Ashish Kehair, Managing Director and CEO of Nuvama Wealth Management, which listed on bourses on September 26, expects the wealth management industry to see robust growth in the next 10 years. In an interaction with Business Today, Kehair said industry penetration level stands at 11-12 per cent at present and has significant room for growth, especially when compared to countries like the US with penetration rates exceeding 60-70 per cent and China at nearly 30 per cent.
“The overall growth would bring around a huge tailwind for the entire industry. While challenges such as margin compression may arise as the industry continues to grow in leaps and bounds, regulatory intervention becomes pivotal to maintain its robustness,” he said.
Sharing his views on the growth of Nuvama, Kehair added that the significant expansion of the industry will serve as a favourable opportunity for the growth of Nuvama. As the company continues to grow at a CAGR of 36 per cent, he also shared insights into their plans and vision for the future. Nuvama, which recently demerged from Edelweiss, clocked an operating profit after tax of Rs 368 crore during FY 2023.
The group currently manages Rs 2.5 lakh crore of client assets, servicing over 10 lakh affluent individuals and HNIs and around 3,000 of India’s wealthiest families as of Q1 FY24.
Nuvama Group offers an integrated wealth management platform providing wealth management, asset management, capital markets and advisory services.
Going ahead, the company plans to add 1,000 more relationship managers as a part of its business expansion strategy in the next 3-4 years. Nuvama Wealth is currently located in 69 cities and aspires to expand its geographic reach to 4 times by 2028, with a focus on penetrating deeper into tier 2 and tier 3 cities, according to Kehair.
“The company is eyeing an offshore expansion in locations where there is a growing need for bespoke wealth management services like Singapore, APAC and Middle East,” Kehair said. He also hinted at the possibility of entering the mutual fund business, albeit with a unique and differentiated approach, possibly involving Exchange Traded Funds (ETFs) or passive investment strategies with minimal physical distribution.
According to him, Nuvama’s success is deeply rooted in the fact that equities and fixed income provide numerous access points, whereas the landscape of alternatives in India remains underpenetrated and less developed as compared to more mature Western markets. Consequently, their focus leans towards leveraging in-house expertise in the manufacturing aspect of alternatives.
Kehair also expressed optimism about the Indian economy but noted that small and midcap sectors had experienced rapid valuation increases, while large-cap stocks, particularly in the financial services sector, appeared attractive.
Regarding real estate, he highlighted the momentum in the residential sector, driven by factors like lower interest rates and narrowing rental or mortgage gaps. However, he cautioned against expecting significant returns in residential real estate as an investment opportunity, favouring real estate stocks and commercial real estate instead.