Yes, that risk remains. As per info, he spent 15 years jail and then came out finally on no objection from Lal’s family. Having said this, I think, as long as product is well received and same is reflective in numbers, valuation shall sustain.

Disclaimer: Holding since 98 levels. Views may be biased.

Market usually gives a valuation premium to private players and more to the lenders who have quality promoters, clean corporate governance, execution strength and some sort of moat in their business model.

Challenge with REC is that they lend to government entities in power sector that itself is a big deterrent for investors who look for sustainable earning growth and predictable compounding in the stock prices Not only power sector is cyclical but is also one of the biggest contributors to NPAs in lending sectors. Plus recovery from defaulting government customers can be difficult given the political elements involved.

Right now there is a credit frenzy in the system and every lender is trying to grow their loan book. In this phase, stock prices of conservative lenders with high quality risk management suffer. When NPA cycle turns and bad loans start piling up in the books, investors start flocking back to quality names.

PSU stocks have been darling of the street in the past and we have seen similar rallies and rosy outlooks but they have flattered to deceive. Not sure if this time is different.

Nippon Life AMC –

Q4 and FY 24 results and concall highlights –

Size of MF industry @ 55 lakh cr vs 40 lakh cr YoY – witnessing very strong growth

This is aprox 19 pc of GDP vs a world avg of of 60 pc of GDP – representing significant headroom for growth

No of unique MF investors in India @ 4.5 cr – 3.2 pc of total population ( showing under penetration )

MF unique investor base has increased @ 29 pc CAGR over 2020 -24

Segment wise breakup of MF industry ( total size @ 55 lakh cr ) –

Equity – 58 pc
Debt – 19 pc
Liquid – 11 pc
ETFs – 12 pc

For Nippon AMC – Equity share @ 49.2 pc, ETF share @ 25.9 pc

Client wise break up of MF industry –

Retail – 27 pc
HNIs – 34 pc
Corporate – 39 pc

For Nippon AMC – retail Mix @ 30 pc

Geography wise break up –

Top 30 cities – 82 pc
Beyond T-30 cities – 18 pc

For Nippon AMC – top 30 mix @ 80 pc

Industry’s monthly SIPs have hit 19k cr / month in Mar 24 vs 14k cr / month in Mar 23. SIP’s AUM stands @ 10.7 lakh cr vs 6.8 lakh cr in Mar 23

Nippon AMC’s AUM @ 5.24 lakh cr – currently India’s 4th largest AMC. Mkt share @ 7.9 pc, up 73 bps YoY. Investor base @ 1.6 cr

Nippon AMC’s avg SIP book @ 2300 cr / month

Company enjoys a 16.7 pc mkt share in ETFs, up 135 bps YoY

Distribution Channel –

80 National distributors – 20 pc of AUM
94 banks – 23 pc of AUM
1.01 lakh MF distributors – 57 pc of AUM

Q4 fy 24 financial outcomes –

Revenues – 468 vs 348 cr
EBITDA – 281 vs 199 cr
Other income – 92 vs 39 cr
PAT – 342 vs 198 cr

Financial investments on company’s books as on 31 Mar 24 @ 3932 cr ( 395 cr are in equity MFs, rest in Debt MFs / bank FDs )

Total number of company branches across India @ 192

Company witnessed 4th consecutive Qtr of Mkt share gains in Q4

Company’s mkt share in incremental SIPs @ a whopping 15 pc !!!

Nippon Gold ETF continues to be the biggest ETF in the Industry. Launched two more ETFs in Q4 – Bank and IT index funds

Digital transaction increased by 2X YoY in Q4

AIF continues to be an important area of future growth for the company. Aggressively launching new funds in this area

Dividend for FY 24 @ Rs 16.5/share !!!

Company’s future investments shall be focussed on Digital platforms, branding / marketing and acquiring new skill sets to ramp up AIF business

Seeing good traction in their Multicap, Largecap and Value funds – which is a good thing as it helps company diversify away from their best performing small cap fund

70-75 pc of company’s SIP book constitutes of folios investing less than 10k/month/fund

ESOP costs for next 4 yrs expected to be around 80 cr. Half of this would be incurred in FY 25

Disc : holding, biased, not SEBI registered

They just writeoff the invesment in theire uk subsidiary which is not contributing much to overall compay’s earning.