JM Financial
Dive deep into road ahead for this emerging wealth manager
JM Financial’s business strategy is built on four distinct and complementary business segments.
First is the Corporate Advisory & Capital Markets segment, the group’s 50-year-old business, which acts as a full-service investment bank. It has dominant market share in IPOs and QIPs and also does M&As and advisory transactions. This business did 788 Cr revenue and 322 Cr PAT in FY25. Currently this business has 120,000 Cr IPO pipeline where management said they would earn 80bps - 1% in next 6-12 months. This translates to ~1000 Cr+ revenue from this division in next 1 year.
Second is the Wealth & Asset Management business, the firm’s major future value driver. Together both on Wealth & Asset side, JM has an AUM of ~130,000 Cr and this division is roughly at 80-100 Cr annual PAT run-rate currently. Right now lot of investments in RMs and platform are being done to provide future growth in the business so profitability of this business is suppressed.
Third is the Private Markets segment, where business has pivoted from high-risk lending to a “capital-light, originate-to-syndicate” model . JM originates private credit deals in real estate credit, corporate credit, structured credit, equity-linked private situations. This segment’s growth is fueled by two streams: interest income + syndication fees from deal-making and, also, the recovery of a massive INR 1,000 crore provision pool , which is now being written back directly as profit. Currently this business has 5000 Cr book which management wants to double in next 3 years to 10000 Cr. They target 3% RoA, 13-14% RoE on this business. This business did 175 Cr PAT in FY25.
Finally, the Affordable Home Loans business is a budding “IPO candidate” , with a clear strategy to scale its loan book to 10,000 Cr by FY30 in preparation for a planned public listing around 2028. Current loan book is around ~3000 Cr. This business did 54 Cr PAT in FY25 and has RoA of ~2%.
Now let us do a Sum of the Parts Valuation (SOTP) exercise to determine the odds of investing in JM.