NAM India surges 9%, hits new high; market cap touches Rs 50,000 crore

Motilal Oswal Financial Services initiated coverage on NAM India with a BUY rating and a one-year target price of Rs 900.

Shares of Nippon Life India Asset Management Company (NAM India) hit a new high of Rs 803.95, as they surged 9 per cent on the BSE in Tuesday’s intra-day trade, extending its past two day up move, in an otherwise weak market. In the last three days, the stock price of NAM India has soared 14 per cent. In comparison, the BSE Sensex was down 0.3 per cent at 81,272 at 02:42 pm. The stock surpassed its earlier high of Rs 748.90 touched on October 16, 2024.

 

Thus far in the calendar year 2024, the market price of NAM India has zoomed 75 per cent, as compared to 12.6 per cent rise in the benchmark index.

 

 

A sharp outperformance of the stock has seen the market capitalisation of Nippon AMC cross the Rs 50,000 crore-mark for the first time ever. Currently, with a market cap of Rs 50,281 crore, Nippon AMC was trading 8 per cent higher at Rs 792.95.

 

Nippon AMC is one of the largest asset managers in India, managing (directly & indirectly) assets across mutual funds including Exchange Traded Funds, managed accounts, including portfolio management services, alternative investments funds, and offshore funds and advisory mandates. 

 

NAM India is the asset manager of Nippon India Mutual Fund’s schemes. It also acts as an advisor for India focused Equity & Fixed Income funds in Japan (launched by Nissay Asset Management), and in Thailand (launched by BBL Asset Management). It also manages offshore funds through its subsidiary in Singapore and, also has a representative office in Dubai thereby catering to investors across Asia, Middle East, UK, US, & Europe.

 

Motilal Oswal Financial Services (MOFSL) initiated coverage on NAM India with a BUY rating and a one-year target price of Rs 900 based on Sep’26E Core P/E of 38x.

 

The brokerage firm in its initiate coverage report said that NAM India has experienced strong market share gains in the equity segment (ex-Hybrid) to 7.6 per cent in October 2024 from 7 per cent in April 202. This growth is driven by a recent improvement in fund performance, evident from the increase in the number of schemes appearing in the top quartile, based on a three-year return, from two in April 2021 to five in October 2024. Sustenance of fund performance will ensure continued market share gains in the equity segment.

 

The share of equity (including hybrid) AUM has increased to 49.2 per cent for NAM India in Q2FY25 from 41.6 per cent in Q4FY20. The improvement was led by a rise in unique investors’ customer base, a deep engagement with MFDs (107k+), and focused approach toward building the B30 base.

 

Over the medium term, NAM plans to bring in large offshore funds with the help of its parent company. For this, multiple possibilities exist bringing more funds into Indian schemes, launching special funds in Gift City, and launching funds in specific international geographies. Japan continues to remain their focus area. The overall offshore asset under management (AUM) grew ~52 per cent in FY24 and expected to ramp up faster in the coming 2-3 years.

 

With improvement in systematic investment plan (SIP) flow market share and its strong market share gains analysts at JM Financial Institutional Securities remain positive on NAM India on reduction in valuation gap with larger peer. Strong AUM growth will keep accruing strong revenues going forward, the brokerage firm had said in the Q2 result update. At present, the stock has achieved the brokerage firm’s target price of Rs 800 per share.