Why the wealth management sector could be the next multibagger; Reasons and stock picks

Imagine this: Every time an Indian moves Rs 1 lakh from gold stored in their locker to equity mutual funds, someone benefits. Not with a lottery ticket. Not with blind luck. But through a strategic investment in one of India’s fastest-growing sectors, wealth management.

While many focus on IT stocks and banking investments, a quiet change is happening. Indian households are gradually shifting trillions of rupees from physical assets to financial products. The companies taking advantage of this trend might provide impressive returns by 2030, which you should definitely keep under your spotlight.

Here​‍​‌‍​‍‌​‍​‌‍​‍‌ is the tough fact: only 9.5 percent of Indian household savings are invested in equities as compared to 62 percent in the USA. The difference is even more pronounced in professional wealth management, where only 15 percent of India’s wealth is professionally managed as opposed to 75 percent in the US. This is not a problem. It is an opportunity of trillions of dollars. The financialization of Indian savings is just about to happen.

Despite such low Indian participation in the equity market, the participation has grown by a staggering ~29 percent CAGR post-COVID pandemic. This is a visible change in the way Indians are saving for the future through these figures. SIP flows are skyrocketing, demat account creations are at record levels, and mutual fund AUMs are increasing at double-digit rates. This is a fundamental change in the saving habits of ​‍​‌‍​‍‌​‍​‌‍​‍‌Indians.

Several tailwinds are accelerating this shift. India’s ultra-high-net-worth population and HNI population are growing at a staggering rate. Monthly SIP contributions are now at historic peaks (Rs 29,361 crore in September), signalling a shift from lump-sum investments to disciplined wealth building. Government initiatives are accelerating financial inclusion and digital adoption, making wealth management services more accessible than ever. 

The​‍​‌‍​‍‌​‍​‌‍​‍‌ first mega-trend is the rapid growth of Assets Under Advice (AUA). AUM in the Indian wealth management sector is estimated to double from US$1.1 trillion in FY24 to US$2.3 trillion by FY29, representing a US$1.2 trillion expansion opportunity. India’s household financial assets increased by 14.5 percent in 2024, which is the fastest growth in the last eight years, with the wealth-to-GDP ratio at 4.5x compared to 6.5x in the US. 

The​‍​‌‍​‍‌​‍​‌‍​‍‌ second catalyst is the recurring revenue revolution. Wealth managers are moving from transaction-based brokerage to management advisory fees (0.5-1.5 percent AUM annually), which generate stable, recurring revenue for the companys engaged in this industry. 

The​‍​‌‍​‍‌​‍​‌‍​‍‌ third mega-trend is that ecosystem winners get a large part of the value. One-stop integrated platforms with portfolio advisory, asset management, lending, tax planning, and capital markets create a level of customer loyalty that competitors cannot match. 

Moreover, India’s HNI population is set to double to 1.65 million by 2027, whereas the UHNWIs population will increase by 50 percent by 2028, thereby going way ahead of the global growth trend. Such an emerging affluent customer base is an incredible growth opportunity for integrated wealth platforms to become the preferred choice of their ​‍​‌‍​‍‌​‍​‌‍​‍‌clients.

Here are the stocks you can watch

Motilal Oswal

Motilal​‍​‌‍​‍‌​‍​‌‍​‍‌ Oswal Financial Services runs the model of a twin-engine that includes diversified operating businesses (wealth, asset management, capital markets, housing finance) along with a treasury investment portfolio. The company, with a 31 percent CAGR of operating profits over ten years, along with over 1,750 internal RMs (Relationship Managers) and 9,340 external wealth managers reaching 14.5 million clients with Rs 6.8 lakh crore Assets under advice, is one of a perfect fit to capture India’s wealth financialization wave. 

Their revenue mix comprises recurring revenues (44 percent of total), AA+Rated balance sheet, and deep management proven by the strength, making them a structural beneficiary of rising HNI/affluent populations, which might trigger AUM to double over the next 5 ​‍​‌‍​‍‌​‍​‌‍​‍‌years.

JM Financial 

JM​‍​‌‍​‍‌​‍​‌‍​‍‌ Financial uses a multi-segment model where wealth management is the main growth engine that is supported by capital markets, asset management, private markets, and home loans. The Wealth AUM reached Rs 1.14 lakh crore with a recurring amount of Rs 32,021 crore and is growing at 26 percent. RMs and sales employees grew 43 percent YoY to 1,015. JM Financial is very well equipped to be a full-service financial platform with 70 branches, a 899 franchisee network.

Their capital markets franchise plus corporate advisory capabilities, therefore, generate a variety of revenue streams to take full advantage of India’s wealth acceleration, thus giving them the status of an institutional-to-retail wealth transition play that can be sustained till ​‍​‌‍​‍‌​‍​‌‍​‍‌2030.

Nuvama Wealth Management 

Nuvama​‍​‌‍​‍‌​‍​‌‍​‍‌ is a leading and significant player in the integrated wealth management space that is distinctly positioned to cater to the needs of ultra-high-net-worth, HNI, and affluent segments. It has an integrated ecosystem that offers wealth, asset management, and capital market solutions. Nuvama has client assets valued at Rs 1.08 lakh crore, growing 8 percent YoY and serving over 4,500 UHNI families with NPS (Net Promoter Score) of 82, and a solid backing by PAG, which is a US$55 billion AUM alternative manager, that shows the superiority of its execution.

Their Managed Products & Investment Solutions (MPIS) revenues grew 74 percent YoY, ARR assets crossed Rs 50,000 crore, growing 24 percent YoY, and a 21 percent CAGR in wealth AUM is a strong indication of the platform’s potential to scale effortlessly as the professional wealth under management grows in the next five years.

Thus, India’s​‍​‌‍​‍‌​‍​‌‍​‍‌ wealth management industry is visibly going through a significant growth phase that is being materially sustained by an increasingly affluent population, financialisation of savings, and the move to advisory-based revenue models. 

The question of what turns into the next multibagger theme for 2030 depends on the extent to which companies harness these structural tailwinds for their sustainable growth, customer retention, and improving their balance sheets. The size of the opportunity in front of them is really big; however, the winners will be those who execute well, comply with regulations, and navigate through the market ​‍​‌‍​‍‌​‍​‌‍​‍‌cycles.

Written by Satyajeet Mukherjee

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