360 One Wam Limited (360ONE) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen, and welcome to 360 One Wam Earnings Call for Q1 FY '27. [Operator Instructions] Please note, this conference is being recorded. On the call today, we have with us Mr. Karan Bhagat, MD and CEO; Mr. Yatin Shah, CEO of the Wealth business; Mr. Sanjay Wadhwa, CFO; and Mr. Anshuman Maheshwary. I now hand it over to Mr. Sanjay Wadhwa to take this call forward. Thank you.

Thank you, Anil. A very good evening to all the participants, and thank you for joining us on our Q1 FY '27 earnings call. Before turning to the financial performance, a brief word on macro backdrop, Indian equity indices staged a broad-based recovery over the quarter, navigating a period of geopolitical uncertainty with characteristic resilience. The resilience was equally visible in flows into the domestic asset and wealth management ecosystem, reaffirming our conviction in the industry's structural growth story. India's wealth market remains deeply underpenetrated and presents a significant growth opportunity. For a franchise like ours that is positioned at a premium end of the market, this represents an opportunity to compound our leadership over the coming years. Let me turn to the numbers. Our total ARR AUM increased by 19% to INR 3,42,000 crores with well AUM at INR 2,42,000 crores, a growth of 24.2% and asset management AUM at INR 1 lakh crore, an increase of 8.2%. Overall AUM rose by 17% to INR 7.8 lakh crores as on June 30, 2026. We garnered the ARR net flows at INR 10,815 crores in this quarter as compared to INR 8,985 crores in the previous quarter. The wealth business drove the increase, contributing strong flows of INR 13,379 crores as compared to INR 6,957 crores in Q4. It is a clear reflection of sustained momentum in our core UHNI franchise amplified by contributions from recently onboarded teams. On the asset management side, even as cross flow remained very strong at approximately INR 4,000 crores, the net flows were negative due to one large outflow in an institutional mandate. Q1 FY '27, ARR revenue stood at INR 614 crores, up 20.3% year-on-year, with ARR revenue now comprising 75% of total revenue from operations. ARR retention was at 74 basis points, with Wealth at 71% and Asset Management at 83 basis points. Our TBR rose by 37.3% year-on-year to INR 208 crores during the quarter. Total revenue increased 20% to INR 870 crores, driven by strong growth across both wealth and asset verticals. Total cost stood at INR 446 crores with a cost-to-income ratio of 51.3% as compared to 53.5% in Q4 FY '26. We expect gradual improvement in this metric. As these businesses scale up, we drive synergies from strategic initiatives and incoming wealth teams reach [indiscernible] productivity. We're very happy to report a profit after tax of INR 330 crores, an increase of 14.8%. Tangible ROE stood at 19.4%, and we expect this to improve as capital deployed in our lending and asset businesses begin to reflect in earnings. Before turning to a brief update on our individual businesses and strategic initiatives, let me reiterate the structural backdrop underpinning our confidence acceptance of professional wealth management continues to rise and wealth creation at the top of the pyramid is outpacing the broader economy. For a full stack platform spanning across wealth and asset management, this is a long and durable runway and our strategy remains centered on being the manager of choice for our clients' core portfolios. Our UHNI franchise remains an anchor of the firm and continues to perform very well. The addressable market spans 40,000 to 45,000 households, and our focus is consistent across 3 vectors, deepening wallet share of existing clients, extending beyond the top cities and being the manager of first-choice post monetization events. Our advisory-led proposition continues to gain traction as clients migrate from transactional product-driven engagement to portfolio-level solution-oriented mandates enabling more comprehensive services across the platform and relationships that endure across cycles and generations. We continue to invest ahead of the -- across RM capabilities, technology, portfolio analytics and client data security. Our HNI proposition is scaling well and is a natural extension of the UHNI franchise. The program now spans approximately 60-plus relationship managers across 12 locations, managing in excess of INR 5,000 crores of AUM for 800-plus clients, at ARR retention yield of around 90 basis points. What makes this segment strategically important is not just the 200-plus -- 200,000-plus household opportunity it opens up but that it acts as a powerful feeder pipeline into our core proposition supported by a digital-first scalable operating model, a state-of-the-art client in our RM app and referrals from our existing clients in RM base. As business momentum continues and productivity built through the year, we expect the business to break even on direct cost by end of this year. FY '26 was a year of deliberate strategic transformation of the ET Money business, resetting the business model towards profitability. We expect the business to reach breakeven level this year. In the institutional business, the institutional equities franchise continues to perform strongly with 550-plus mid- and small cap companies under coverage, 300-plus institutional clients and over 85% of broking revenue from the [indiscernible] segment. More importantly, the synergies envisaged at acquisition are coming to life, broking income from UHNI clients is seeing an uplift and access to 600-plus corporate treasuries is opening meaningful cross-sell into wealth treasury advisory and lending. Our ECM focused IB capabilities while still building out are showing strong early traction. We expect the broking mix to turn steadily more annuity-like as institutions scales up and UHNI participation rises. Our asset management business continues to be a structural growth engine, and its quality is reflected in a rising ARR contribution and improving cost efficiencies. AUM has now crossed key milestone of INR 1 lakh crore with strong momentum across our alternate platform, comprising of private equity, private credit, real estate, infrastructure, renewables and multi-asset as well as listed strategies. Our product engine remains active and extremely effective. We continue to broaden the shelf across FPMS and MF platforms, including SIFs. The offshore opportunity is building steadily, aided by global institutional mandates and the distribution reach that our collaboration with UBS opens up. We continue to see steady progress across the various components of our UBS collaboration, cross referral programs across [indiscernible] resident and global mandates are showing early traction, and we expect these to convert into meaningful flows over the medium term. UBS's global distribution is also expected to open up offshore capital access for our alternates and listed strategies during this year. Taken together, these businesses reinforce the 360 One flywheel as a single integrated platform across Wealth and Asset Management, in which each business strengthens the other and deepens our relationship with the client. I would like to thank all our stakeholders who have been with us. And with that, I'll hand it over to Karan for his comments.

Thank you, Sanjay. The floor is now open. We have Karan join us. [Operator Instructions] I request Mohit Mangal kindly unmute yourself and ask your question.

All right. Congratulations on a good set of numbers. I have 3 questions. My first question is basically on the net flows, I think we are on the target to achieve that 12% to 15% of opening net flows but do you think it will be more lopsided towards Wealth as AMC is kind of seeing outflows, specifically in the BMS over the last 2 to 3 quarters.

Mohit, do you want to do all 3 questions and I can answer it?

Okay. Okay. So basically, my second question is on the cost-to-income ratio. I think we have this kind of [indiscernible] to grow at least 150 to 200 basis point decline. But this quarter also, it was more than 51%. So should we expect the remainder of financial year '27 to have that operating leverage and declining cost to income? And lastly, basically an industry question, we are a significant player in the private credit industry. So just wanted to know how do you see the future for this segment and how are we kind of positioned to increase our dominant position for it?

Thank you. Thank you, Mohit. Thank you, everybody, for joining in. So very quickly, starting on the net flows. I think last quarter, generally speaking, FII flows into India as well as large institutional mandates have been a little tepid. So outside of one institutional mandate kind of reducing its allocation from around about 550 million, 600 million to round about 175 million, 180 million. The rest of the mandates have stayed quite strong. But generally speaking, global allocations to listed equity has been fairly muted over the last 6 to 9 months. Outside of that, obviously, on the alternate side, we've had good flows over the last 6 to 9 months. But I think, honestly, from an AMC perspective also, I think when I look at our net flows of round about, give or take, INR 40,000-odd crores, which is 12% to 15% of the number we've kind of started out with. We started over to INR 2,40,000-odd crores of ARR AUM. So INR 30,000 to INR 40,000 -- INR 35,000 crores to INR 40,000 crores of net flows. I think I would like to still believe our net flows will be broadly broken up as 70-30, 75-25 broadly in the split being in the favor of the wealth business. So last quarter, obviously, the asset management business slightly lopsided because of one partial redemption on the institutional mandate side. But we have a lot of product launches kind of planned out for the next 6 to 9 months, which should average out the flows between the wealth and the asset management side. PMS as a structure, obviously, is a little challenged because I think a purely, purely portfolio management scheme versus, let's say, today, doing the same product on the AR side or potentially on the mutual fund side or even on the SIF side. Those 3 structurally present slightly better better platforms to launch the same product from the purely on the equity PMS side. So while the strategy is alive, while the same set of clients for the same sort of reasons they used to come to the PMS will come in. But most likely, it will find its way into these 3 pool structures as opposed to coming into -- as opposed to come into a PMS. On the cost to income side, I think we've taken 2 or 3 steps. I think, number one, HNI business has kind of come to come to fold fairly well. I think we moved our AUM from around about 600-odd crores to INR 4,000 crores -- INR 3,900 crores, INR 4,000 crores last year. The current quarter has moved from INR 4,000 crores to around about INR 5,100 crores, 5,200 crores. Systems are stable, execution is happening, onboarding is fully digital. Outside of us launching the execution platform on that platform, the platform is extremely stable. We are in a position where today, I think with 65, 70 people, we feel fairly confident. And we will, over the period of next 2 to 3 months, also move our small amount of clients who are between the INR 1 crores -- INR 2 crores to INR 9 crores segment or INR 2 crores to INR 10 crores segment into the HNI piece. I think together with that and the constant organic growth, which has happened in the HNI business, I feel the HNI piece will also kind of not only breakeven, but may even move to a little bit of profitability this year itself. ET Money, we kind of restructured quite a bit over the last quarter. I think on a run rate basis, if I exclude the costs associated with exits, we are now down to round about a INR 3 crores -- INR 3.5 crores, INR 4 crores quarterly loss per quarter. We will -- we've seen INR 7 crores last quarter, potentially see another INR 6 crore, INR 7 crores for the current quarter. But post that by the end of quarter 4, we'll be close to breakeven on the ET Money side. So ET Money together with the HNI piece should definitely help us retract the cost to income by round about give or take, 100, 150-odd basis points and a little bit of operating leverage, both on the alternate side of the business as well as on the wealth management side of the business should hopefully take us on a Q4 basis from 51 to round about 49, 49.5 and potentially for the full year, approximately 100, 150 basis points from where we are today. So that's the picture on the cost to income. On the industry side, I think private credit real assets, private equity as well as the renewables all 4 remain a very, very promising landscape for alternates. I think we've obviously done a lot of work on the first 3, which is the private equity side, the real asset side as well as the private credit side. So I think private credit in India is a very, very interesting threshold. It's obviously a very, very vast industry. It starts out all the way from instruments between 9% to 10%, all the way ranging from 13% to 15% and also moving into some kind of special situation opportunities between 18% to 20%. And then potentially some structured credit opportunities with a bit of fixed income as well as equity linkage, which could be higher. From our perspective, we've really been operating more on the first 2 buckets, which is really the 10% to 11% and the 13% to 15% bucket. The good news there is accidents are practically -- not practically, they have been negligible to 0 over the last 7 to 8 years. So we had a fairly stellar track record in that. Having said that, obviously, we've not kind of ventured into the deep private credit side. And 2 or 3 things which have happened in India where the regulator has been kind of super cautious and rightly and allowed the industry to do extremely well are 2 things. One, obviously, like the rest of the world, I think we really don't have semi-liquid or kind of partial liquid funds. So there's really no schemes which have get a redemption pressure. So in that sense, that's kept the private credit industry going quite well. And secondly, I think just the pure nature of -- we've seen a lot of institutional demand from insurance companies as well as other domestic institutions to participate on the private credit side. Just given the long tenure of the money, they have to manage. The ability to generate that extra 250, 300 basis points over a longer time period is extremely interesting to them. So overall, if you ask me, I think the private credit industry is in a very, very nascent stage in our country. And I think it's over a period of time, I think I would not be surprised if it continues to grow as fast as the private equity industry itself.

[Operator Instructions] Next in line, we have Prayesh Jain.

Karan, 3 questions. Firstly, a broad look at your retentions in this quarter, it's been kind of down across the across the board. And so even if I exclude the carry, I think there seems to be some pressure on retentions, whether it's an AMC or whether it's in wealth management, there seems to be some kind of pressure. So if you could allude as to what are the factors that are kind of driving that? Second question is on UBS. You spoke about ET Money and the HNI segment breaking even. But I would presume that incremental flows coming in from UBS can be a big operating leverage because I don't think there could be a large element of costs associated with those -- with UBS -- UBS mandates. And lastly, on your -- in your previous call, you had mentioned about the RM addition target of taking the RM count to about 400 in the medium term. So would that mean that your cost to income kind of stays elevated? You kind of guided for it to improve by 100 basis points, 150 basis points from the point where we are today. But structurally, how should we think about the cost to income that it stabilizes at the levels that we see in the current year? Or do we see further improvement going [indiscernible]? Those would be my questions.

Thank you. So I'll quickly start with the question on the retention. So I think broadly, retentions are kind of down approximately from 78 to approximately 73, 74 basis points. I think largely out of the 4 basis points, half of that is broadly attributed to carry. So close to out of 4 basis points, 2, 2.5 basis points is really a function of carry recognition, largely on the asset management side and partially on the wealth management side. The remaining 2 basis points is largely a function of the mix of business. So I think on the wealth management side, I think the advisory business has a slightly lower retention than the distribution business. And also the TBR, typically speaking, for no specific reason, but typically slightly lower in Q1, Q2 as compared to Q3, Q4. So those are 2 things kind of impacting the retention a bit. On the ARR side, we're already on the wealth side its just 1 or 2 basis points is largely a function of the mix. And similarly, on the asset management side, it's really nothing much outside of the mix of the business. So I can't for any specific business line itself, we've not seen any reduction in margins. I think advisory continues to be broadly in that ballpark of 30-odd basis points, 30 to 35 basis points on an average 25 to 27 basis points for large mandates and 30 to 35 basis points on an average. Discretionary continues to be in the region of 40, 45 basis points and distribution largely in the region of 65, 70 basis points. So it's really largely a function of mix. So round about, give or take 1 -- 1.5, 2 basis points on the -- the only place where we see a little bit of retention pressure, which we'll kind of keep playing out is on the pure listed side of the asset management business. I think that business kind of will continuously see a little bit of margin pressure for us. Obviously, it's it contributes around about 8% to 9% of our revenue. So that's the only place where I feel there will be a headline decline in retentions. But otherwise, it will be broadly continue, I would give or take, not hazard a guess more accurately than between 70 to 75 basis points on the on the ARR AUM. I think there might be quarters where it goes towards the 70, 71, and there will be certain quarters whereas towards the 74, 75, but it will be between that 70 to 75 basis points. I think on the UBS side, obviously, I think, we started the process of onboarding our funds mutually and referring clients from January to March of the current year. I think we made super progress, would be fairly certain to say that in the coming quarter, we should have some funds launched in both ways. UBS potentially launching some of our funds, and we're launching some of UBS' funds in India and simultaneously also referring clients to each other. I think we've got a certain AUM number of -- a fairly conservative number but of -- in the region of $500 million to $600 million, hopefully, to get kind of exchange between both the organization [indiscernible] the first step rather than trying to look at cost to income and trying to see profitability numbers out of it. But I think in both [indiscernible] that we are able to kind of add value to our platforms. That's really where the last step is. We're fairly confident over the next 3 months, we'll start [indiscernible] money actually changing. And similarly, the end of maybe a year from the time we started, which is Jan to March, we'll definitely be close to some of the internal targets we've kind of set out for ourselves. On the RM count, we currently obviously wanted to add round about -- as you rightly said, move towards the 350 to 400 RM target number. I think we broadly got a target number of 9,000 to 10,000 families as compared to the 4,100 families we have today over a 3-year time period. Now all things being equal, 10,000 families would need round about 300 to 350 RMs to manage. Today, potentially, that means we add around about 30 to 40 RMs a year over the next 3-odd years. Obviously, some internal junior RMs will also keep escalating and kind of move up to become senior RMs. So 350 to 400 senior RMs over a period of time would need to around about 30 to 40 RMs to get added. I think, to be honest, that's one part of our business on the wealth management and ultra high net worth wealth management side which typically kind of -- RM's relationship managers are able to kind of work within the system extremely well and potentially breakeven in our systems substantially faster than most other platforms. So in our core cost to income, if I look at our core stable Ultra HNI cost to income, typically tends to be in the region of 45-odd percent. We always have assume 100, 200 basis points for expansion and for new people to come in and productivity to kind of get settled. And so there, we are fairly convinced about being at the 44, 45 mark long term and 46, 47 mark depending on how recruitment pretty much happen. That amount of operating leverage is built in because every year, there is a cycle of people who joined last year who are becoming productive this year. So in some sense, it's a perpetual hiring curve. So I think on the Ultra HNI side, really, I think the cost to income remains in that 46, 47 zip code, including some of the hiring we have to do. The bridge between the 50, 51 to the 47 number is really not coming out of the -- or not getting subtracted out of the hiring on the Ultra high net worth side.

Just one follow-up, Karan, on the UBS thing, if you can delve some bit on the unit economics of the business that you would have in mind, if you kind of reach the 500 million to 600 million asset transfer between the 2 entities, what kind of revenue potential -- or does it operate at a similar cost structure, what we have today? How should we think about this if it gets added to your AUM in the next...

Honestly, I wouldn't want to kind of just go absolutely deep down from a unit economics perspective. But I think at a headline level, at a very headline level, it's fair to say that it's mutually very accretive for both firms at whatever retention we are able to do business because honestly, I think from an India perspective, we have a very strong platform already built out. And I think UBS from our collaboration perspective already has a large platform build-out. So obviously, doesn't disproportionately add to our costs. But obviously, I think from a retention perspective and a pricing perspective, the market will discover it. And I definitely see it being fairly accretive to the P&L. But exact terms of retentions and unit economics, I would want to kind of wait and see how it kind of plays out over the next 6 months.

Next in line, we have Aegis Lakhani.

Karan, congrats on the numbers. Karan, just one question. I wanted to understand the yield that your net new inflows typically have?

Again, it just depends on the kind of net flows. Obviously, if it's pure advisory then obviously, it will be in the region of 30 to 35 basis points. If it's discretionary, it will be 45 to 50. If its broad distribution, would be 60 to 70 basis points.

Okay. And since you're dealing with very large clients here, is there any element that probably it's a little more subsidized upfront and then it sort of builds out or there's nothing of that as...

I think relationships definitely built out, I think, needless to say, like in most businesses, I think at a starting point, we are always facing a little bit of competitive pressure. But that competitive pressure eases out as the relationship kind of goes deeper and obviously, our own ability to offer the entire platform to the client becomes larger and larger. So obviously, I think clients end up doing a lot of work with us on the overseas platform on the lending platform, sometimes on the banking side. So obviously, I think the ability to kind of go deeper both vertically and horizontally with the client becomes larger and larger. And sometimes, if there are large mandates, obviously, we have to kind of be slightly flexible on the fee. But I think we've done a fairly decent job. And I think at scale to build an advisory practice with this retention has not been that easy because, obviously, I think building out a product model is is relatively sometimes easier, but scaling that stuff up. But on the advisory side, the flip is, obviously, I think it's tougher to build out the service model and even tougher to charge fees. So I think you have to kind of combine both of that. And obviously, it has a lot of benefits because it has the ability to scale up faster.

[Operator Instructions] Next in line, we have the Dipanjan Ghosh.

So a few questions from my side. First, we are obviously seeing a very strong store number in the 360 One Plus segment. I mean basically the overall wealth segment and not for this quarter specifically, but if I look at the past few quarters after the attrition-related issues kind of got sorted. Now I think at the start of the call, you mentioned that a lot of it had to actually do with the new teams that have been onboarded. So I just wanted to get some sense of incrementally, what is the contribution of flows coming in from these large teams which you have onboarded? And because you have aspirations of scaling up the RM franchisee and the client franchise to that 9,000, 10,000 levels, I mean, do you expect the contribution from new clients or new wallets to actually be a relatively higher portion of your flows in the wealth segment compared to, let's say, what you used to see on a run rate basis? So that's the first question. The second is on the core transactional revenues, which is ex of B&K. I think on that part of the business, I mean, despite being a relatively weak and volatile quarter, you're still kind of clocking around that INR 140 crores, INR 150 crores, which historically used to be towards the upper end of your guidance of INR 100 crores, INR 150 crores per quarter. That's on the core part. Now in terms of the pipeline on the TBR side, do you see any large transactions? Like last quarter, you mentioned there were some high-yielding debt-related transactions. I mean do you see any large transactions in the pipeline over the next, let's say, 3 to 9 months, be it on the real asset side or on the private credit or something out there? And 2 data keeping questions, I think a query on the cost part, is there around INR 12 crores to INR 13 crores of exceptional cost that is setting out in this quarter? Because if I look at your wealth overall expense, it's around INR 354 crores. But in the presentation, you have mentioned that your operating PBT, excluding some exceptional cost items, I mean, in that case, the cost is like INR 342 crores. But this difference of INR 12 crores, INR 13 crores, is it some like initial payouts to acquire some teams or build up the [indiscernible] business? Yes, those are my questions. I also have a small question, which I can ask at the end.

Yes. I'll start off with the color of flows. So I think that's a great question. And to be honest, I think what gives us the highest amount of encouragement is that we're seeing the color of flows really do well at the absolute base level unit level, which is number of clients. I think honestly for us, that's the asset test. And I think what gives me the most amount of excitement is if I just go back maybe 36 months back, number of clients with more than INR 10 crores with us would be a number somewhere in the 1,800, 1,900, 2,000 kind of number. And that number obviously today is just above that 4,000 kind of number. So that's the biggest opportunity. And I think eventually, that's what really adds the AUM because of this 4,000 becomes 8,000 to 10,000 because most of these clients at INR 10 crores, INR 20 crores would be maybe 15%, 20% wallet share with us. And obviously, what happens is the ability for us to -- as a full-fledged wealth platform, the ability to really see [indiscernible] and kind of increase our order share is the highest. So the ability to really kind of canvass these clients from INR 4,000 to INR 5,000 to INR 6,000 to 8,000 is going to be one defining big number for us from a wallet share perspective. If I was to specifically look at last 3, 4 quarters, I think it's kind of the same. It's, a, I would say, a number of clients; b, obviously a slightly higher wallet share or slightly higher market share at the point of the client having a liquidity event. And thirdly, I think our own ability, together with the help of all our relationship managers, the advisory team and as well as the product team to be able to kind of increase our wallet share with the client as time goes by. And I think the third one is really, really important because most of the clients we end up dealing with eventually end up with 2 or 2.5 advisers. I'd like to call it 2.5 because there are 2 advisers the client is dealing with on a day to day basis and another half adviser is always kind of looking around. Initially, most advisers start -- the most clients start with 4 to sometimes even 5 advisers. And our ability to really be part of that too as opposed to kind of starting as 1 out of the 4 or 5 is really what has been very, very distinguishing. So I would say it's going to be a combination of both at the base level, we have to have the right number of families and as we scale up, I think we have to ensure that we have the right quantum of wallet share. The transaction question is also great. I think, to be honest, we've been trying to improve that over the last period of time. We've come off from a place of having a lot of kind of lumpy transactions, sometimes on the fixed income side, sometimes on the private equity side. With the co-investment regulations in place and our ability to raise raise money in the PMS and the CIB vehicle, for co-investment for stand-alone transactions, it really kind of gives us a better vehicle to be able to collect long-term money even for single instruments rather than going out and doing syndication in those kind of transactions. So that necessarily means a lot of those assets will get converted to ARR assets rather than coming in the form of transaction brokerage assets. Obviously, it reduces the upfront revenue, but from a business perspective, adds a lot of lot of good color over the next 5, 10 years because it allows us to be able to potentially charge a fee as well as charge carry over a longer period of time. So I think just the inherent ability to develop to have individually large transactions on the TBR side is becoming lower and lower. And I think if I was to look back over the last 4 quarters, maybe we had one transaction like this in Q4 last year. But going forward, these lumpy transactions will become lower and lower. We, at the same time, worked very hard, like you rightly said, to ensure that while our transaction brokerage income, doesn't have lumpy transactions yet from a number perspective, doesn't change dramatically. I think we've worked out to try and kind of get it to a consistent INR 125 crores, INR 150 crores number. We opened ability to potentially increase it by a modest 10% to 15% as you go along over the next 2 to 3 years. And in that regard, actually, I think the biggest line items to look at in that sense, obviously, will be a function -- will be our own ability to do 2 or 3 things. One, obviously, I think we've built the equity brokerage franchise substantially better than what we had built earlier. I think together with B&K, together with our ultra-high net worth brokerage practice, today, it's safe to say around about I think give or take some number between INR 23 crores to INR 25 crores a month effectively, INR 75 crores of quarter of equity brokerage on the listed side is something which we can definitely look at. Obviously, this number can go down plus/minus 10% depending on the markets. But it has no lumpy nature where that INR 300 crores, INR 325 crores becomes 0. It can go down plus, minus 5%, 10% or it can go up plus 10%. But it definitely doesn't have that kind of lumpy nature. With the integration of the B&K research into our high net worth fold, we are fairly confident of being able to make this one of the highest growing kind of segment line items within the transaction and within the TBR business. I think just given the size of our business, that INR 325 crores, this broadly represents less than 7% to 8% of our revenues. And for any wealth business across the world, there are always clients who like to buy stocks directly. I would like to believe this should be around about 10% to 15% of our revenues as we go along. Overall, TBR will continue to be still be below the 25% number, but this should definitely see an increase from 8% to 10% to 12% to 15%. Then, obviously, we got brokerage on fixed income, brokerage on unlisted equity, brokerage on fixed, brokerage -- a little bit of brokerage on real estate, insurance. And finally, we'll have a little bit of income on the merchant banking side. I think all these 3 things, all these 4 things put together should end up somewhere in that ballpark number of INR 125 crores, INR 150 crores, INR 160 crores a quarter. And hopefully, we can kind of keep pushing that up by organically by 15% to 20% a year. And in that sense, as the overall ARR AUM grows at a slightly higher clip than the TBR revenue, the TBR revenue stays in that ZIP code of 15% to 20%, 25%, maybe 20% of overall revenues without actually increasing dramatically in absolute terms, but definitely increasing in terms of quality. The last -- Yes, the last point on exceptional cost, I think that INR 12 crore, INR 13 crores is the exceptional cost is just related to ESOPs relative to the acquisition. So that's the reason it's kind of put out there. So that's really, in some sense, is not necessarily kind of on a constant basis, but that's related to the B&K acquisition. That's about it.

Got it. And Karan, just one small question. I mean, historically, you mentioned that the carry will stabilize around the 4 to 6 basis points of recurring [indiscernible] on a more structural basis. But even if you look at for this quarter, it seems a little bit higher of -- towards the higher end or maybe a little bit higher than the higher end of the guidance. So in terms of visibility over the -- at least for the fiscal year '27 or '28, how do you see that shaping up?

I think it's still around 4 basis points is the right number to look at. So I think just if I look at the entire alternates AUM, we are approximately at INR 58,000 crore, INR 59,000 crores or just less round it off to INR 60,000 crores for a lack of a better word. I think INR 60,000 crores to around about 4 basis points, INR 240-odd crores for the year is broadly what I would look at. Sanjay, are the numbers, right?

Yes, yes, correct. Overall impact is about 4 basis points in this quarter.

3 to 5 basis points is really what you can look at.

Although AIF alternates...

Yes, yes, absolutely.

[Operator Instructions] Next in line, we have Sidarth.

Just wanted to understand 3 things. One, could you -- could you give some color on the trajectory that you're seeing on HNI and how much of the distribution AUM growth is coming from HNI flows? You also mentioned about ECM mandates sort of becoming meaningful. If you could give some color around how that is shaping up and how that team buildup is coming in and how much of that TBR revenue is coming from ECM, how should we think of that going forward? And the third one was on the synergies included to -- from the B&K acquisition. If you could give some quantification and some color on the nature of those synergies. Those were my 3 questions.