Nuvama Wealth bets on a prosperous India. But at P/BV of 3.5x, are valuations justified?

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After Anand Rathi Wealth and 360 One WAM, Nuvama became the third wealth management company to list on the Indian bourses.

Synopsis
Nuvama Wealth’s growth potential is tied up with the overall growth in India’s wealth. As the country’s GDP increases, wealth management will be in huge demand. While the business has high potential, it is available at high valuations. But those keeping an eye on the per-capita GDP simply can’t ignore the sector.

On September 26, Nuvama Wealth Management debuted on the BSE at INR2,699 apiece and settled the day 5% lower. Previously known as Edelweiss Securities, the company was renamed after private equity firm PAG bought a 56% stake in 2020 after it was announced that the company would be demerged and listed separately on the exchange. The company is in the business of wealth advisory where the bulk of its revenues are through fees and commission