I think that’s it. It is the capital markets business - effectively Investment Banking which is more cyclical, hence should have a lower multiple.
However there is some value to a joint offering if you can offer a promoter wealth management services for their personal wealth and capital market services for their business - so the flywheel is stronger.
And to add, I don’t think you can pencil any multiple expansion here but earnings growth will be durable and strong. In a couple of years they should probably institute a significant dividend as well (as a % of PAT)
You don’t need a lot of capex and operating leverage will be very good. This is effectively a 100%
Capital Allocation is one to look out for, you don’t want them going further down on the income/wealth range and you don’t want a lot of acquisitive growth.
I expect similar situation with the Alts business for Edelweiss - probably worth the whole market cap here.
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