Nuvama Wealth Management Limited (NUVAMA) Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Nuvama Wealth Management Limited Q2 and H1 FY '27 Earnings Conference Call. This conference call may contain forward-looking statements about the company. which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of reperformance and involve risks and uncertainties that are difficult. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kehair, MD and CEO. Thank you, and over to Mr. Kehair.

Thank you, Nirav. Good afternoon, everyone, and thank you for joining us for Nuvama's Quarter 2 and H1 FY '27 Earnings Call. On behalf of all of us, I'd like to wish our shareholders, clients, all the analysts, investors, everybody are very, very happy Diwali. Joining me today, as usual, Bharat, our Group CFO, and SGA, our Investor Relations adviser. We'll quickly begin with an overview of the performance and key developments and then we can open the floor for the questions. Just to summarize, we delivered a reasonably good quarter of strong performance. Client assets now are about INR 5.5 lakh crores revenue was about INR 937 crores, operating PAT about INR 319 crores, with a yearly growth of 26% and ROE remained strong at about 29%. Special mention on both wealth management businesses now over the last 3 years, both these businesses have consistently compounded at more than 20% growth across all parameters. This quarter, I think the performance was not only well, but also a significant contribution came from our institutional businesses, particularly asset services and capital markets, which continue to scale well across different products and customer segments. I think our integrated approach, which we've always mentioned, spanning multiple businesses within the financial services, capital markets ecosystem across asset classes, client segments, gives us multiple growth engines and also reduces dependency on any single market product or revenue source. It's basically in a sense, like makes the business more resilient to any kind of adverse impact that may happen I think the second thing which we followed for the last couple of years, that also is playing out now. In Wealth, we particularly said that while many providers go and seek the equity managed assets of the clients, our view has been that asset class performance is are cyclical, specifically equities. And for the last 2, 2.5 years, we kept harping on the importance to the clients of allocating to other asset classes I think that has served us extremely well, which reflects in our strong net flows despite the markets not doing anything for almost last 2 years. And I think the second was a recognition that technology and what generative AI can deliver can actually be path breaking. Technology, of course, we always knew. But when the layer of generative AI came on top of it, basically opened up many new avenues, not only to improve client experience but also to improve efficiency within the firm. And I think this is also playing out reasonably well across all our businesses now. I'll move on to the business segment updates, now. We start with Nova Wealth. Managed Products and Investment Solutions, which is NPIS remains our core focus and growth engine. Client assets have now crossed about INR 46,000 crores and net flows were very, very strong. For the last 6 months, we've had more than INR 6,000 crores, and Q2 was about INR 3,300 crores. Revenue for Q2 may look slightly moderated. But if you look at some -- every quarter, out of the 7, the revenue growth was more than 25% Y-o-Y. So this quarter because last year, Q2 had a very, very strong transactional income opportunity with our real estate fund. So that basically has had a base effect. Otherwise, there is no structural change either in flows or yields for this. lending, we've now kept saying that this is -- this is an avenue which we will exploit for growth, and we've demonstrated this now over the last 12 months. Our loan book is in this business is about INR 6,000 crores, growing about 60% year-on-year. You know that the composition is all liquid assets like [indiscernible] so financing, margin financing or MPFs and ESOP being almost 75% of the portfolio. We also saw an uptick in this quarter with marginal improvement in NIM because we've always maintained that a part of our borrowing happens through MLD and some hedging gains and losses can lead to these changes in the NIM. And for Q2, we were on the positive side of the same. On sales capacity, we've added about 90 RMs over the last 1 year and continue to strengthen the franchise, the deliberate focus on senior talent. The outcomes are actually encouraging. You can see them in the net flows. And also, you can see them in the NPS scores, which have now reached an all-time high of 89% for us in this business. Lastly on the technology and AI front. As I said, we continue to embed this across different parts of the value chain. We rolled out a new AI-powered client profiling and meeting prep tool for RMs this quarter. And efficiencies for this are visible, like net new money and client assets per RM have increased by 25% to 30% year-on-year. And overall margins or cost income ratios have improved by about 200 basis points year-on-year. Now I move to Nuvama Private and starting with our strategic focus there, the ARR assets. The ARR assets have now crossed about INR 60,000 cores to INR 62,000 crores. Again, very strong momentum in net to money in Q2. We saw about INR 5,000 crores get added. Q1 was a bit moderated because we saw an outflow of an advisory asset which was no yielding. But if I take Q1 plus Q2 put together, we are about 11% to 12% of the opening balance, and our guidance has always been that we will be between 22% to 25%, which I think we are on track. AR now contributes about 64% of the revenue. On our initiatives to improve this even further, we spoke about Pinnacle as 1 of our UHNI offering, which brings together multiple things -- it basically brings advisory portfolio construction, government support, curated opportunities reporting in 1 single framework, and it's meant for our top clients. It basically improves the engagement of the bind significantly, which automatically leads to an increase in wallet share. I think we are seeing an impact of this now happening. We may, over the next 2, 3 quarters, start reporting to you specific impact. Moving on to lending. Here also, we had said that we'll leverage the lending book to improve news productivity and yield. Here, the book has grown by about 50% on an H1 basis, and NII also has grown by about 50% on basis. Yields remained stable. I think there is still a lot of available here to improve our lending book. On capacity here, we've added about 15 -- 14 to 15 RMs over the last 1 year or almost 10% of our base, and we will continue to remain deliberate and deliberate and measured in how we add RMs in the current environment. One thing we wanted to point out like we started reporting our ARR net flows from beyond Tier 1. Now about 40% of that is coming from beyond Tier 1 which is not a reflection that whether we are really present there physically, but it's a reflection of how we are leveraging our distribution to access even places where we are not present. Here on the AI front, we did a liquidity event module, which basically tracks all the IPOs and exists were promoters get money and the whole end-to-end chain of tracking allocation to RMs and trying to convert is now moved on a digital platform, which gives us a far better cockpit view of the whole value chain as it progresses. And here also, I see the impact on the productivity improvement in terms of ARR assets and revenues per RM have almost grown by about 15% to 20% year-on-year, and margins have improved by about 70 basis points across the board. On transaction banking income, you will have some questions as to why there is a dip for last quarter of year -- Q2 FY '26. Again, I said in Wealth, there's a large invest transaction, which we essentially did with our commercial real estate fund -- and that revenue had a high base effect. Otherwise, INR 80 crores to INR 90 crores per quarter looks like a regular run rate because about 60% to 70% of this income in any way recurring or reoccurring keeps happening again and again every month, it is a combination of brokerage and including brokerage and fixed income. The 20%, 30% is episodic. But we will see in both businesses, improvements in our transactional income or maybe even ARR as we launch our private credit and start building on it private credit fund, and as we launch a second commercial real estate fund because they will throw up to invest in syndication opportunities. I think is a good segue to move into asset management. Asset management -- starting with commercial real estate first, our previous fund is now about 50%, 55% committed another 2, 3 months, INR 0.70, we will reach. So it's time to now launch the second fund, which is going to get launched any time soon in maybe another 2 weeks or so. And the target is to raise about INR 5,000 crores there. Then private credit, the full team is intact now in place, and we will launch a private credit fund also in the next maybe 25, 30 days. And the target is to raise anywhere between -- this is the first fund we will see how the progress goes, but we will go somewhere between INR 1,500 crores to INR 2,000 crores or INR 2,500 crores. Again, over the next maybe 8, 10 months, we will want to raise that money. Private equity, we've been focused on returning the money on our previous funds. And as they reach closure, we are contemplating to launch for new funds and new strategy with a new name, sometime next year. So maybe in Q3 or Q4, we will give you further update around this. On public market, we are still on the transition phase, where we continue to lose money on our AIS because now this have become far more tax efficient. Our SIF approval has come, and that launch is also expected in the next 25, 30 days. So I think a lot of action in asset management in the next to with a large part of our product rollout bunching up together, and we shall see that activity playing for the next 2 to 3 quarters. Coming to Asset Services, exceptional growth revenues or about 50% year-on-year. Client assets have now crossed INR 1.6 lakh crores. We think for H1 remained healthy at [ 2.7 ]. We mentioned in the last quarter that there were some clients which had very high cash collateral composition and that have now normalized. So Q2, you will see yields are moderated to about 2.5. But I think if I take a full year perspective, we will be anywhere between 2.6 to 2.7, 2.8 range because Q3, Q4, again, new client addition is going to happen, and we have visibility of about INR 2,000 crores of cash assets coming in. So I think that will, again, give a bump up in it. But it will remain in this zone. There is no structural change in anything. Domestic business, again, continues to benefit with the large number of people setting up either PMS or EIS, and the trend is just increasing and we continue to gain a lot of market share there. I think 20% growth is what we expect from this business. I don't see right now any structural changes to that aspiration. Capital Markets, I think last quarter was slightly I mean comes in terms of secondary and primary markets to behave very differently. -- in secondary market, there was impact of production of cash, which had impacted derivative volumes and income related to derivative volume. But even the cash volume was down by about 12% Q-o-Q. But primary market picked up we track IPOs above INR 400 crores from 4 to 38 IPOs. Q1 had about 4 IPOs and Q2 are about 28 IPOs. So there's a massive job. We were also able to participate effectively. Fixed income, we mentioned in Q1 that we had, had an extremely good quarter because of multiple things that had happened in Q1 where FPIs first went out, then they came in and we were able to leverage both the sides. And we said that there was about INR 20 crores, INR 25 crores of extra income, which we delivered in Q1, which may not get replicated. So, therefore, saw a minor dip in that sense and now is more normalized in terms of performance. Overall, diversified capital markets remain strong because we have a foot in each of the pieces. And even from a pipeline per on investment banking, we have right now about 40 transactions in the pipeline, about 13 ECM and over 10 in advisory with a reasonably high 2-digit or early 3-digit revenue target on that. So overall, it looks reasonably rose for the remaining part of the year. I think with this, I come to the end of the overview, I'll hand over to Bharat, who can take you through the specific numbers, and then we can open the floor for questions. Over to you, Bharat.

Yes. Thank you, Ashish, and good afternoon, everyone, and warm welcome to all the participants on the call. Before I start on the numbers, a very happy Diwali to everybody. Ashish has already covered the headline number. So this quarter has been a very good and steady quarter for us. Our revenue for the quarter was around INR 937 crores, which is a 21% Y-o-Y growth and our H1 revenue has also grown on 20% to INR 1,850 crores or so. The quarter 2 profit also was exceptionally a very decent growth of 26% on the operator side with INR 319 crores of PAT. This was coming from all the businesses. So it was not very concentrated. Obviously, asset services at times gives you the higher profits, but it is from wealth and private as well. If you look at the presentation, you would have noticed that is a onetime exceptional charge of around INR 16 crores, I want to call it out upfront. This is really a onetime charge wherein we actually closed -- preclose our venture debt fund which we launched sometime in FY '23. This fund was with a 7 year of tenure. But the underlying strategy for the fund was to actually deploy in combination of debt as well as equity warrants. And as you know that over the last few years, the group stage companies has got a lot of multiple ways to have a fund raise, which is non dilutive in terms of equities like a private credit. So the underlying strategy of the fund is actually not generating the expected return as we thought and mainly because of the equity warrants market is not up to the mark as we thought initially. So what we have decided is that we will actually pre-close this fund, and we will return -- start returning the money to the investors. That will lead to a onetime charge of around post tax of around INR 16 crores, and this will also lead to accelerated amount on the called in capital, which is in the NML business. So that will be another INR 9 crores to INR 10 crores, but that will come over the next 12 months or so. So there is a really onetime charge of around INR 16 crores post tax on the overall basis because of this. Having said that, otherwise, if you look at our overall client asset that has grown to INR 5.5 lakh crore, which is a 25% growth. And within the wealth management, our assets are now at INR 3.7 lakh crore and as Ashish as also alluded to the fact that NPS and Air asset is growing much faster than what is our overall growth. It has grown to INR 1.1 lakh crores at a 27% growth. Net new money, the numbers that we discuss is that Nuvama where it is INR 3,300 crores and on the private side it is INR 5,000 crores for Q2, but this is the highest ever also for the -- both the businesses and we are on full track in terms of the guidance which we gave that we should be growing anything around 20%, 25% on our focus assets. Asset Management, we again deliberated Ashish covered a lot of things in terms of various strategy which we are launching. Currently, the assets under management is around INR 12,000 crores. Asset Services at INR 1.63 lakh crores with a very strong growth, if you compare it to the Q2 of FY '26. Coming back to the revenues. Happy to share that wealth business, when I say wealth business wealth plus private business has actually crossed the INR 500 crore quarterly revenue mark. This is a growth of around 14%. We -- Ashish also mentioned about the transaction revenue, which was there in Q2 FY '26. But otherwise, crossing a INR 500 crore mark is good achievement. On the Asset Services side, the growth is around 53% Y-o-Y and at INR 245 crores. It's mainly because of the lower base in the quarter 2 FY '26. Capital market also grew by 9% to INR 175 crores wherein the institute equities grew both Y-o-Y as well as on a quarter-on-quarter basis. This is despite the fact that we had a cash effect in the month of August and September, which is expected to be over -- it's kind of now over. But despite of that, the quarter has actually grown. Investment Banking, it was like ECM was low in quarter 1, which has picked up in quarter 2 because of the primary market activity. and our fixed income continues to strongly grow over the quarter-on-quarter on a year-on-year basis. Coming to the cost point, our cost for the quarter was around INR 507 crores, which is a growth of 16%. Within that, if you look at that, our employee cost has grown actually by 19% to INR 382 crores. See if you look at over the last 12 months, we have also added a 7% capacity or give and take, 250-odd employs in the company. 85%, 90% of the people will be in the business facing units, whether it is RMs or the investment people and all. So that is the reason 1 where the cost has gone up to 19%. And obviously, there is an annual increment which has happened and the variable cost, which is linked to the business permits that is leading to a 19% growth on the employee cost. Our employee cost for quarter 2 also includes our new car scheme, which we have actually granted sometime in the first week of September. The cost of that ESA charge is around INR 6 crores. I'm talking all numbers as pretax. So INR 6 crores is the OpEx charge because of that employee cost that for the full year of FY '27 will come to around INR 45 crores or INR 20 crore is a quarter charge. This INR 20 crore piece of 4 quarter charge will be there for next 4 quarters and from there onwards, it started tapering down. And this is as per the accounting standard. So this is how this has to be accounted for. That's a INR 20 crore charge for next 4 quarters after that it will drop. Similarly, if you look at our operating expenses, there's hardly any increase, it is 9% on a Y-o-Y basis. Typically, this much expense will always increase, 2/3 of will be on account of our inflation link charges and 1/3 will be towards the, say, new investments wherever we want to focus on our business. So that's where the OpEx has grown by 9%. So full BAU OpEx should be around give and take INR 520 crores and INR 530 crores against our last year number of INR 464 crores. As we mentioned in the last call also, we have actually finalized our new HO in the BKC. This will be -- we'll start our rent-free period will start from November. That typically, again, as per the accounting standard, you will have to do a ROU, right-of-use accounting for that, and that will lead to around INR 25 crores of charge for this year FY -- so if I add our BAU expense as well as the new HO expense, we may close the year at anything around INR 550 crores of an OpEx for the year. This is where the OpEx growth is expected to be on a full year basis. Profit, which is at INR 319 crore operating profit, a strong 26% growth. Wealth Management also grew 22% to INR 184 crores. But again, a number to look at is that our Nuvama Wealth, which is our S&I segment has actually crossed the PBT mark of INR 100 crores in quarter 2. This is the first time they have actually crossed the INR 100 crore mark. Otherwise, our asset services and capital market has actually shown a growth of around 34% year-on-year basis. One other thing which we would like to update to the investors and the community is that the Board has decided actually not to declare any H1 FY '27 dividend. So there are a few reasons. So if you look at that, our loan book, as Ashish was also mentioning that it's actually gone up by INR 2,000 crores in the first 6 months of this year. And we are already at debt-to-equity gearing of around 2.9%. So see, basically, the idea is that we will be more comfortable if our debt to equity is around 2.5%, plus/minus a few basis points here and there, but 2.5% is where I we want to plus the way we are looking opportunities both on the lending side as well on the syndication opportunities or asset management where we have to actually make investments be deliberated internally and decided not to declare dividend for H1. However, we'll continue to look at this dividend policy as part of our annual results, which will happen obviously sometime in April '27 with that -- and 1 more thing within the dividend in due our ROE is also at around 29%. So we can actually look back to how we utilize our capital, how much we retain, how much we actually declare and how much we put it back to the business. I think those are detailed alive will also happen in the -- in the yearly results, and that's why when we decide on the final dividend declaration. That's where we are. Nothing else my side. Now I request some moderator to take over and initiate the Q&A session.

[Operator Instructions] First question is from the line of Prayesh Jain from Motilal Oswal.

Firstly, you're very happy Diwali to all the team. And I'm asking good sort of numbers. But thanks for the estimation on the cost on the overall front. But if you look at the cost to income on the wealth management side, we have seen quite a bit of improvement. Now rather than talking about the cost to income, the absolute cost run rate in both private and well, is this -- have we reached a sustainable rate in terms of RM additions and everything. And similarly, if I even talk about the asset management, where we are building teams on SIS and everything, there to the cost has absolute cost has come down from 1Q to 2Q. So how do you think about the cost on each of these segments and cost to income the way we think about these 3 segments?

So Wealth and private, Prayesh, in terms of, I think we've reached a steady state, like you said, where we know that we are going to hire a certain set of people -- and obviously, there will be some attrition. But on a net-net basis, like we keep saying that we want to improve by 100 basis points. So I think in both the businesses this year over last year, we would see an improvement anywhere between 100 to 200 basis points. And that journey should continue for the next couple of years, at least. Asset Management is a different story altogether. Because 1 of the segments, which is our public market is actually was on a path of profitability and was -- had started making money. But with this change of regulation, which brought in SIF it became a bit of a detour where we had -- we have to bring SIF. We have to see where the flows will go. And to get an SIF to build a MF, which requires a separate infrastructure, separate everything -- pretty much everything separate is needed. So that additional layer of cost came in. But we had no choice because we have INR 5,000 crores of assets there. which was revenues for both Wealth Management and Asset Management. So we did that. And therefore, you see an elevation of cost happening there. And secondly, we built the whole private credit team where revenues have not started coming in. So I think in Asset Management, the real cost income reflection may start appearing after 12 to 15 months from now when these expenses, which we have incurred are actually put to use and money comes in and we start earning on them. Right now, I think it's too premature to talk about that. But yes, of course, after Q4, when the fund raise in each of these is happening. And as and when that goes up, you will see gradually the cost income will start improving.

Prayesh, do you have any follow-up questions?

Yes, yes. So in the asset management, you mentioned about private credit fund launch, which categories will be performing credit, special situations, IG credit, what kind of fund that we are launching?

Performing between performing and special situations or not IG and not full special situation, which is 20 plus. This will be like 15% to 18%, 15% to 17%, that range.

Got that. And last question on the clearing custody business. what's the mix between the foreign money and domestic in terms of assets or revenue, whichever you can like it for us?

Broadly, it ranges in some quarters, it will be 25%, 75% in some quarters, it will be 20%, 80%, but the range is -- I mean if you take on a full year basis, it's normally between 25 domestic and 75 SPI.

Next question is from Lalit Deo from Equirus Securities.

So the 2 questions. Firstly, on the AMC business. So to understand the loss which we have recognized in this quarter as a onetime loss -- so is it more call that we would -- that we had -- we had signed some returns to the investors and probably because -- because the strategy was not able to give those returns. So that is why we are incurring with this or is it -- or is it more of an operational losses that we are incurring. They are in this -- and so can on the clearing business, like as you mentioned, sir, like that in the -- for this year, the yields are likely to be in the range of around 2.7% -- 2.6% to 2.8%. So how should we look at the retention for the next a couple of years?

So we -- first, on the asset management side, it's not any committed return related loss to investors. Basically, this fund was launched in an era where AIFs could pay upfront distribution cost. So that upfront distribution cost because your rewinding the fund, the unamortized .So let's say, we raised the fund of INR 1,000 crores, out of which we called for only INR 300 crores. So that balance INR 700 crores related distribution costs we have to fast forward the amount and write it off, right? So that is what happened in the INR 16 crores. And what but mentioned that There'll be accelerated amortization of remaining, which is for the INR 300 crores over the next 12 months as we give money back from the previous deals, that INR 8 crores, INR 10 crores will also get amortized. So it's basically unamortized distribution cost. And not to do with the client returns in any manner. On clearing assets, I think it's a function of 2 things. One, it's a function of the split between cash collateral and GSEC collateral. If the cash collateral and GSEC collateral, which right now for us over around 38% to 40% is cash and rest is decent. And if the yields on the deposits remain at the place where we are with, let's say, plus/minus 50 basis points, then your yield should be between 2.5% to 2.8%. Even for the next 2 years in a scenario where some FPI becomes very, very large, then these ratios of cash to GSEC collateral breaks down because when they become very large, they want higher GSEC, lower cash. Yield will fall, but your absolute income will still grow. So I think it's not relevant right now to focus that much because right now, if you project increase in collateral, which is more in line with reasonable numbers of, say, 15%, 20%, 25%, then you can assume that the yields differ. If, let's say, the collateral doubles from here, then the yields will fall because those ratios of GSEC and Cash changes. So I think for your purpose, you can assume that yield will remain between 2.5% to 2.8% for next 2 years.

[Operator Instructions] Next question is from the line of Manas Agrawal from Sanford C.Bernstein.

Just want to understand a couple of things. I think the under liability was settled in our favor. So I assume there was some surplus capital in the clearing entity that was being carried forward. Is that now going to be released at a subsequent date or that gets consumed in the lending business? That is question number one. Question number two, if I just look at your asset services sits on the custody on a Q-o-Q basis, I see, I think, a 12% increase. Now Q2 was the cat quarter where we saw a lot of hesitation from writers -- so did you increase margin requirements or this was just organic growth in assets under custody. That is question number two.

So related excess capital, Manas was not very high because we had placed a specific bank guarantee and bank guarantee requires only 25% cash. So let's say, we had to place about INR 500 crores of bank guarantee which was essentially earmarked for Anugraha with the clearing corporation that required only INR 125 crores, INR 130 crores of cash. So that will get used in the business, either in the clearing business for newer clients or in other businesses. It will not create a situation of excess capital in that sense because we had not used cash in the first page. On the increase of the collateral, I think the impact of cash was actually not felt in the clearing business at all. So this was largely organic because the clients change their strategy and they did different stuff. And for us, actually, we did not see any impact on any client in terms of reduction, and we did not increase the margin, of course the margin levels were the same. So I think it was not led by margin increase.

Next question is from Sanketh Godha from Avendus Spark.

As you said that your 25% of asset clearing business largely comes from domestic guys. And you are aware about the fact that incrementally new domestic custody licenses are given -- so just wanted to understand from your perspective, how do you see risk to domestic business? Eventually, if these guys also get foreign licenses maybe a couple of years, then how do you see this risk? Many clients will not move, but whether there will be a fair probability that your ability to demand for more cash collateral will come down, and therefore, even this asset clearing business potentially could be under pressure going ahead. So that's my first question. And second question, just wanted to a qualitative point, just to understand from private wealth management or the ultra-HNI wealth management business point of view. -- your attrition, if you can give a bit of color there? And if there are any meaningful then any immediate slowdown in flows or growth potentially can happen in near term until you need to get revising?

So on the first one, Sanketh, actually very difficult for anybody to comment because how -- what value proposition will the competing players bring plus most of the new license holders happened to be either in -- happen to be strong asset managers themselves. And that will lead to any kind of resistance from newer guys to open. That is point number two. Point number three, I think this business never had of competition. I mean even if you look at it today, there are about 18 to 19 competitors, which exist, and these are not -- these are not trivial names. These are names which are formidable. These are names which are very, very strong in terms of brand, in terms of their ability to give technology in terms of their ability to leverage their balance sheet and provide access to capital to these entities. So I think it's a fair field. We will have to continue to up our game if you want to maintain market share, competition is always good because it brings improvement across the board in the product quality. We feel we are reasonably ahead in the race in terms of the value proposition we deliver because otherwise, for us to command this kind of market share in such a hypercompetitive industry would not have been possible. But having said that, I mean, we'll have to wait and watch as to what others bring to the table and how we counter that. On Private Wealth Management, attrition remains normal. There was 1 team movement that happened, but we were able to add about 75%, 80% of that and we looked at the numbers on a quarter-on-quarter basis, we will actually end up with higher number of RMs on the basis previous quarter. So not that much of a dent. Either -- we don't foresee that in revenue flows on a number of...

Understood. And Ashish to quantitative view our market share in clearing in domestic and FIIs just to refresh or rather to tell you a new number, it would be useful.

See in domestic, if we basically track PMS and AIF as a segment on a book basis, on a full book basis on PMS I think we are around 6% to 7%. And on AIF, we would be order of magnitude, maybe around 8%, 9% of the total book. of the new registrations that happen every year, we -- this is not of the AUM. This is about the new players to get added every year. We are able to capture 25% of those new additions as our clients. Now how much each of them will grow is a function of their product, their performance and how they deliver -- but of the new inflow, we are able to capture about 25%. FPI, very difficult to give any market share because maybe next time around, we can come back to the numbers because we play in a very, very specific zone of HFT and systematic can funds, whereas the bulge bracket AUM sits in long only where we are not a player.

Next question is from the line of [ Dipanjan Ghosh ] from Goldman Sachs.

Few questions from my side. First, on the wealth business has obviously had been very strong in Nuvama private. Just wanted to understand how much of that will be led by relation events, just specifically for the quarter. And how much would be from your -- organically from our existing [indiscernible]. So that's the first question. Second, if I look at your look at your overall yields in Nuvama Private, ex of the loans piece. It seems that there has been some improvement. So was there any upfront IA-related fee booking or fixed income transactions on that part. Can you give some color? And the third piece on the wealth business is on both the businesses, private plus well put together, if you can quantify the insurance-led revenues for FY '26, what would be the proportion that would be useful. So these are on the wealth businesses. I have 1 question on the other business, which I maybe can ask later.

So let's go 1 by one. So we will start with insurance spend that's easiest. In private insurance is in wealth, insurance would be about 12%, 13% of the revenue. That was first. In private, when we spoke about the keys and you said there's a yield improvement. So it would be largely because the proportion of category to AIF may have gone higher. And that is the only thing that changes the yield apart from lending, but since you're looking at ex lending, that is the fixed income part gets booked in the transactional income, so it doesn't sit in ARR. And the third 1 is the monetization impact on net new money. I don't know the numbers for the quarter, but if I look at it for the last 15 months, about 35% to 38% of our net new money came from monetization plans. And balance 60 would be from non-monetization, which could be a mix of existing and new clients, both.

Got it, Ashish, just 1 small question on your overall capital markets business and especially more towards the ECM part. You gave some color in your commentary. But any quantification of on a steady-state run rate in terms of new mandates or new deals, what's your hit rate or amongst the broader industry -- from a revenue perspective? And how has that been tracking, let's say, for the past few quarters or years?

I think, frankly, on the ECM side, we -- there is a scope for us to improve. In terms of the total number transactions, we would range between 15% to 18% participation share. So let's say, out of every 100, we would be there in 18 to 20 mandates. We are not so strong in blocks and maybe slightly better in QIP and even better in IPO. So that would be the range, and we are right now actively working on improving our market share on blocks. So that will be an upside, which we'll see in terms of the pipeline on which we are sitting right now, as I said, we have about 30 bandits on ECN side and about 9% on advisory, which can total on a probability adjusted revenue of between INR 85 crores to INR 90 crores.

Got it. And on the Asset Servicing business, I think in your presentation I read somewhere that you intend to offer more services in the ecosystem and probably brings back to the...

Trustee and RTA for AIF and PMS and trustee services both should go live, at least RTA will relive with minimum value proposition by end of November or December and full blown by March. And trustee also between Q3 and Q4 will go live.

[Operator Instructions] Next question is from the line of Sanidhya from Unicorn assets.

So on the asset services in the capital markets. So if you see quarter-on-quarter, we see marginally flat to lower revenues on to stream. So if you could highlight the impact of CAS versus the normal organic growth that we were seeing in the client on the fixed income products and others. That would be helpful.

Yes. So capital markets, if you see, there were 3 vectors, which we are playing. In Q1, we had an exceptional quarter in the fixed income side. And we had said that there is about INR 20 crores to INR 25 crores of extra revenue in our assessment as compared to the BAU run rate, and that has played out. The fixed income between the 2 quarters fell by that point, and now we are at a steady state basis. ECM was opposed. ECM Q1 was fully dry. There were only 4 IPOs in our target market segment across the market and that increased to 40 IPOs or 38% to be precise. And there, we were able to capture a large number of deals. Obviously, revenues of some of those deals will come in Q3 also. So not everything could have been monetized, but there was more than 2.5, 2.6x between quarter 1 and quarter 2 on ECM. Institutional equity on the other hand, again, divergent, we saw deal-related revenues going up because of the ACM share. But CAS had an impact of at least INR 2 crores to INR 3 crores per month, which I think from December after the old model comes in, it will get reversed. So I think these 3 vectors basically led to that combined number, which you are seeing.

So cash impact will be largely on the asset services, right?