Summary
Nippon Life India Asset Management Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026
Event Participants
Executives 9 Aashwin Dugal, Amol Bilagi, Andrew Holland, Arpanarghya Saha, Arun Sundaresan, Ashish Chugani, Parag Joglekar, Saugata Chatterjee, Shin Matsui-san, Sundeep Sikka
Analysts 6 Abhijeet Sakhare, Ankit Bihani, Gaurav Jani, Lalit Mohan Deo, Meghna Luthra, Mohit Mangal, Prayesh Jain, Rahul Kumar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total AUM | ₹8.16 trillion | Milestone achievement; includes Mutual Funds, Managed Accounts, and Offshore. |
| MF QAAUM | ₹7.01 trillion | +23% YoY, +7% QoQ; fastest growing AMC among the top 10. |
| Operating Profit | ₹4.58 crores | +22% YoY, +9% QoQ; highest ever quarterly operating profit. |
| Profit After Tax | ₹4.04 crores | +37% YoY, +17% QoQ; highest ever quarterly PAT. |
| Revenue | ₹7.05 crores | +20% YoY, +7% QoQ; driven by growth in AUM and commodity ETFs. |
| Market Share | 8.65% | +35 bps YoY; highest market share level since June 2019. |
| Equity Market Share | 7.13% | Stable QoQ; +11 bps YoY despite market volatility. |
| Systematic Book | ₹37.60 crores | +12% YoY, +3% QoQ; annualized systematic book stands at ₹451 crores. |
| Overall Yield | 37 bps | Blended yield supported by high-yielding commodity ETFs. |
| Equity Yield | 53 bps | Core margin remains resilient despite regulatory pricing pressure. |
| ETF Yield | 20 bps | Blended rate; Gold ETFs at ~60 bps and Silver ETFs at ~30 bps. |
Geographic & Segment Commentary
- ETF Segment: Strategic focus on liquidity and volume leadership. AUM reached ₹2.09 trillion with a 20.31% market share; the company holds 51% of ETF trading volumes on NSE/BSE. Commodity ETFs (Gold/Silver) crossed ₹1 trillion AUM in Jan-2026, with Gold ETFs ranking in the top 15 globally for 2025 inflows.
- Digital Franchise: Digital ecosystem contributed 77% of all new purchase transactions in Q3 FY26. Total digital transactions and SIP registrations reached 4.32 million, reflecting a 6% YoY increase and record monthly volumes in December 2025.
- AIF & Offshore: Raised cumulative commitments of ₹89.2 billion (+28% YoY). Strategic collaboration with DWS Group (minority stake up to 40% in AIF sub) focuses on global distribution and passive products. Offshore AUM grew 7% in 9M FY26 to ₹162 billion, inclusive of new NISA scheme launches in Japan.
Company-Specific & Strategic Commentary
- DWS Strategic Collaboration: Entered a non-binding agreement for DWS to acquire up to 40% of the AIF subsidiary. This partnership aims to leverage DWS’s global distribution network to drive flows into Indian passive and alternative products.
- Specialized Investment Funds (SIF): Launched a new dedicated vertical led by Andrew Holland focusing on the HNI segment. Management views SIF as a high-margin business (value-add over AUM volume) that will become a major growth driver over a 5-10 year horizon.
- Cost Efficiency: Operating expenses grew 14% YoY (excluding Labour Code impacts). Management maintains a guidance of ~15% OpEx growth, focusing on digital scalability to absorb potential regulatory fee compressions.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Operating Expenses | ~15% growth | Management expects consistent investment in branding and technology while maintaining efficiency. |
| ESOP Expenses | ₹26 crores | Projected total expense for FY27 across old and new schemes. |
| Market Share | Double-digit (Ex-NFO) | Strategy focuses on gaining share in Flexi Cap and maintaining dominance in ETFs. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Changes | SEBI’s removal of the 5 bps exit load and TER slab revisions may compress margins. Management intends to mitigate this through scale and operational efficiencies. |
| Market Volatility | Near-term performance in Flexi Cap and Small Cap funds impacted by market swings. Valuation concerns led the firm to continue restricting lump-sum inflows in Small Cap. |
| Institutional Flows | Offshore and institutional mandates are “binary” and subject to long lead times. Success depends on the DWS collaboration and global sentiment toward India. |
Q&A Highlights
ETF Yields and Liquidity
- Question: What drives the yield and competitive advantage in ETFs? (Lalit Mohan Deo)
- Answer: Blended ETF yield is 20 bps, but Gold is ~60 bps and Silver ~30 bps. High liquidity leads to lower tracking error and impact costs, allowing the firm to maintain higher yields than competitors who use price cuts to gain AUM (Sundeep Sikka, Parag Joglekar).
Small Cap Flow Strategy
- Question: What are the trends in Small Cap net flows? (Rahul Kumar)
- Answer: Management has stopped lump-sum investments for two years due to stretched valuations. While net flows remain positive, inflows are strictly restricted to SIPs to protect investor interests (Saugata Chatterjee).
SIF Strategy
- Question: How will the economics of the new SIF vertical work? (Mohit Mangal)
- Answer: SIF is treated as a specialized high-alpha product for HNIs. The focus is on profitability and value-add rather than AUM-gathering through low yields (Sundeep Sikka).
Key Takeaway
Nippon Life India Asset Management (NAM India) delivered a record-breaking Q3 FY26, surpassing ₹8 trillion in total AUM and achieving its highest-ever quarterly operating profit of ₹4.58 billion. Performance was characterized by market share gains across both Mutual Fund (8.65%) and ETF segments, with the company emerging as the fastest-growing top-10 AMC. Strategic focus remains on the “granularity” of its retail base, with 75% of SIPs below ₹10,000, and a dominant 51% share of industry ETF trading volumes. While regulatory changes and market volatility present near-term margin and performance headwinds, management is pivoting toward high-margin alternatives through the new SIF vertical and a strategic partnership with DWS to capture global flows. NAM India appears well-positioned to maintain its leadership through digital scale and a robust commodity ETF franchise as it enters FY27.
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