Good evening, ladies and gentlemen, and welcome to 360 ONE WAM's Q4 and FY2025 Earnings Call. As a reminder, all participant lines will be in listen only mode. There will be an opportunity for you to ask questions after the management shares their thoughts. Should you require assistance during the conference, kindly signal the host by tapping on the raise hand icon. Please note, this conference is being recorded. On the call today, we have with us Mr. Karan Bhagat, MD and CEO; Mr. Yatin Shah, CEO 360 ONE Wealth; Mr. Anshuman Maheshwary, Chief Operating Officer; and Mr. Sanjay Wadhwa, Chief Financial Officer. I now hand it over to Sanjay to take this conference ahead.
Thank you, Anil, and a very good evening to everyone on the call today. Amidst a volatile capital market, particularly in the second half of the year, the growth in our client base continued to be very healthy. For this year, we have onboarded over 440 new clients with INR 10 crore plus Wealth ARR AUM. Presently, we have 3,300 plus clients with total AUM of INR 10 crore plus, who account for 95% of Wealth AUM, excluding custody. Before we deep dive into financials, we would like to highlight that the board has approved the FY 2026 first interim dividend of INR 6 per share.
Coming to the business and financial numbers, in line with our focus on ARR assets, total ARR AUM increased to INR 246,828 crore, up 23% year on year. This growth was largely driven by strong net flows at INR 25,974 crore during the year, as against INR 16,136 crore in financial year 2024.
For the full year, Wealth ARR net flows stood at INR 22,334 crore, up 42% year on year, while AMC gross flows were at INR 16,300 crore. AMC AUM saw a marginal reduction on a QOQ basis due to negative MTM, and the impact was lesser than the broader market correction, as a diversified asset base and strong gross flows were able to offset the decline. Our ARR revenues for the full year grew by 28.2% YOY at INR 1,701 crore, led by strong growth in assets across business segments. Our ARR revenue, as a percentage of total revenues from operations, stood at 70%.
Total revenues are up 35% YOY at INR 2,652 crore for FY 2025, also supported by higher other income. Total costs are up 27.3% YOY at INR 1,218 crore in FY 2025. In line with our previous comments, the cost-to-income ratio improved to 45.9% as compared to 48.7% in FY 2024.
We expect gradual improvement in this metric over the coming quarters, as the new business initiatives and teams become more productive. We are happy to report that the company recorded its highest-ever annual PAT at INR 1,015 crore, an increase of 26.6% year on year. Tangible ROE is at 24.3% in FY 2025, vis-à-vis 30.1% in FY 2024. The ratio is expected to improve in the coming quarters, as the investments made in our lending and alternate businesses in FY 2025 begin to reflect in the earning profile. With that, I would like to hand over to Anshuman to cover key business and strategic highlights.
Thanks, Sanjay, and good evening, everyone. At the outset, we are happy to report that the company's performance has successfully demonstrated a core tenet of growth resiliency and agility in a challenging and volatile FY 2025. Business years like FY 2025, which are a unique combination of market highs and sharp corrections amid geopolitical uncertainty, not only test businesses but also help in strengthening our belief in the fundamentals of the business of wealth and asset management. For us, it has further reinforced our confidence in the disciplined approach towards client assets and the resilience of our recurring business model. The year also marks several milestones for 360 ONE as we complete our 17th year of operations. As a firm, we have always believed in defining sharp strategic focus areas, creating deep competitive moats, and giving disproportionate attention to execution.
A culture of constant innovation and high performance encouraged us to take timely decisions on matters of team building, capital allocation, and investment in platform and technology. Today, we are in a better position to sustain the growth trends while scaling up to meet the requirements of varied client segments and drive new business engines. With that, I would like to share details regarding our recent strategic exclusive collaboration with UBS AG, one of the world's leading wealth managers. This collaboration brings together two visionary firms, powerhouses in the space of wealth management, to create a platform that is truly without parallel. This exclusivity is guided by shared belief in values, ambition, and a client-first philosophy. This historic collaboration has three interrelated components, i.e., business collaboration across geographies and business segments, UBS AG's stake in 360 One, and integration of UBS India's Wealth Management business with 360 One WAM.
Starting with the first, 360 One WAM and UBS AG have entered into an exclusive strategic collaboration where clients from both institutions will have access to their onshore and offshore wealth management solutions. Additionally, opportunities for deep cooperation in the segments of asset management and capital markets will also be tapped into. And to ensure a sharp focus on execution and the realization of the strategic opportunities, a joint Apex committee with senior leadership from both UBS and 360 One has been formed. Secondly, UBS AG will subscribe to warrants representing a stake of 4.95% in 360 One WAM at a price of INR 1,030.10 per warrant, a premium of about 14% to the three day VWAP as on the relevant date. This equity stake is an indication of UBS's commitment and trust not only in 360 One's core tenets but also in the India growth story.
We will also integrate UBS AG's India Wealth Management business into 360 One Wealth, along with their highly capable bankers and other team members and a trusted legacy of excellence. The business includes distribution and broking, discretionary and non-discretionary portfolio management, as well as lending services, very similar to what we do today at 360 One WAM. This business transfer adds approximately INR 26,000 crore of active AUM and recurring non-lending revenues of INR 45-50 crore, and will have a similar cost-to-income as our current Wealth business. The net consideration being paid for this business transfer is INR 307 crore. This collaboration is expected to unveil newer opportunities for our teams as well as clients. UBS AG's global investment expertise, research, and access will improve our ability to serve the cross-border needs of our clients and enhance our Wealth Management propositions significantly.
Along with the recent BNK Securities acquisition, we are now in a better position to grow our presence across broking, equity capital markets, merchant banking, and the corporate treasury space, while fortifying our lead position in wealth and alternate asset management. As an update on BNK, the regulatory approvals are underway, and we hope to complete the transaction within this quarter. Specifically, the BNK business performance remained strong over the last quarter, with operating revenues at about INR 65-70 crore and continued PAT of approximately INR 25 crore, bringing the full-year PAT to INR 102 crore for BNK. We are also happy to announce that all requisite approvals regarding the ET Money acquisition were received in quarter four, and the firm formally has become part of 360 ONE WAM.
In our journey over the last 17 years towards becoming a full-stack financial services player around segments of wealth management, public markets, including mutual funds, alternates, global business, and capital markets, we have remained consistently focused on serving the client needs in the most comprehensive manner possible. Within Wealth, the focus remains on serving the UHNI, HNI, and retail affluence with an advisory mindset. Equity broking and investment banking would be key drivers for the capital market segment. Over the last few years, we have been consolidating in a steadfast manner across business lines, and in the future, we aim to retain our leadership position in both wealth management and the alternate space while making significant strides in the global and capital market segment. I would take this opportunity to thank all our partners and stakeholders who have bestowed trust and confidence in us through our journey.
With that, I would like to hand over to Karan and Yatin for the question answers.
Thank you. Thank you, Anshuman. The floor is now open. As a reminder, you may tap on the raise hand icon to ask your questions. First on line, we have Prayesh Jain. Prayesh, kindly unmute yourself and ask your question.
Hey, hi, Karan. Congrats on the very good set of numbers as well as the transaction at UBS. Firstly, you know just on this UBS transaction, could you elaborate on you know what do you mean by exclusive arrangement? You know whether so when the domestic clients of yours get access to UBS Global, do you mean only UBS Global assets would be given to domestic clients, or what do you mean by an exclusive arrangement, both sides? That would be my first question.
No I think thank you, thank you for the compliments. I think to answer your question on the UBS side, I think what an exclusive arrangement largely implies is if we open for the clients LRS money, where the clients look at onboarding a global bank account, UBS will be our exclusive partner. Also, obviously, needless to say, in case we end up opening an external Asset Manager platform for our clients overseas, we would be using the services of UBS. Also in addition, on the asset management side, it is not necessary that all our GIFT City feeders and so on and so forth need to be only with UBS Asset Management. As an asset manager, we will work on an open architecture basis. So as a wealth management client in India, we will obviously get them the best open architecture asset management products available across the globe.
Needless to say, UBS also runs a lot of good products on the asset management side and some really nice exclusive ones. We will get our clients access to those also. And specifically, like we run discretionary mandates in India, UBS also runs global discretionary mandates, so we can get access to that also for our clients. On the other side, for UBS, you know all their referrals back into India for all their global NRI clients and clients who can potentially open NRE, NRI, NRO accounts into India would exclusively be referred to us. And while there is no specific tie-up on the asset management distribution, needless to say, basis basis basis performance basis, credibility, and diligence, you know hopefully, we can penetrate some of our own asset management products in the UBS distribution space.
Got that. So you know just an extension to that question, you know there's a 5% almost a 5% dilution in the equity. What against that, what could be the big revenue opportunity from you know this collaboration per se? Let's leave aside the INR 26,000 crore AUM that you are getting, for which you are paying a separate cash consideration. Just from this collaboration, what could be the revenue opportunity that could accrue over the next two to three years from this?
I think I wouldn't say the revenue contribution has a one-on-one match with the INR 2,000 crore we are raising. I think there are a lot of potential synergies on the revenue side, some of which I kind of described. But I think there are three or four large synergies on the revenue side. One, obviously, is the inbound referrals. One is the outbound access to products. And third is the ability to capture our clients' you know dollar portfolio or the global wallet share. And fourth, obviously, is our own ability to kind of distribute our asset management products better. So I think these three or four potential revenue opportunities exist. That necessarily doesn't have anything to do with the quantum of capital we are raising to give UBS AG a 4.95% stake. I think the opportunity is fairly large.
I think it's too early for me to kind of quantify each of these at least four verticals. You know it's a collaboration we are kind of we know for a fact that from a culture perspective, from an understanding perspective, and most importantly, from a client wallet share and platform perspective, it's extremely synergistic. Exactly what kind of, in INR terms, what kind of revenue it would be add is, I think, slightly earlier to kind of describe. Having said that, I think you know the primary use of capital for the amount of money we would end up raising is going to be a combination of three or four things. Needless to say, I think the the out of the INR 2,000 odd crores, we'll end up you know though the INR 300 crores won't go as a part of that INR 2,000 crores.
But obviously, I think on an overall pool basis, INR 300 - 350 crore will get utilized for that. I think we obviously acquired BNK Capital. We'll end up using INR 250 - 300 crore of incremental margin there. The NBFC book has continued to see some good growth. We'll add around about INR 8,900 crore there out of the INR 2,000 crore. And the last INR 4,500 crore would kind of largely get used in the potentially as overall kind of addition to the alternates business. So overall, I think you know I think the growth in revenue between a, from a collaboration perspective versus raising of capital are not exactly running parallel with each other, but both have both have their own unique reasons to do so.
Got that. Just a bookkeeping question w here you mention I think Anshuman mentioned that against INR 26,000 crore AUM, you just have about INR 50 crore revenue, which is a very low yield as compared to what you are making. And against that, you are saying that the cost-to-income is similar to what you are doing. So just trying to build a math out there. It looks very absurd. At such a low realization, you would have the same cost-to-income. And why such low realizations?
No Sir, I think two, three things there. I think the realization obviously is around INR 70-75 crore of revenue, slightly higher. You know the realization we have considered, INR 50-55 crore, is obviously you know there are certain elements of revenue which would not accrue on our platform. And obviously, from a transfer of business perspective, it is only you know relevant parts of the business which are transferred to us. It' s not as if the entire business or all the people are transferred. Only a part of the people are transferred. So the relevant cost, you know and obviously, you have to adjust for a lot of the operating function costs which do not need to be transferred.
So you know the part of the Wealth business which is getting kind of transferred to us, both from a revenue and cost perspective, is largely representative of INR 50-55 crore of income and a very, very similar cost-to-income. I think the cost-to-income, the per PBT broadly would be in the region of INR 20-25 crore. PAT would be in the region of INR 10-15 crore, which is largely resulting in that value of INR 300-odd crore.
Got it. I'll come back in the queue for more questions.
Yeah, thank you. Request you to restrict yourself to two questions. You could combine your questions and ask them, and we'll come back in case we have more time. Next on line, we have Mohit Mangal. Request you to unmute yourself and ask your question.
Yeah, hi. Thanks for taking my question. And first of all, congratulations, Karan, for being re-elected as MD for the next five years.
Thank you. Thank you.
Yeah. Coming to this UBS acquisition, you know I'm a little curious about this INR 26,000 odd crores. If you can just break into ARR and non-ARR AUM, and you know I mean, if I look at last two, three years, how the growth has been, say, for this UBS business?
I think out of the INR 26,000 crores, I think the ARR revenues, I remember the ARR revenue number. I do not remember the exact ARR AUM number, but I think it will be more or less reflective. But I think it is approximately a 30-70 kind of number or 25-75 kind of number. But let' s not forget, I think you know you know the focus really is on the fact that these are really, really good relationship managers. It is a great platform. They are really 12 super senior guys. I would be highly surprised if the yield of these assets continued to remain the same in our platform. I would be I would like to believe if our normalized yields are in the region of 75-80 basis points, somewhere between the existing yield of 25-30 basis points to 80 basis points, we would definitely be able to move these assets.
Whether we are able to move the entire INR 26,000 crore into active assets or maybe 60-70% of that is something which time will tell. And obviously, it' s a function of many things on how well we integrate and so on and so forth. But I would expect at least 60% of these assets to become yielding in a very, very similar format to what we have. Effectively, if I look at our yields today, I would have around 75-80 basis points on the ARR side and round about 30 odd basis points 35 basis points on the TBR side. I think you know I would expect this AUM base to settle somewhere around 30-40% on the ARR side and 60% on the on the on the transaction side, so effectively leaving us with a blended yield of round about 50-55 basis points.
Understood. Now, just continuing. I mean, say, last few years, we have done a few acquisitions. Like I mean, I remember L&T Finance, we had done, we had added around 30-35 RMs. Here, you know what's the math basically in terms of RM addition and other things? I mean, if you can just elaborate on that.
No RMs, the exact RM count across different kind of vintages and so on and so forth. We have 10 senior RMs within the UBS system. And you know maybe add a couple of three or four junior RMs. So 13 to 14 RMs in that sense. And another similar number of people on the service analyst and you know RM-facing side. Round about 30-odd people on the RM-facing side and another 10-15 people on the support to the business side.
Understood. My last question is on the flows. I think you know in the wealth management space in Q4, we had a kind of a muted quarter. So just wanted to know the reason for that. And h ow do you see financial year 2026 in terms of net flows?
No I think overall, you know I think the wealth management business over the last 90 odd, maybe last 120 odd days, I think overall gross flows have been okay. I think net flows numbers have also been quite decent. I think we lost we lost we lost around about eight to ten people across the country over the last over the last four, five months in terms of senior folks. And that led to approximately a net outflow of around about INR 2,300-2,400 odd crore across the system over the last four to five months on the ARR AUM side. So I think to a certain extent, the net flows are slightly dampened for the INR 2,500 crore of net outflows from the system. But overall, I think from just pure transaction activity, there was a patch of maybe 15 days to a month in the quarter where activity levels were slightly lower.
Obviously, it affected us lesser because we were able to kind of offset it with a lot of lot of higher degree of activity on the fixed income side as well as a few real estate transactions. So I think overall, TBR kind of continued in a tight range, not as active as, let's say, Q4 of last year and Q1 of this year. It was reasonably active, less active on equities, but more active on yield plus kind of assets. And you know I think overall market share, I would say, remained the same, but a little bit of little bit of impact on flows of INR 2,000-INR 3,000 crore, largely because of a combination of a little bit of attrition.
Understood. Any any guidance for financial year 2026 in terms of flows or profitability or something?
Yeah. I don't want to give a headline guidance just for next year, but at a very philosophical level, I think we would like to add round about 12-15% AUM every year, add round about 8-10% on mark-to-market. So effectively grow the AUM by around about 20-25%, you know resulting in a 16-18% growth in revenues and a consequent 20-25% growth in profits. So I think I think that's our headline mantra. I think we want to kind of be able to grow our grow our grow our AUM by 20-25%, resultant revenue growth of 15-20%, and back again, PAT growth of 20-25%.
Understood. Thanks, and wish you all the best [uncertain] .
Thank you Mohit. Next in line, we have Nitesh Jain. Nitesh, kindly unmute yourself.
Hi. Thanks. Hi, Karan. First question is on sharp improvement in retention. I missed the opening remarks. But if you can share how our wealth management retentions have improved on a quarter-on-quarter basis to 80 basis points this quarter, and how should we think about retentions going forward?
No, there's not there's not actually a massive massive improvement on a consistent basis on the wealth management retention. I think a little bit of improvement on retentions is with a little bit of the advisory fee kind of stabilizing and the non-active AUM becoming active. But obviously, this quarter has a couple of carry items both on the wealth management side as well as on the asset management side. So that has led to a little bit of improvement on the retention side. Second, obviously, the net interest margins in proportion, just because we raised capital last quarter, Q3 has added a little bit more to the overall ARR AUM. So therefore, those two things have kind of contributed a little towards the increase in retention. And a little bit third, as I said, is a little bit of the carry contribution.
So from a retention perspective, I think on a stable state basis, I would still look at closer to the average of the Q1 to Q4 retentions as opposed to just looking at the Q4 retentions.
Sure. And secondly, how should we think about the return on equity because we have depreciated QIP, and then there is more capital which will come through this UBS transaction? Our ROE will dip quite sharply versus what we used to do in the past. How should we think about ROE trajectory going forward?
No, that's always a challenge, I think. I'm kind of the opportunities are very, very large. I think, you knoe like Anshuman pointed out right at the beginning, I think we are going both wide and we're going wide and deep. Wide, obviously, in terms of kind of consolidating our position on the Wealth and the alternate side. We're also going deep in terms of geographies and segments in terms of ultra-high net worth, high net worth, skipping the affluent, but then going to the mass affluent. And similarly, on the asset management side, we built a substantial business in alternates. And hopefully, we can build a very good business on the public equity side. Hopefully, we can kind of complement the public equities business and grow the mutual fund business larger also.
And lastly, now with the entire UBS thing coming through, hopefully, we can kind of expand the global piece slightly sharper. And finally, with BNK Global report, the capital markets piece altogether. So I think all these five things are kind of coming together. It gives us a lot of width and a lot of breadth. And it may lead to maybe a complementary or an overlap of 6 to 9 months of higher capital. By the time you know by the time we end up using the current capital raise, we'll have the we'll have the UBS money coming in subject to warrant conversion.
So I think I think there are lots of opportunities out there. And we'll have to keep our eyes and ears open. I think UBS added a lot of strategic value to the business, and therefore, you know we felt comfortable taking in that capital and building out that optionality. But but at the very highest level, you're right.
I think we need to kind of ensure that we are able to do substantial justice to the incremental capital to maintain our ROE around the 20% mark.
Sure. And last question is on the global business. We have shown a INR 50 crore drag. So now going forward, should we assume that will be a cost saving?
Yeah, that goes away. Yes, that's right.
Okay. Thank you. Thank you, Karan.
Thank you. Next in line, we have Tejas Lakhani. Kindly unmute and ask your question.
Yeah, hi, Karan. Congratulations on all the good news.
Thank you.
I have three questions pertaining to the overarching business model that the that the business is re-pivoting to. And those are across talent flow dynamics, revenue model recalibration, and you know scale-up of the existing investments we have made. I just you know ask you all three. So on the talent flow dynamics, you know I'm witnessing a notable shift wherein if you were to take, say, calendar year 2023 and prior to that, we were the preferred destination for top talent. And if you see the last two years, we have now become a key hunting ground for competitors. So on that front, I'd like your thoughts. That's question number one. Do you prefer that I ask you all questions?
No, no. Just if I prefer if you ask all three, I can answer it cumulatively.
So that' s the first one. Second is on the revenue model recalibration. Maybe 12-14 quarters back, we discussed about the pivot we made from TBR to ARR. And interestingly, now we are seeing again some early signs of a shift back towards TBR, particularly with [uncertain] . So I just wanted to understand this model recalibration and your thoughts from a build-out perspective. And third is that on the scale-up of you know the mid-market and the global piece, global, of course, you have addressed it in the last comment. But you know could you provide an update on how the mid-market piece has been scaling up? And specifically, has your ramp-up met internal timelines and expectations post the earlier delays? And are you seeing any operational roadblocks that remain for the scale-up?
Great, Tejas. Thanks for all those questions. So I actually love your first question. The good news is you can't be a hunting ground for talent until you don't have good talent. And the other thing, obviously, is the fact that hopefully, while we are a hunting ground for good talent, we should hopefully continue to remain a platform which continues to attract good talent. I think as long as the second one is good to go, I think a little bit of churn would happen. Having said that, I think you know overall, you know the way to look at talent is obviously, I think we've lost a few people over the last last 10 to 12 months. I think as long as it's within a range, I think we're fairly comfortable. I wouldn't say it's ideal. It's obviously a little bit of a stop and go.
Even if you're running a marathon and you're the fastest, if you have to stop and go a little bit, you go a little slower. So we are obviously, you know whenever we lose talent, it's just not a great thing. At the same point of time, people have aspirations, and sometimes cultures don't match. Overall, I think we're in a good place, happy in both the locations where we've had a little bit of change. I think we've been able to attract some great talent. So you know sometimes challenges lead to opportunities.
The good news is in both places, I think we're very, very well covered, both in terms of relationship managers and in terms of number of employees and number of senior partners who we are able to attract, as well as our existing—we have a very, very strong existing force of people on both the investment and the sales side. So I would say it's nothing. You know it is it's not the even losing a single person is not the ideal state of things. But at the same point of time, it's part of growing business, and it's a little bit of stop and go. But I think we are kind of largely beyond it right now, and you know we've kind of consolidated our position with most of these clients.
We've continued to add wallet share from them. On the TBR ARR side, there's no real revenue there's no real model shift at all.
I think we continue to be super, super super focused on ARR. And you know when I think of, and I am going to say this without any context of any projections or guidances and so on and so forth, please do not take my take the numbers I am giving you as guidance. But the reality is today, as a business, we would be doing round about INR 2,700 - 2,750 crore of revenue and round about, give or take, INR 1,000 crore of profit after tax. Now, ideally speaking, we have to build we have to build the right canvas Excel model to move this INR 1,000 crore of PAT to around INR 2,100 - 2,200 crore, let us say 2.2 times, in a reasonable time period.
Now the reasonable time period could be three years, four years, five years. It could be I know beyond a point. None of us have a crystal gaze to get that absolutely right. But some time period between that.
When I look at that revenue mix of, revenue mix of let's say, and to get to that profit number, you obviously need to do INR 5,000 - 5,500 crore of revenue. And when I look at it forward and see how the INR 2,700 crore is going to grow to INR 5,000 - 5,500 crore of revenue, three things come to my mind, right? So I think the first thing which comes to my mind is, ideally speaking, you would need at least 75%-80 of that number to come in through ARR revenues. So I would love to maintain that mix of at least 75% coming from ARR revenues.
So obviously, I think if you were to convert the INR 5,000 crore of revenue into 75% or 80%, which is INR 3,750- 4,000 crore, and you know you need to, assuming you are in a broad basis of 70-odd basis points of ARR retention, you know we need to grow our current INR 260,000- 270,000 crore of ARR AUM to around about INR 500,000- 550,000 crore in that time period to get there. Second, obviously, other income potentially can add INR 200- 250 crore, but then you need another INR 1,000 crore to come in from the TBR side. And I think when you look at INR 1,000 crore of TBR relative to the current TBR of INR 600- 650 crore, there are lots of areas of improvement.
The first area of improvement, obviously, is out of the current INR 600 crore of TBR, we have got only INR 75 crore INR 75 crore of equity brokerage.
And I think that's a big potential area for us. If I look at all our competing private banks, for them, equity brokerage would be a substantially more relevant portion of their revenue. Out of our INR 2,700 crore today, it's less than 2.5-3%. Should we be close to around 8-10%? The answer is yes. So I think you know getting a great research firm like BNK not only adds that INR 200-250 crore of equity brokerage, which they get, but also increases our potential of increasing our INR 70 crore of equity brokerage to our set of clients to at least maybe two or three times that amount over a period of time. So If I look at the INR 1,000 crore of TBR, I think we need we need we need a good good equity platform to get there.
Along with that, obviously the, the unlisted equity piece, the fixed income trading piece, and obviously a little bit of merchant banking, all of that would put together to aggregate to INR 800-1,000 crore. And even then, that would be less than 20% of our overall revenue piece. So there is no real pivot. Having said that, we need we need to build a very stable TBR. And within within within the TBR itself, obviously, there are different different different qualities and different cyclicalities. So even within the TBR, our effort is to try and ensure that the quality of TBR is the best. And while we maintain TBR of 20% 25% of the overall business, yet we need to kind of grow it to ensure that it is at the right number over a three to four year time period.
Lastly, coming to your question of mid-market and global, I think I would not call them operational difficulties, but at the same point of time, I think mid-market, you know I think, took a slightly longer time from an organization structure perspective, which I have kind of mentioned before. But now, really, it is back down to execution and feet on street. So we' ve seen some AUM started to come. I think the revenues will kind of follow. We have now got a good team of 45-50 relationship managers on the high net worth side. So that goes on stream as we speak. It is pretty much on stream already.
I think our first five or six B2B presentations we made last month all have kind of come back with a good response. And I think that is something which will kind of find its feet for sure this year.
On the global side, I think the collaboration agreements will take a little bit longer. You kow the regulatory approval itself will take three to four months to come. By the time it goes on stream, I think it's at least definitely Q3 of the current year. But there are no real operational challenges. We are very well licensed in every jurisdiction for us to be able to start business everywhere. We've got offices everywhere which are kind of engaged in asset management distribution for us in any case. And that's that's kind of given us the license in every jurisdiction. So in some senses, I wouldn't call it anything, you know there's no operational kind of obstacle. It's really it's really up to us to do better execution on the mid-market side.
And on the global side, it's really about kind of accelerating the accelerating the regulatory approvals within the possible time constraints and ensuring that we get the collaboration agreements in place as fast as possible.
Got it. Thanks for that measured answer. I just have one follow-up, if I may.
Okay. Maybe I'll answer it with the next question, but I'll take the question. Yeah.
So so j ust one thing. See, you had earlier, again, many calls back alluded to when an RM leaves. You know typically, they walk away with one-third of the AUM. One-third is a cohort of clients who say, "Okay, aap start karo, we'll see how you progress." One-third typically stays on with with the manager himself. So is that has that changed in lieu of the recent senior management exits? And also, on the UBS bit, how does the revenue collaboration work? Yeah. Thanks so much and all the best.
Thank you.
Yeah. Next, I invite Sanketh Godha to kindly ask you a question. Sankit, yeah. Kindly unmute here.
Yeah, yeah. Can you hear me now?
Yes, go ahead.
Okay. So so first is the data keeping question. So just wanted to understand how much ET Money contributed to the AUM top line and profit in the current year after the integration. And I just wanted to understand how was the growth in that platform as AUM growth. So that's my first question. And the second question, I think you answered partially, but I just wanted to understand again that the discretionary PMS, which saw the bits of retention of almost 100 basis points compared to typical 40 basis points, is largely because of the carry what got recognized in the current quarter, right?
And if if if this carry is not there in future years or immediate quarters, then then it is going to claw back to the same 40 basis points. Is that the right understanding on the discretionary PMS side? And and lastly, on global aspiration, we had a team.
Now, team is not there. With UBS thing, is it fair to assume that your international base will be more UBS-linked compared to building your own team to to to build the global aspiration in a way? Just just want to understand a little more on that side, whether UBS will take over the entire global aspiration journey which we had. Those are my questions.
Just get Anshuman please. Yeah.
Absolutely. So so on the ET Money, I'm happy to just clarify the numbers. So on the AUM side, about INR 33,000 crore of AUM has been added on the TBR AUM side. And on the ARR side, about INR 1,750 odd crore has come in. And this is has obviously been reflected and been called up in the investor deck as well. The revenues from ET Money, just to note, ET Money has about eight weeks revenue and cost have gotten captured for this particular quarter. So the revenues is about at INR 6 crore, and there is a INR 1 crore loss for this two-month period.
And if I do it standalone full-year basis, what would be the number? Though you have not integrated that, but from full-year basis point of view, what's the 100 on profit and revenue?
The loss will be around about six to seven. Anshuman, why don't you go for it?
Yeah. I mean, obviously, just two months you know translates at a INR 1 crore loss translates to about INR 6 - 7 crore . But I think for the full year, if we look at their actual financial numbers, it will be about INR 10 - 12 crore, so it'll be higher than that for ET Money.
Okay. Perfect. And revenue, if you can call out, say, two months, it is INR 6 crore, then for full year, it was?
Revenue will largely largely be on track. I think it won't be exactly, it'll be about INR 50 odd crore, INR 50-52 crore would be the revenue.
Okay. Perfect. Perfect. Yeah. And on on the yield part or retention part with respect to discretionary PMS, which I asked, [audio distortion].
I think you're right. I think the discretionary PMS on the on the onthe separately managed accounts would go back to the same numbers. But having said that, there are there are at least three or four mandates in which we get a profit share. So you know the best is to look at the annualized yield as opposed to look at the quarterly yield. It's not as if it will disappear next year, but it will disappear next quarter.
Okay. So from from from full year point of view, you're confident that the same yield will be reported probably?
Yeah. Around the same yield will be reported next year also. Yes.
Got it. On the global thing?
Global, you're right. I think from a global wealth management aspiration perspective, as I said earlier, it's an exclusive collaboration with UBS. So we are hoping to work together with them and have the right spokes in India to be able to expand our global aspirations with them.
Okay. Perfect. That's it from my side. Thank you.
Thank you.
Next in line is Dipanjan. Dipanjan, kindly unmute yourself and ask your question.
Hey, hi, Karan. Hope I'm audible.
Yeah, hi.
Hi. Just few questions from my side. You know for the Q4 , if you can give some color on the breakup of the transactional revenue, just want to get some sense of you know the ex-broking businesses, how they are holding up, and some color on how you really see that, let's say, for the next few quarters, given the market volatility. Second, coming back you know to the question on OpEx. Now, you know owing to this UBS venture and you know strategic initiative, do you see any you know sort of cost that you would deploy to kind of get the ball rolling out there, maybe for the next 12-18 months, especially on the especially on the joint venture rather than the business that is getting acquired?
And lastly, on the ESOP expense side, it seems that for the last two quarters, it has been a little bit higher than the historical levels.
So how should one think of the overall variable cost or maybe the ESOP cost going ahead?
Sorry, Dipanjan, just just remind me what was the first question.
Yeah, yeah. The first question was on the transactional revenue.
Yeah, yeah, I got it. I remember. I remember. Yeah, no problem. No, I think I think on the just give you a very quick color of the transaction revenue on quarter four. I think it's a very interesting mix, actually. I think one, obviously, I think our equity brokerage numbers hold up quite well. So that INR 70-75 crore was around about INR 18-20 crore for the quarter. If I just look at pure equity listed brokerage, I had another INR 2-3-4 crore for commodities. So round about 15% of the TBR number was that. Then we had a third coming from from from from yield plus kind of transactions. So effectively, REITs and InvITs and stuff like that. A third coming from the unlisted side. And another third coming from from real estate. So I think overall, it was more more of fixed income.
For the Q1 , we saw 50% coming out of fixed income and 50% coming out of equity. Traditionally, compared to other quarters, I think unlisted was a substantially large portion. I think just given the way the client appetite is and even you know the kind of transactions which are available for us today and the kind of momentum on both the on both the on all asset classes, I think it's fair to say, I think going forward, it would it'll become a third of a third of a third of equity brokerage for us this year, a third of unlisted, and a third of a third of yield plus kind of transactions.
And the yield plus transaction, I'm using kind of slightly slightly broadly to include everything: REITs, inverts, commercial assets, and so on and so forth. So I think that's going to be the broad nature of TBR.
I think potentially over the next you know 12 months after that, we might have some other flows coming in from merchant banking and stuff like that. But for the next year, I think a third of equities, a third of unlisted, a third of yield plus transactions, including debt, will really represent the color of the TBR.
And coming down to the—
Sorry.
No, no, please, please go ahead. I mean, on the OpEx part.
Yeah. Coming to OpEx, really no significant OpEx because of the because of the UBS integration at all. I think we've got a couple of our really smart people kind of working through the working through the transaction. I think some of the senior leadership, including me, Anshuman, you know will be part of the collaboration committee to ensure that, along with the senior leadership from the UBS side, to ensure that we can you know we can get the coordination and the collaboration going on as fast as possible.
And you know the two senior folks and three senior folks pretty much running it from the strategy office. So they would kind of continue as one of the key roles into this into this function, and you know along with the finance team who's also involved in the coordination efforts. So I think overall, it does not really lead to any significant OpEx. Our our international offices continue to function as small offices for the asset management distribution side.
And you know we have got one person in Canada, one person in the US, two or three folks in Dubai, around six or seven people in Singapore. So that continues. That does'n t see any change. And lastly, I think on the ESOP cost, you are right. We have done we've taken approval last last March. Anshuman, I think last—
January.
Last January . And we launched this program for employees called Golden ESOPs, which which broadly accounted to around about, I think, if I'm not wrong, 7.5-8.0 million shares over a period of over a period of four to six years of listing. So that kind of that cost has kicked in over the last last, especially in the last nine months of this financial year. And like all ESOP plans, a large part of that cost gets accounted for in the first year itself. In the first year itself, I think around about 25-35% of the cost comes in, which is really represented by the higher ESOP cost. I think for the next two years, it is fair to say the ESOP cost will be at similar levels, not phenomenally different, maybe 10% lower.
But and then the year after that, a further 10% lower because simply because there's a certain quantum of upfronting of the of the of the ESOP costs. Yeah. So I think that covers your three questions. Thank you. Thank you.
Got it, Karan. Thank you and all the best.
Thank you. Next in line, we have Harish Subramanian. Harish, kindly unmute and ask your question.
Hi, Karan and team. I want to understand a couple of things on the UBS AG inbound. Would there be any referral fees you know or any revenue sharing with UBS AG for the global clients getting referred to you, or would it be like what you know you would acquire a typical transactionary client?
Well I think the collaboration agreement by definition will have referral fees flowing around both sides. I think there will be both outbound referral fees for us and similarly when UBS refers a client to us. But It' s still early days. I think on a principal basis, we have a very broad agreement on all of these things. We have still not gone down to kind of constructing the collaboration agreements on a on a case-to-case basis. We have broadly identified the 13-14 collaboration areas which we are going to work on.
I think between both the teams, we spent enough time to know that there's a good significant opportunity on all of these 13-14 points. In terms of defining exact commercials between these, you know it's it's it's it's it's its it's it's we've kind of set out set that out as a part of the collaboration committee to kind of work on that and get it done.
Okay. Got it . Another one, you know broadly in the industry per se, inbound, so what's the kind of industry opportunity if you have some numbers in terms of inbound wealth management numbers?
Inbound wealth management is very, very large. I think you know today, if I just look at our own NRI book, would be in excess of $2 billion already without us really kind of having an NRI sourcing office at all, right? So I think the the inward bound market is very, very large, especially for things like private markets, alternates.
The only money which has come until now is really on the listed equity side and mutual fund side. With all the awareness on GIFT City and everything else, I think it's a very, very large opportunity. I think you know I really don't have any exact numbers, but can our $2 billion become three times the number if we get that right? I think it won't be a big surprise. So I think that's that's the inbound opportunity is very large. The outbound opportunity, obviously, is kind of limited in its own way by whatever is possible regulatorily. But there also, we've seen a good movement happening on the GIFT City. And the LRS money also, which has been going out for the last 5-10 years, for the first three-four years, largely went into education and medical and so on and so forth.
For the last four, five years, it's kind of finding its way into a financial asset portfolio. So I think both put together, I think it's a reasonable size, I think. But the challenge and the heart of it is in the execution and having the right platform to be able to implement it.
Got it. Perfect. Thank you so much.
Thank you. Next in line, we have Abhijit Sakhare. Abhijit, kindly go ahead and ask your question. I invite Akash Vora to kindly ask your question. Akash, kindly unmute yourself and ask your question.
Yeah. Thanks for the opportunity and congrats, Karan sir, for a great set of numbers. So firstly, I would like to understand on the collaboration agreement. So within that agreement, do we also have a non-compete signed with UBS, wherein UBS won't, in the future, come and compete in the same set of business that we have co-ed with asset management in India or something like that? And my second question would be in terms of the the on the alternate side in the asset management business. So are more or less the bigger outflows done this year, or do we expect more outflows and redemptions in the coming year as well? If you could give a hang of the number.
No, I think the collaboration agreement obviously has specific non-compete clauses, which are reasonable time period non-compete clauses. I would not want to go into specific details of each non-compete clause, but they are very reasonable on both sides. So obviously, for whatever service UBS is providing us and similarly, whatever service we are providing to UBS. And the non-competes are fairly fairly fairly commercial and fairly limited from a time period point, but they are there. From a perspective of redemptions, I think the larger redemptions obviously are only there in normal course now. The last year obviously expressed itself in a big way in terms of a single item of redemption because the SOF series, which was 1 to 7, was raised on a specific period of time. All of it kind of came up for redemption together. We raised around INR 7,000 crore.
I think we have returned around INR 16,000-17,000 crore, of which INR 7,000-8,000 crore got returned this year itself, or INR 7,000 crore got returned this year. So I think that fund is more or less returned fully. I think it has got a very small amount of, if I am not wrong, some round about INR 1,000 crore remaining to return. So we do not have any block redemptions through this year or even in the coming years. As the block redemptions are largely now over. And now obviously, we have got funds which we have raised every year. And every year, we will raise some funds, and every year, some funds will come for redemption. So It' s going to be a natural cycle now.
Understood. If you could just highlight what kind of AMC flows on the alternate side you would expect in the next two years?
I think we've not kind of really—we've not kind of segmented our thought process exactly between between alternates and public markets. But overall, I think we would like a net flow number, as I said earlier, of round about 10-12% of our opening AUMs. Our opening AUM is round about INR 270,000 crore. So round about INR 27,000- 30,000 crore is the overall AUM we would want. I think it's fair to say approximately 65% odd 60-65% of that on the wealth management side and around 35% of that on the asset management side.
Thank you.
Thank you.
Thank you. Thanks a lot. Thank you, Abhijit.
Yeah. That's all we have time for this evening. Thank you, all of you, for joining us. We look forward to hosting you again. Thank you.
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