The share price of Nippon Life India Asset Management Ltd increased by up to 8.9% in morning transactions on the NSE on Wednesday. These increases were triggered by significant trade deal news. On Wednesday, the stock reached a 52-week high of $489.
According to CNBC TV-18, which cited sources, private sector lender IndusInd Bank is planning to dispose of a 2.86% equity holding in Nippon Life India Asset Management Ltd (Nippon AMC) through block sales. According to CNBC-TV18, the block deal is worth Rs.762 crore, and the broker is JM Financial Institutional Securities Ltd. On Wednesday, Nippon Life traded volumes on the NSE. According to NSE statistics, 38,19,063 shares changed hands.
Nippon Life India Asset Management Limited is a key asset manager in India, managing (directly and indirectly) assets across mutual funds, ETFs, managed accounts, including portfolio management services, alternative investment funds, offshore funds, and advisory mandates. Nippon Life is also the asset manager for the schemes of Nippon India Mutual Fund.
Nippon Life India posted outstanding financial results in the second quarter and first half of FY24. Monthly SIP flows increased steadily throughout the September quarter. SIP is an abbreviation for Systematic Investment Plan. Assets under management (AUM) climbed to 350600 crore in the September quarter from 313600 crore in the June quarter and 285,100 crore in the previous quarter.
According to Axis Securities analysts, AUM growth will continue - Nippon Life will receive approximately 15,000 crore per year for managing the EPFO corpus and will charge approximately 4bps, adding 5-6 crore per year to the company's bottom line.
Further According to Axis Securities, increased share in high-yielding asset classes is also a crucial benefit. The proportion of high-yielding equities in AUM increased from 44.5% in Q1FY24 to 46.8% in Q2FY24, resulting in a 70 basis point rise in yields to support solid revenue growth.
Overall, analysts at Axis believe that Nippon Life is in a good position to improve its AUM growth in the future because it is one of the fastest growing AMCs in B-30 cities and has a strong distributor base, delivering sustainable operating profit and return ratios.
