Nuvama Wealth Management Limited analyst Q&A

Thank you. Thank you very much. We will now begin the question and answer session. The first question is from the line of Jayant Kharote from Jefferies. Please go ahead.

Hi. Congratulations sir on the good set of numbers. First question is likely what Ashish pointed out in the beginning of the call. We are seeing a high level of churn so to say not just at RM, but even at senior management level in this wide space. First of all where have we been in this? Have we made any acquisitions or let's say acquihire this quarter and then the follow-up to that is if we do see RMs moving across typically what part of the AUM are you able to retain and then what are the modes that you are building to be able to retain the AUM?

Thank you, Jayant. So acquihire actually are working on. Acquihire may not be one of the best approaches because when you do that kind of a hiring 30%, 40% of the team which you get may not be what you want. So, our approach is two-fold always that you look for individual RMs and if there are teams in which a higher proportion of people are of the type which you want then you go ahead. We have not lost too many people, but like any industry which is growing I mean this is a pain which you will have to live with, specifically in a people-oriented industry. If either the industry is not growing then it's a different kind of a pain and if you are seeing a reasonable amount of growth and optimism about future this is one of the factors which you will have to live with and you have to manage time and again. At least at the leadership le vel, we have not seen any churn, but many new players I think are coming into the space across the spectrum. I think in retail, in affluent, in HNI, Ultra HNI and many players are also changing their strategy to move into this space. So, I actually see it will lead to an overall talent expansion because whichever way you slice or dice it, I don't think if people keep recruiting from one another there is going to be a winning approach because ultimately the talent pool is limited. So, people will have to dip into talent pools which are sitting inside banks, build infrastructure around training and other stuff in order to add to the talent pool for the industry to grow meaningfully. In terms of asset movement, I have always maintained this that it's not really easy for clients to close accounts and shift everything and specifically in cases where if somebody is making a movement a multiple number of times in their careers it's practically impossible for clients to shift everything. Yes, incremental business will get split between the two firms, but I think more than 60%, 70% of the AUM is retained with the existing firm, but typically in ultra-high net worth because the number of relationship points, the number of hooks which you have with the clients, the number of touch points which you have with the clients goes significantly beyond just one touch point. So, business typically gets split. It's not that 100% movement happens of assets neither do we get it, nor we lose.

And just to add to this do you expect the cost-to-income in this segment to be slightly elevated until this competitive intensity part recedes let us say for the next 6 months to 12 months?

In my view, no. Actually, the more impact of cost-to-income is happening today because of the change over which is happening from let's say the revenue recognition of AIF because for us, for example, we were in the process of booking 60% in year 1 which in CAT 2 has let's say fallen to maybe 30% or 25%. Many players in the market were booking 100% and that changeover is to my mind 12 months to maybe 24 months to 36 month process where it remains elevated, but even this year in our view by the time we end the year we should come back to 65% or below because if you see even in Q1, the impact to cost-to-income has happened not because of your regular revenues or ARR revenues, but because of transactional revenues and transactional opportunities actually keep coming differently from quarter -to-quarter and we are now seeing opportu nities which are emerging in Q2 you will see it should come back. And the cost movement, in a way people are overpaying, but ultimately the relationship manager cost as a proportion to overall c ost of the business is maybe 50%, 55%. So, if you have an established infrastructure, if you are a player which is of scale and your other costs are under control and if you are not mindlessly adding RMs at any cost then the cost-to-income should be under control.

That's very helpful. One last question if I could squeeze in is on the yield. We have seen and I'm not referring to the Y-o-Y numbers at all, if I look at this quarter in isolation, I see the yields are down to 90 bps on the ARR earning assets in the private piece and if I strip off the interest earning piece it probably is around 55 odd bps. This has been slightly lower than what we've been doing in the past two quarters. Can we assume this to be the new normal?

No, I meant to cover this in my opening remarks. I missed it. In this quarter, we've actually had a big win in our ARR assets. If you see our net new money in ARR is about INR 4700 crores. Out of that about INR 2000 crores have come early. It came in the month of April, May, but the deployment has not happened. It's come from two large families. Right now that money is sitting in liquid fund and arbitrage fund. It's come in our infinity portfolio which is our in -house non-discretionary and discretionary multi-asset portfolio. Once the deployment happens and we start earning the contracted rate the yields will come up. The impact of that single inflow is about five basis points.

That's very helpful. Thank you and congrats once again.

Thank you, Jayant.

Yes. Hi, good morning, everyone. Congrats on a great set of numbers. I wanted some more understanding on the capital market business. If you could link up your cost-to-income between the two segments which is your asset services and IE and IB. Also extending that point if the regulations or what the media has been talking about with respect to F&O activities, is that there will be a meaningful impact on the volumes in the asset services business?

So, overall cost-to-income Prayesh if you see in capital market is about 42%. Asset services in that sense is a more I would say is a lighter cost-to-income business. So that would hover around maybe 30%-odd, 30%, 33% a nd the other part automatically goes to about maybe 50%-55%. On the F&O side actually we are also waiting like everybody to see what's going to happen. There are a number of changes which are being proposed which will lead to - which is basically targeted to reduce the retail participation in the F&O market whic h I think will have a larger impact on maybe people who have broking business around retail. What that has as a second order impact on the institutional side will have to be seen, depending on what is the order of magnitude fall. If I'm saying if there is a, let's say, magnitude of 20 %- 25%, then maybe there could be a 5%, 8% impact on the float of asset services business of the institutional clients. We do not have a large F&O float of retail clients. As you know, our overall broking product within wealth management is relatively small. And within that, derivatives is even smaller. We've never participated in that part of the business. So that we are isolated. But if there is any second order impact on the institutional volumes on the derivative side, that will have to wait and see. Very difficult to say right now.

Is it fair to say, Ashish, that the capital markets -- the asset services business is more closer to being an annuity?

So, if you look at degrees of separation, like if I were to see, and I keep saying this, the closest to, let's say, the volume volatility of capital markets is I think broking. And the most distant is wealth management. And somewhere in between is, let's say, asset services, because it ultimately serves two communities. One is international clients, which basically trade in the domestic markets. And second is the domestic PMSs and AI Fs. Domestic PMSs and AI Fs, I think are fairly, fairly, fairly insulated, because there, our income is completely not linked to volume ups and downs. It's typically a service-oriented business. International, yes, if, let's say, there is a massive volume reduction and if they bring their volumes down, there could be some impact. But if you ask me, it's more or less the current nature of income which we have is more than 60%-65% is annuity. So, ideally, I don't think it should be valued in a similar manner as, let's say, core capital markets, because core capital markets is a different nature versus asset services, if that's what your question is.

See, there are two, three things, Prayesh, in that. One, there is a product -level yield, right? The product-level yield is more or less consistent, if you look at private markets and if you look at public markets. Now, in the last 12 months, what has happened is that, which I've been saying that we've not added assets in our private markets, because our focus was on deployment. And that's how private markets work, right? You first raise a fund, you deploy at least 70 %, 75%, 80% and then you r aise the next fund. Whereas public markets are continuous vehicle, there is no end date, unless you're doing a close-ended fund, which we don't have. And in the last 12 months, the proportion of public markets have gone up. So, it's just the multiplication. Now, if, let's say, we add another INR 2,000 crores of private assets, again, the yields will inch up. But I've always maintained that in the long run, let's say you look at INR 20,000 crores AUM when we reach in the next two years, three years, on a blended basis, the gross yield should be anywhere between 70 to 80 basis points is where we should land and settle, given how we see the composition of assets will move.

Perfect. Last question, what is our RM count plan for both wealth and private segment for this year, and possibly if you can go from that to the next two to three years?

So, we've said that we want to -- like two years out, we had said 20% every year. So we were able to achieve that last year. We added about 15 % to 18% in private, and I think more than 25%. This year also, the idea is same. So, you can anchor the figure at 20%. In some cases, we may be 15%. In some, we may be 25%. That's the range we want to operate at. That's the target now. Depending on how the markets and the environment is, we may calibrate it, dial up or dial down. But that's the way we are looking at it right now.

Thank you so much and all the best.

The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.

Yes, hi, sir. Congratulations on a good set of numbers. S ir, I have two questions actually. So, firstly, on the assets of MPIS in Nuvama Wealth and ARR assets, could you give us more details about the nature of the assets, how much is debt and equity? Because the reason I am asking this question is because if you look at the flow side, then if you calculate the MTM gains on these two books that is hardly in the range of about 2% to 3% on a sequential basis.

Correct. You're right. So I got your question. So, if you look at right now, the proportion would be more towards yield -oriented assets. But if you look at it 12 months from now, the way the net flows are happening now, we will have more equity. So higher proportion of equity managed products are now coming in the net flows of both MPIS and ARR. Current AUM may not be, let's say, reflective of where we will be 12 months from now.

But as of now, how much would it be? Can you give us a sense and how it has improved over the last two years?

Not last few years, maybe last 12 months is the right approach. Before that, our focus was reasonably high towards fixed income and yield-oriented assets. Even within managed products, we had a lot of non-correlated stuff like credit funds, infrastructure funds, business asset funds, which were less MTM products, because our approach was to attack the fixed income portfolios of clients because everybody was doing equity. Now, it's become more balanced and incremental flows are now coming towards equity assets. So, currently, maybe 10%, 15% would be equity assets, but 12 months from now, maybe that number could become 30%, 35%.

And sir, the second question was on the cost side in the capital markets business. So as you have alluded that in that asset services, it is roughly in the range of 30% to 33%, whereas in the [IE & IB, it is in the range of 50% to 55%. So will this be -- going ahead as I understand that in the second half of the financial year, then it should increase because of the variable payouts and all those things.

What we have done, Lalit, is that we have, in the first quarter itself, upfronted the variable payout. Given the fact that capital markets had a very strong quarter, if you look at the total cost and if you see between Q4 and Q1 FY '25, there is almost INR 24 crores cost jump, which is largely towards two elements. One would be the hikes because there is no manpower addition which is happening here. So, one would be the hikes would be, let's say, order of magnitude 6%, 7%, but rest would all be attributable to variable cost.

So, the segment between 30% to 35% and 50% to 55% will remain over the next 12 months?

Our approach of variable, we try to, I mean, we are not always correct, is to basically keep accruing the variable cost in line with the revenues in any quarter. We have not been perfectly, as I said, right at it . But to the extent possible, we try to align it so that there is no quarterly catch-up that happens. Although, I must admit, in the last two years, in our wealth management business, we had to do a catch-up in quarter 4, but not in the capital markets business.

The next question is from the line of Bhavin Pandey from Athena Investments.

Hi. Congratulations on a wonderful set of numbers. I just had one question regarding capital markets business. So, we could see some increase in market share. So could you just shed some light on the dynamics of the capital market space and how one sort of plans to lose or gain market share?

So, there are three lines of businesses which we report within our capital markets segment. One is institutional equities, second is investment banking, and third is asset services. So I'll start with the asset services business first. That basically serves two sets of clients. One is international investors, which is FPI, in which typically we serve systematic quant funds and hedge funds. And on the domestic side, long-only PMS and AIFs. So, essentially, the function of market share is out of the new clients which come into the fold in both the categories, how many new accounts are you able to get as far as your competition is concerned. In institutional equities, similar, we serve FPIs, d omestic MFs, and insurance companies. And that is typically voting led. So, as your voting on the research side goes up, your market share will typically go up. And investment bank, we are in ECM, M&A, PE and debt capital markets. So, across that, depending on the league tables and how much we are able to win is how our market share moves. So, I think overall, more than market share on the capital market side, what we keep worrying about is how the activity will move up or down, but at least post -elections and post-budget, for the next 12 months, it doesn't seem unless there is an external s hock which comes and hits, we don't foresee a tapering. Yes, quarter on quarter, the numbers could move up and down, but overall activity in the market should be at a similar level, except what Prayesh was mentioning in his question earlier, as to if something draconian happens on the F&O side, and that has a second order impact on the overall market and performance, then I think the entire sector, whether it is us, asset management, broking, everybody will get impacted.

And Mr. Kehair, just expanding on the anticipated rate cut, do we think if there's a rate cut, maybe let's say in a couple of quarters, private and the startup space could revive, so that could lead to more growth, or do you think the sort of action in in vestment banking activity that happened in this quarter is sort of a manifestation of the anticipation of a rate cut, if we could put it in a better way?

So, rate cut for us actually is reasonably neutral. It doesn't impact us too much because some businesses benefit, some businesses lose. Overall market, how it will react, now rate cuts typically happen when economy is not doing well, but markets have become counter to that. So, if you see when talks of rate cut happens in US, broader market starts doing well, because your asset valuations, your discounting rates, everything starts coming down. So, your current valuation starts looking cheaper than what it could be in future. So, it's extremely counterintuitive. If rate cuts happen, I think it'll lead to a positive into the market.

That’s great, really helpful and congrats again and good luck.

Thank you very much. The next question is from the line of Sanidhya, Unicorn Assets. Please go ahead.

Hi, good morning. Congratulations on the great set of numbers. My first question is, I just wanted to understand on the yield and net new money in the MPIS and other segments. So, how should we see that like year on year, quarter on quarter, gradual basis, because there is some like the yield on assets versus the, I mean, the revenue versus the assets. There is a difference in proportion of the growth, particularly in the wealth and the private segment? So, if you can just elaborate on that.

So, the retention on average assets in Nuvama Wealth ranges between, you know, 90 basis points to 1% depending on the quarter and the kind of MTM the assets have seen. And Q4 will normally be higher because insurance comes in. Typically, the way you have t o look at Nuvama Wealth is MPIS growth is around 30%-35% of the initial base. And that is how we have seen it over the last two years. And if you basically look at the fact that that contributes anywhere between 40% to 50% of the revenues, so that will provide you anywhere between 12% to 15% of revenue growth. And your other assets, which is your broking and loan assets, typically could grow anywhere between 10% to 15% in a year. And that has a 50% contribution. So, that will give you another 7-7.5%. So, 20% to 23% revenue growth is what you should be able to see. And if you are able to keep costs below 20%, then the profit growth will be higher. That's how it works in Nuvama Wealth. And in Nuvama Private, typically, the ARR growth, we've seen exceptional growth over the last two years. But I'm saying even if you take, again, 30% growth there and 10% -15% in transactional assets, that should also yield to about 20% growth in the overall revenue. That's how we look at it in terms of breakup and composition.

And what is this others in the client asset composition?

In which segment?

In the Nuvama Wealth.

That could be maybe unlisted shares, that could be client margin at exchanges. So, multiple items could be sitting there.

Okay. So, okay, fine. So, it's like the majority portion, like almost the 60% of that?

Yes.

Okay. Secondly, on the AMC front, so, I think we're not stating the actual loss in the presentation or anywhere else. So, it would be great if it could be presented in the presentation itself because it doesn't make sense to not write it just because we are in loss.

I didn't understand the question.

In the AMC section.

We show the operating loss in the data book.

Okay. Maybe I missed it.

There is an Excel data book. So, in our disclosures, which we give, there is obviously the quarterly presentation. But if you want more details, we also upload an Excel data book and that's there on our website also. And in the Excel data book, we have detailed numbers in terms of revenue, cost, and other m etrices and parameters across all of these businesses, given detail in Excel. So, you'll be able to see it.

Sure. Sure. We will add that. No problem.

Thank you. Thank you so much. And lastly, lastly, we had some news, maybe rumors, that an Indian promoter is trying to exit from Nuvama. Any confirmations on that?

Not that we know of, because they hold about 56%.

No, the Indian promoter.

No, that's not a rumor. I mean, there is no Indian promoter now. Edelweiss is now a passive shareholder. They hold 14%. As part of the de-merger, they had 14%. And they are not a promoter anymore. They may look to monetize a part of it, maybe half or one third of it. And they're under lock-in till 12 months from listing. So, last week of September, their lock -in will go. Post that, they may want to sell, because they want to monetize some and take the cash within the company, Edelweiss Group.

Great. Thank you so much. And on the dividend front, the policy continues. Like we have, last quarter, I think, or before that, we were discussing that we are yet to set up a proper framework for this?

So, like Bharat pointed out, the endeavor will be to do 40% to 60% of annual profits.

Okay. And since now buyback is also would be taxable and other things. So, are we looking for any other bonuses or any corporate actions, anything like that?

Right now, not under discussion, because bonus, unfortunately, if we do now, the taxation structure for people will get impacted. So, we are not thinking of bonus or anything. Maybe at some point in time, if the board decides and discusses to do a split, they may do. But right now, nothing under discussion. Dividend is something which has been discussed in detail. And that's why we started it.

Great. Thank you so much. All the best.

Thank you very much. The next question is from the line of Rahul Agarwal from Himalaya Investment Advisors. Please go ahead.

Congratulations on a very good set of numbers and thanks for the opportunity. My question, sir, is more on the asset services business. You report clearing assets and the custody assets there separately, and you calculate the yield on clearing assets. So, can you just explain this a bit? What are these two different models of revenue and what will be the kind of yield that you expect on each of these two segments? And what portion of this revenue comes from domestic clients versus international clients?

So, custody and clearing are two different activities. Custody is what, let's say, any institutional investor can give their assets to a custodian for safekeeping and different kinds of services are provided where you do custody fund accounting. Clearing is when a client trades in derivatives and their trades have to be cleared. Then you use a professional clearing member and you have to post your margin to the exchange through the professional clearing member and the clearing member earns on that margin and also on the services that are provided. So, these are two different lines of businesses. Assets under custody actually sit in a company which is different and assets under clearing sit in a company which is different. In combination, this is asset services business. The company in which assets under custody sit, we hold 49%, so we do a profit pickup. We don't show the revenue here. That revenue is lower. These are typically services related revenue. It will be maybe order of magnitude INR 30 crores, INR 40 crores, INR 50 crores a year. So, you can do the calculation in terms of BPS on assets on custody. In clearing, it's about 1.4% on assets under clearing and that's what we show here.

I mean, all of the reported revenue comes from the assets.

Reported revenue here, what you're seeing is all coming for clearing. Assets under custody and the profit from will be shown as a profit pickup in the main P&L. We can't show the revenue of that because it's an associate, not a subsidiary.

Understood. And that is about INR 30 crores to INR 50 crores per year?

It keeps ranging. Yes, maybe maximum INR 60 crores, INR 70 crores every year and keeps rising with the increase in assets under custody.

And that's the revenue number INR 60 crores, INR 70 crores?

Yes, that's the revenue. Correct.

And on the assets under clearing, since it's largely linked to what you mentioned, what portion of it do you consider as annuity versus exposed to capital market volatility? And what are the underlying growth drivers for that business? Or is it very hard to forecast and it's just linked to the capital markets?

So, in a way, it's linked to capital markets, but it's not difficult to forecast. If you ask me to say on a 3 years to 4 years basis, because institutional interest in India is on the uptrend. So, we are seeing newer clients from newer countries coming in, register and start participating. So, there is an increase in activity. So, if you look at the last 10 years or last 5 years, the number of institutions that have come in, so, our revenues will not move up or down with the daily volume which they do and all that stuff. It's more to how much exposure they want to take to India through derivatives. So, that on a secular basis, if you are asking me, we are seeing a positive trend. The impact on that business can happen if, let's say, over a 12 -month period, there is a completely reduced activity in the Indian derivatives market or there is a sharp fall in yields, in interest rate. That also, the impact starts hitting you after 12 months to 18 months because the way you've structured the collateral, there is zero impact for the first 18 months. So, I think those are the things that can impact that business. If you ask me from a split perspective between annuity, non-annuity, I think 50%, 60% you can categorize as a base level annuity that should continue to stay.

One last question. In the wealth business, you report a brokerage revenue as well. Is this linked to products like, say, marketing debentures or any other placement of products or is this linked to the brokerage revenue a typical broker would see from the equity cash or derivative segment?

The second category.

Okay. Thank you so much, sir.

Thank you. The next question is from the line of Sanket Godha from Avendus Spark. Please go ahead.

Yes. Thank you for the opportunity. In the Wealth business, what I see is that your AUM in net interest income has declined either year on year or sequentially. But if I look at the revenue, there has been meaningfully a strong growth either on year -on-year or sequentially. So, I just wanted to understand that this net interest income growth is largely driven by our rate interest rate increase on the margin trade funding or loan against shares? So, what led to that growth is one first question I have. And in Wealth, maybe if you can broadly indicate out of the total revenue of INR 76 crores what you made in MPIS, how much could be potentially annuity in nature, which is recurring going ahead also for the subsequent quarters? That's the first question which I have on Wealth? The next question I have on the flows, which I'll ask after you answer this?

So, on the interest income, Sanket, simply put, there are three, four factors which affect the overall interest income. One, of course, is the size of the book. Now, what has happened in this quarter is that the average book was higher, but the closing book was lower. So, because, our book is not like a long term loan, right? It's either ease of funding or loan against shar e where people come in, go out. And typically within ESOP also, we promote early selling because it's in the interest of the clients. We don't want them to hold their ESOPs on a levered basis on the hope of price increase because that's not in the interest of the client. And there are three factors which affect our income. Actually, four. One is the composition of the book. So, composition keeps changing. It's between LAS, ESOP and let's say margin finance. And if margin finance goes up, our income will go up. Second, if your average book is higher, obviously, you will earn higher because the average book was higher. And if your closing book is lower, that also becomes a positive impact because your expected credit loss gets reversed. And your processing fees gets upfronted because normally when you book a loan, the processing fees is accrued. Let's say the contracted loan period was 6 months and processing fees was a 50 basis points. You will accrue it over 6 months. But after 45 days, if the client sells his share and repays the loan, the residual processing fees comes in. So, these three, four things actually keeps the NII keep going up, down, up, down, up, down in that sense.

But is it fair to assume that because markets did very well in the current quarter, margin funding played a role?

Not really. For us, that's not a big component. I think the larger impact will come from. So, if markets do well, the positive to us is that people exercise their ESOPs more and sell them faster. So, that gives you processing fees, brokerage, and NII all three together. And that also has a positive impact.

Okay. And if you can maybe indicatively tell me the MPIS is closer to annuity. How much is annuity and how much is transactional in nature?

That I think I'll have to come back because offhand, I don't want to hazard a guess right now. But let me just look up if we have the numbers. Give me 30 seconds.

Yes, sure. And if you can even give indicatively how it has trended compared to say last 4 quarters and in the current quarter. Just to show…

Trend wise, I'll tell you. Trend wise, it's on the upside because if now you look at the sales which we are doing, okay, in MPIS more than 70% is now managed products. Which means what? Which means AIF, which means MF, which means PMS and insurance. Insurance is very small in terms of sales. So, and all those three categories and within AIF also as a stated strategy now for us, category three is far more important than category two. Because category two just gives you some little bit of upfront and then the trail is over the life of the period and most of the funds of category two are 7 years, 8 years, 10 year products. Real Estate fund, private equity fund. So, the trail becomes meaningless. In terms of sales, I can tell you our mutual fund, PMS, these sales numbers now on a quarterly basis, we do what we were doing in one full year. So, at least in the coming year, the way we see, if we book, let's say X of annuity in Q1, it should, in my view, if we continue this trend should become 3X by Q4. Currently, if I look at the overall, I think MPIS number, I think more than 50 %, 55%, 60% will be annuity, but we will have to confirm to you. This is just a rough cut calculation.

Yes. And the second question was that, if I look at overall flows, the private have done very well. It's almost, it's like INR 4,000 crores number, even if I look at active private. Just wanted to understand this trajectory, how do you see, given this is meaningfully better compared to quarterly run rate of previous year, how do you see this to play out? You yourself said that you won one couple of two big families, which supported th at number. But do you think that such kind of deals will happen or this number should be toned down a bit for subsequent quarters?

The total last years, if you see, the net flows was about INR 11,000 crores over the full year in private. I think if we extrapolate INR 4,700 crores, it'll go to some INR 18,000 crores. I don't think that should be the right approach. What you're saying is right. We should tone it down. Maybe order of magnitude anywhere between INR 13,000 crores to INR 15,000 crores. Essentially, 30% to 35%. Last year, we were able to do 40% of the opening book. This year, our opening book is around INR 38,000 crores and INR 38,000 crores or maybe INR34,000 crores. So, a 40% of that. So, anywhere between INR 13,000 crores to INR 15,000 crores is what we will aspire to achieve in the full year.

And lastly, just based on private, again, on UHNI space, I'm just wondering whether incremental client addition, which is happening, is it happening on advisory or still trail-based is the thing. I just wanted to understand if it is advisory, do you think…

The INR 4,700 which came, out of that, at least 65% is between non -discretionary and discretionary PMS. Now, you call that advisory, we call that trail-based. It's all the same. Now, in ARR, actually, in private, at least more than 90%, 95% is managed products, in which we include advisory, discretionary, non-discretionary, everything.

My major concern was that given incremental flows, if they come, the way I tell is advisory…

That pure advisory with some 5, 10 basis points, not of that variety, if that is what your question.

Okay. So, the yields around 90, 95 bps, what you indicated, will remain in the private business. That is the point I want?

Yes. That's what we feel.

Okay, perfect. That's it for me. Thank you very much.

Thank you, Sanket.

Thank you. The next question is from the line of Yash from Stallion Asset. Please go ahead.

Hi, sir. Thank you for the opportunity and congratulations for a great set of quarter. I wanted to understand that your asset services business is about 40% of your total capital markets revenue and just sort of an internal benchmark if you have that over the next 3 years, 4 years, 5 years, you think this part of the business can sort of go more stably and contribute to maybe 60%, 70% of the overall capital markets revenue. How do you think, how large can this business be?

So, it is 40% of the business today. I think, yes, over a period of time, it can grow larger in terms of proportion. But even today, in terms of profitability, its contribution will be more than 55 %, 60% of the capital markets.

So, automatically, see, typically, unless both institutional equities and investment bank continue to grow the way they have grown over the last year, which we will hope, but otherwise, I think from a secular growth perspective, asset services, the probability is higher and directionally, yes, it could become 60% of the revenues in the next 3 years to 4 years.

Okay, got it. Thank you.

Thank you very much. Ladies and gentlemen, due to time constraint, that was the last question. I now hand over the conference to Mr. Ashish Kehair for closing comments.

Thank you, Deepika. Thank you, everybody. It was, again, a pleasure having you all here. I hope to see you again in the next quarter. Thank you.

On behalf of Nuvama Wealth Management , that concludes this conference. Thank you for joining us and you may now disconnect your lines.