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Questions across 4 calls

Feroze Azeez

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Anand Rathi Wealth Limited

Anand Rathi Wealth Limited CC-Jul26.pdf · 2026-07-10
Didn't get your second question, Shubhi, if you can repeat that for me.
Correctly, so first question is what's the update on the Platinum clients. I think Platinum clients would be about 230 now approximately from 211. And since this is a segment which we have launched just about two and a half years back, when we actually launched this segment, we had about 40-45 clients only. So, if you ask me whether we will get to that 400- 500 number sooner than later, of course. The second question automatically is the next question of the first question or the subset to the first question; how many people upgrade? INR5 to INR50 crores is a large segment. So, we are now also trying to segment our clients into Gold and Platinum. These will be the only two segments we wish currently to have. So, I think the upgrade rates would be something like a few a quarter, 10%-15%-20% a quarter, that would be my guess. Because we generally believe in not going to people -- quite a few wealth management outfits figure out who's got into money by a transaction, large real estate transactions or large private equity transactions . I f people come into money a few hundred crores, most wealth management outfits reach there and try and get a share out of that. We believe in growing our clients internally. So, I think there will be a hockey stick kind of a count increase, like in the last two years it went up from 45-50 to 230. So, I wouldn't be surprised that you would see it in four digits in a few years.
Anand Rathi Wealth Limited CC-Oct25.pdf · 2025-10-14
See, firstly, RM attrition in our company is reasonably low. Like I had told you last time around on the call, I don't know whether you were there, we had some cultural issues with a few people in some of the locations. So, we had to let go of two and the other two left themselves. So these four attrition pieces, which you see in this H1 are largely from one location. That's point one. And point two, when an RM leaves, basically, what happens is there is a certain motivation of the RM to leave. But the client centricity, if I exhibit that the client is better off here because we try and deliver risk-adjusted return of 4% to 6% Jensen's a lpha. There are very few companies in the country who have a Jensen's alpha published on the overall AUM. Now for example, if you want to calculate the Jensen's alpha of Anand Rathi Wealth, we are now listed, this is our 16th quarter, you can get to know the mark-to-market gain which I've had every quarter. You can calculate that Nifty mark -to-market and find out the risk, which is beta in the public domain. You can find out what is the total profit we have made in public domain, our mark-to-market for the last 3 - 3.5 years. So if you look at Jensen's alpha, so what am I trying to get to is, if I told a client, if the RM is leaving and if you want to move with him , what is a Jensen's alpha of the other company, which he is joining and that Jensen's alpha is not there. So it becomes easier to retain a client. Of course, RM has the strongest relationships, and it should always be like that. It should not be technology led. But yes, we've been able to retain about 79% of the 4 people so far of the assets they had. That's why you see an attrition number, client attrition number in 0.18 or 0.19.
We'll not increase the guidance because AUMs are on a specific date, if 31st March of FY '26 is not so good, then the AUM could be this way or that way. So we'll retain the guidance of INR One lakh crores. It's an aspiration number. We are at INR 91,568. We'll keep that as INR 1 lakh. We always like to under-commit, over-deliver in that same theme or the belief we would like to retain it like that, especially an AUM number, you would not want to update because it's very difficult for any of us to predict what 31st March of 2026 will be like. Does it answer, Aakash?
Anand Rathi Wealth Limited CC-Sep24.pdf · 2024-10-11
Sorry, your voice was a little muffled. Go again. I am so sorry.
Sure. The yields are on equity mutual funds about 1.08% or 1.09% post GST. On a yield basis, yields are always computed per annum. So if you look at the yields of all the mature structured products, which is greater than 1,500 over the last 12 years, the yield has been 1.17% calculated per annum on average assets, on structured products and then coming to debt MF, debt MF is about 0.43 post GST is the yield on the debt.
Anand Rathi Wealth Limited CC-Jun24.pdf · 2024-07-12
Sure. Thank you, Bhavin sir, for your positive comment on our results. And I will take the opportunity to highlight that this is our 11 th result. And you would see that all our results have been about 23% - 24% PAT growth year-on- year and the worst one was 24%. And the mean PAT growth has been 33%, and the median PAT growth of these 11 quarters has been 34%. So thank you so much to trust us as shareholders. Now coming to your pointed question. Why is the debt proportion lower? There are two reasons for it. Because we only try and get that money in, which is intergenerational wealth. More often than not, HNIs have intergenerational wealth. We do a very strong gatekeeping in terms of what assets we onboard to manage. So you would see very small debt proportions because I am looking at in 10, 15, 20, 30 years kind of money. If there's somebody who has short- term moneys, we are rippled as a wealth manager from it. Why you would see Anand Rathi Wealth having smaller proportions in debt because in 10-year money, debt has very low relevance. Second point is the proportions -- the differentials, the relative change between 11% and 7% is reasonably attributed towards the fact that there is mark- to-market more in equity and structured products. And we have been reasonably positive on equity markets from August 2020, and we were the only few wealth managers would have been positive for long-term money, still sensitizing clients of 10 - 12% corrections twice a year, which is the norm of the equity market. So mark-to-market differentials is one reason why structured products have come down to 24% and debt mutual funds has come down to 7% from 11%. I hope that answers. And we are not very bullish on debt. Even if interest rates going down, the long end of the yield curve is not elevated. So, we have the flat yield curve of Indian context is reasonably sustainable. And we don't see that debt will make too much capital appreciation, either, even if repo rates were to be brought down because the long end of the yield curve is still at 7%, spread between 10-year G - Sec and the repo rate is just about 0.5%. So on the contrary to the Street's belief that there is a lot of capital gain to be made in debt, but we think that people have not lost money, is why they don't expect to make on the debt side even if they go long end of the yield curve. Does it answer, sir?
Bhavin sir, there is a lot of factors. We think a little dramatically different when it comes to number of RM counts, productivity, all that we have had rights around, but a different thought process. So one is productivity increase is on account of we don't lose RMs, right? So the number of RMs who finished 5 years increases. So the average tenure of my RM group or my colleagues goes up. You would not see – It is seldom found that 4 quarters, no RM attrition. RM is what everybody bids for. My competitors who bid for my RMs, would want to give them twice the salary, but they won't leave. So productivity increase only happens if you don't have a leaking bucket at a client side or an RM side. So that's one thing which is the snowball effect. Of course, initially, you don't see that productivity increase. As with times, the lower attrition or nil attrition adds up significantly in a hockey stick kind of a recovery in terms of productivity, right? That's point one. Point two, what happens is when you're a listed company, the credibility in the client's mind itself is higher, right? So there is a flywheel effect. If you are listed, you get business. If you get business, your company does well. So the flywheel effect in a business of trust is the second. As now you ha ve been listed for 2.5 years as a company. For clients, a prospect you meet, it is relatively simpler because the brand building happens because of the listing status and vice versa. So that is second. So you are seeing that effect kick in. Third is that we are using mathematics significantly more over the last three years to convince somebody. We are finding so many portfolios with different complex products, but the IRRs at 10%, 11% for the last 15 years. It is surprising the extent of complexity with lower IRR. So if you mathematically establish that you are operating at significantly more complexity to get an 11% IRR, In the industry, you will find hundreds of portfolios, if not thousands and lakhs, where you would see complex products. But if you take the transaction-wise IRR on an Excel sheet, you would see them sub 10 or 11 or 12%. So people are expecting uncomplicated lot more when you use mathematics. So that is why our net flows have gone up because mathematics most people can't deny. And on English, people can debate till the cows come home, but mathematics has more pointed solutions. So the mix and transmission using mathematics is something which we learned about 2.5 years back, and that is actually adding up.