs.1,500-2,500 crore over the next 8-10 months (through ~Q2 FY 2027-2028); positioned between performing credit and special situations, in the 15-17 to 15-18 range (fund launch period unspecified).
• AMC cost elevation is a deliberate build-out — a regulatory change introducing SIF forced a "detour" requiring separate MF infrastructure; CEO Ashish Kehair cited Rs.5,000 crore of assets (Q2 FY 2026-2027) earning revenues for both wealth management and asset management as the rationale.
• Cost-income reflection delayed — management indicated asset management's real cost-income reflection may only start appearing after 12-15 months from the call (i.e., during FY 2027-2028), with gradual improvement as fundraises occur after Q4 FY 2026-2027.
• Public markets AIFs continue to lose money — SIPs have become more tax-efficient; SIP approval received with launch expected within 25-30 days (Q3 FY 2026-2027); a new PE fund and strategy is contemplated for FY 2027-2028, with a further update expected in Q3 or Q4 FY 2026-2027.
• Asset servicing rollout — RTA services for AIFs/PMS to go live with minimum value proposition by end-November/December (Q3 FY 2026-2027) and full-blown by March (Q4 FY 2026-2027); trustee services to go live between Q3 and Q4 FY 2026-2027.

OpEx Guidance, Leverage Ceiling, Dividend Withheld

• Total cost Rs.507 crore (+16% YoY) — employee cost Rs.382 crore (+19%) on ~250 hires (~7% capacity) added in the 12 months to Q2 FY 2026-2027 (85-90% client-facing); ESAR scheme granted September 2026 adds ~Rs.45 crore for full FY 2026-2027 (~Rs.20 crore/quarter through Q2 FY 2027-2028 before tapering).
• FY 2026-2027 OpEx guidance — BAU OpEx guided at ~Rs.520-530 crore vs Rs.464 crore in FY 2025-2026; new BKC head office (rent-free from November 2026) adds ~Rs.25 crore right-of-use charge in FY 2026-2027; total FY 2026-2027 OpEx expected at ~Rs.550 crore.
• Cost-to-income improvement of 100-200 bps in FY 2026-2027 — Group CFO guided the improvement journey to continue for at least the next couple of years (FY 2027-2028 and FY 2028-2029).
• Board decided not to declare an H1 FY 2026-2027 dividend — with ROE at ~29% (Q2 FY 2026-2027), management views pay-dividend-then-raise-via-QIP as suboptimal; the current 40-60% payout could be reduced to a minimal level; dividend policy and capital utilization to be reviewed with annual results in April 2027.
• Debt-equity at ~2.9x (Q2 FY 2026-2027) — management comfort at ~2.5x (timeline unspecified); peers Motilal Oswal and 360 One operate at ~1.5x; rating agencies and banks are comfortable below 3x and very comfortable around 2.5x for an NBFC of Nuvama's type.
• Hypothetical capital math (explicitly nothing discussed with the board) — at Rs.1,200-1,300 crore annual profit and Rs.200 crore dividend (period unspecified), retained Rs.1,000 crore at 2.5x D/E could add ~Rs.3,000 crore of debt, enabling ~Rs.4,000 crore of book expansion (~40% growth on the current ~Rs.9,000-10,000 crore book, Q2 FY 2026-2027); management believes internal accruals appear sufficient and it may not need to access capital markets.
• PAG stake sale: no update — the process is being run by the shareholders; the company will immediately disclose if anything meaningful happens.

Early Commodity Ramp, Watch Items Ahead

• 4-5 asset services clients have started commodity engagement — early client feedback is keen, with some ramping up margins; management sizes the commodity opportunity at 7-8% of the equities/equity derivatives opportunity (assessment as of the Q2 FY 2026-2027 call).
• Steady-state commodity activity may take another 2-3 quarters — i.e., around Q1-Q2 FY 2027-2028; CEO Ashish Kehair attributed the slower ramp to "prioritization and sequencing," not exchange infrastructure restrictions; a detailed update expected by the next quarterly call (Q3 FY 2026-2027).
• Transaction banking run rate ~Rs.80-90 crore per quarter (FY 2026-2027) — 60-70% recurring, 20-30% episodic; Q2 dip vs Q2 FY 2025-2026 was a base effect from a large co-invest transaction with the commercial real estate fund.
• Fixed income normalized — Q1 FY 2026-2027 included ~Rs.20-25 crore of extra income from the FPI out-then-in move, which may not replicate; FIM saw a minor dip in Q2 and is now normalized.
• Domestic asset clearing share — ~6-7% of the PMS book and ~8-9% of the AIF book (Q2 FY 2026-2027); Nuvama captures ~25% of new PMS/AIF registrations added each year; FPI market share not quantified — Nuvama operates only in the HFT/systematic quant niche and may come back with numbers at the next update.
• Insurance revenue mix — for FY26, insurance contributes zero revenue in Nuvama Private and ~12-13% of revenue in the Wealth business.