Stocks to buy: Bernstein is positive on India’s wealth management sector. The global brokerage and investment research firm has initiated coverage on India’s three leading wealth managers- Nuvama, 360One Wealth, and Anand Rathi Wealth– with a positive sector view.
Bernstein has an “outperform” view on Nuvama and 360 One Wealth, and a “market-perform” view on Anand Rathi Wealth.
“The rising wealth of India’s uber-rich provides the perfect pathway for a multi-year secular scale-up opportunity for the organised wealth managers,” Bernstein said.
India wealth managers: Why is Bernstein positive about them?
The global brokerage firm believes India’s wealth management sector is poised for healthy growth amid the significant rise of the uber-rich in the country.
The brokerage firm believes the rich will get richer in India as the household wealth is highly concentrated in the country, with top 1 per cent households controlling nearly 60 per cent of the total wealth.
“Although growth will continue to create opportunities across the pyramid, we think the rich will get richer. India’s uber-rich -an estimated nearly 3 million households – hold $2.7 trillion in liquid financial wealth, by our estimates,” Bernstein observed.
This rise of the uber-rich is expected to boost demand for professional wealth managers.
“With rising return expectations and product complexity, demand for professional advice is growing. We see specialised wealth managers benefiting, with a long growth runway. We expect specialised wealth managers to expand from $300 billion in assets under management (11 per cent share) to $1.6 trillion over the next decade, implying an 18 per cent+ CAGR,” Bernstein said.
Moreover, Bernstein noted that India’s wealth management industry is in the early stages of scaling up—similar to how private banks emerged in the late 1990s, which later led to massive value creation.
“We believe that, over the long term, the industry will consolidate, with a handful of dominant players emerging ahead of a long tail of smaller players. We favour wealth managers with a higher proportion of distribution business, as this segment delivers predictable and sticky growth,” said the brokerage firm.
(This is a developing story. Please check back for fresh updates.)
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