Amit Goenka on why Rs 4,000- crore AUM for FY26 is a reasonable target for Nisus Finance
Amit Goenka, CMD, Nisus Finance Services, says the company does special situations and unique financing solutions in India and asset buying in the UAE. They saw one of the biggest change drivers less than a fortnight ago where almost 26 billion dirhams of REIT got listed in the UAE. They have never had REITs in the last 10 years and suddenly they have got a very large REIT from the government suddenly and opening at 13% premium. That is the opportunity that is available for Nisus and, of course, the India opportunity continues to grow. Tell us about your business. It seems like an interesting play. What exactly is the company into?
Amit Goenka: Nisus Finance is one of the foremost urban infrastructure finance companies which is headquartered in India. We are also the first listed fund manager out of India and we have obviously now diversified in the UAE. We believe these two are very high growth markets as far as urban infrastructure growth is concerned and therefore will require a tremendous amount of private capital participation. We have become one of the major conduits for global and domestic capital to pull into high value accretive opportunities and make the best out of them. We run multiple funds therefore to cater to these opportunities, that is obviously one of the largest segments of our work and related to that, of course, we also provide advice to several asset owners and asset players on how to optimise the opportunity in these markets. So, it is a twin model of advisory and asset management. But you also came out with your numbers and I see the profit has surged 36% and you also have a target of Rs 4,000 crores worth of AUM for FY26. What are going to be the levers for growth? Can you shed some light on going forward, what is going to be your guidance for the second half of this year?
Amit Goenka: FY25 was a very important year for us. This was the pivotal year where we really sort of created a huge paradigm in our favour, where we moved from being a medium player to now becoming one of the more foremost formidable players in our space both in India and the UAE. In fact, our foray into the UAE has been quite unique because we are very uniquely positioned to create a formal fund structure which finances and buys assets which was not really the case, it was largely family office-led, unlike in India where we still have a formal investment environment. Of course, there has been consolidation of the market, we have seen players consolidate, the big getting bigger and margins expansion. The IPO which really came out at the end of the last year provided us with that capital, unfortunately of course it was too short a runway for us to make the best of that. We had almost Rs 67 crore of cash out of the Rs 101 crore that we raised, sitting on a balance sheet as of March, but it really created the right tailwinds in our favour to now create a very huge decadal growth story for ourselves.
So, from an outlook perspective, we really just got started. This capital is now getting employed. We have got one of the largest investment banks raising great amounts of capital for us in our fund pools. We have got a significant amount of commitments from global funds. We are talking about a $200 million commitment into that. We have got an extraordinary amount of bank support in the UAE, close to about $250 million of loans under closure. So, with this capital alone that we will be able to put roughly about $500 million of committed capital and ought to be committed capital into the UAE market alone, that itself is about 4,000 plus crores over and above the existing Rs 1500 crore.
So, when we talk of a Rs 4,000 crore AUM target, it is reasonable, given that we do have that capital and the pipeline available for closure in the UAE alone. When I look at India, again it is a huge opportunity set, the AIFs have been growing at breakneck speed of almost 24% year-on-year. We have close to about Rs 70,000 crore of private capital which got invested last year, one of the largest FDI inflows in real estate. We saw a very large amount of the funding deficit getting filled in by AIFs and not necessarily banks and NBFCs given the central bank outlook. So, clearly the opportunity is also very favourable for us as an investor in India real estate. Having said that, we will still continue to be slightly cautious.
The markets in the last quarter which is of FY25 took a deep downturn. We saw almost $1 trillion of market cap getting wiped, $15 billion of FII money pulled out. On the back of that, there was almost a dip of 24% in sales in the last quarter. This year also this quarter also looks very muted. H1 number expectation is not more than 6-7% growth because of asset price inflation, people being conservative about outlook, about wanting to get into expensive transactions, some fear of inventory overhang coming up.There is a very large opportunity set, but even if we did Rs 1,000 crore which is a very small number to commit to the demand-supply gap, we can move our domestic AUM to over Rs 2,000 crore and our offshore AUM to another Rs 3,000 crore. As a sum of that, Rs 4,000 crore is a reasonable target for us to achieve in terms of total capital deployed given that it will still be a fractional amount of the total capital demand. In the UAE, we are talking of almost $350 billion worth of opportunities. In India, we are talking of close to about hundred billion dollars of opportunities. So out of a $450-billion opportunity set, we are talking only Rs 2,500 crore. So, it is a very small number, and it is achievable. The good part is that there is a continued interest given that we are now the fourth largest economy in the world and people have been focusing on India as the new destination for growth, that helps. Of course, factories are getting built, warehousing, data centres, a lot of infra spread across tier II, tier III as well, which is obviously bringing in new opportunities in our favour.
I see this year as effectively the year of the largest impact that we will be able to create for ourselves and our stakeholders. Given that now we have the cash to grow because of which we have got bank sanctions, we have got new investments coming in, we have created licenses in Dubai, in Mauritius, in India in GIFT City, so we have the structures ready, we have the infra ready, we have made those investments, so obviously last quarter we were making investments, shoring up our balance sheet, getting in the talent, creating the right sort of ecosystem for all this capital to walk in because it is blue-blooded institutional money, they need proper regulated systems in place which obviously the IPO is all about. So, now that we have that going for us and now capital has obviously started to sort of walk in, this will really be the year of change where we can make that quantum leap in our favour very-very quickly given that we are very well positioned in our own blue ocean, we have very limited competition in what we do. We do special situations and unique financing solutions in India, we do asset buying in the UAE and honestly there is really nobody. We saw one of the biggest change drivers just about less than a fortnight ago where almost 26 billion dirhams of REIT got listed in the UAE. They have never had REITs in the last 10 years and suddenly you have got a very large REIT from the government suddenly coming up and opening at 13% premium, so that is the opportunity that is really available for us and, of course, the India opportunity which continues to grow.
Help us understand that you have two of your key revenue streams that is the transaction advisory services and fund and asset management. So, going ahead, how do you see the mix of both of these two in your overall financials?
Amit Goenka: A very interesting question. Both are very correlated. For example, we saw about 400 plus transactions last year in India alone and we did about eight of them. So, a very small percentage of the total pipeline gets converted into actual investments. But then, there are the balance about 380, 390 transactions which still need capital and a solution. So, we are able to actually convert them into advisory opportunities. But obviously as the AUM is growing, the shift will largely continue to be on the fund revenues. Last year, we were at 30% fund and 70% advisory. This year we are at about 66% advisory and 34% fund. We see that shift continuing with the growth in AUM to maybe 50-50 or 60-40 in the coming in this financial year. As the AUM grows, as we set ourselves to do a billion dollar AUM in the next couple of years, obviously that shift of revenue will continue in favour of asset management fees than only advisory fees and obviously that continues to be a recurring income, that is an annuity because once you manage a corpus of money, you get your annuity fees, you keep on having those recurring revenues and fees and carry which is a very large percentage of the balance sheet, so obviously that is something which you are very squarely focused on.
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