Key Takeaways
- Gold & silver ETFs lifted blended yields by 40bps, now 14‑15% of total AuM.
- Core PAT projected to grow at a 17.4% CAGR through FY28, driven by higher yields and lower commissions.
- Valuation multiple nudged to 35x FY27‑28 core EPS, pushing target price to ₹1,000.
- Net equity inflows surged to 10.4% YoY, signaling strong market‑share gains.
- Competitors are scrambling to replicate the ETF‑centric model; early movers stand to win.
The Hook
You missed the gold rush in ETFs, and it just cost you a potential boost.
Nippon Life India Asset Management: Quarterly Power Play
Prabhudas Lilladher’s latest research shines a spotlight on Nippon Life India Asset Management (NAM). The firm delivered a stellar quarter, outpacing the Prabhudas benchmark by 1.9% on revenue and 2.7% on operating expenses, translating into a 4.5% uplift in core income. While equity AUM grew modestly at 5.2% QoQ, the real driver of performance was the surge in gold and silver ETF assets.
By the end of January 2026, gold‑plus‑silver ETF AUM jumped to ₹1 trillion from ₹688 billion a month earlier – a 45% month‑on‑month explosion. This segment now accounts for roughly 14‑15% of NAM’s total assets under management, turning a niche product into a core earnings pillar.
Why Gold & Silver ETFs Are Redefining Yield Benchmarks
Traditional equity‑focused asset managers have long wrestled with thin yields, especially in a low‑interest‑rate environment. NAM’s strategic tilt toward precious‑metal ETFs, which carry yields of 60bps (gold) and 35bps (silver), lifted the blended yield by 40bps to 40.2bps. The higher yield isn’t just a number; it directly improves net income because commission costs on ETFs are lower than on conventional equity funds.
For investors, this means a higher “net yield” – the after‑cost return you actually keep. In simple terms, if an equity fund offers a gross yield of 80bps but charges 30bps in commissions, the net yield is only 50bps. By increasing the proportion of high‑yield, low‑cost ETFs, NAM squeezes more profit out of every rupee of AUM.
Sector Ripple: How Competitors Like Tata and Adani Are Responding
The ripple effect is already evident. Tata Asset Management has begun a modest rollout of gold‑linked ETFs, while Adani Capital is testing silver‑backed products in select markets. Both firms cite NAM’s performance as a catalyst for their own product development roadmaps. However, the speed of execution matters – NAM’s 45% MoM ETF growth gives it a first‑mover advantage that competitors will struggle to match without aggressive marketing spend and distribution partnerships.
Historically, when a major player gains market‑share in a high‑margin niche, peers either consolidate or attempt to duplicate the model. The Indian asset‑management landscape saw a similar pattern when ICICI Prudential expanded its hybrid fund suite in 2020, prompting a sector‑wide shift toward income‑oriented products. Expect a comparable wave of ETF launches over the next 12‑18 months.
Valuation Upgrade: What the 35x EPS Multiple Means for Your Returns
Prabhudas Lilladher upgraded NAM’s multiple on September‑27 core EPS from 34x to 35x, lifting the target price to ₹1,000 from ₹930. A higher multiple reflects investor confidence in sustained earnings growth and improved margin profiles. To translate, a 35x multiple on an estimated FY27 core EPS of ₹28.6 suggests a valuation of roughly ₹1,001 per share.
For a long‑term investor, this multiple indicates that the market is pricing in a premium for the firm’s yield‑enhancing strategy. If NAM can maintain its 17.4% CAGR in core PAT, the upside beyond the target price could be significant, especially when the broader market is still discounting asset‑management earnings.
Investor Playbook: Bull vs Bear Scenarios
Bull Case: The ETF momentum continues, AUM expands to ₹1.5 trillion by FY28, and net yields climb to 50bps. Lower commissions and higher yields push core PAT CAGR to 20%, justifying a multiple bump to 38x. Target price breaches ₹1,200, delivering a 25% upside from current levels.
Bear Case: Regulatory headwinds tighten ETF exposure limits, or a sharp metal price correction erodes ETF attractiveness. AUM growth stalls, yields revert to 30bps, and core PAT CAGR falls to 12%. Multiple compresses back to 32x, pulling the target price down to ₹850.
Given the current data, the balanced stance remains a “Buy” recommendation, with a focus on monitoring the ETF share of AUM and metal price trends.
Bottom Line for Portfolio Builders
For investors seeking a blend of growth and income, NAM’s ETF‑centric approach offers a compelling narrative. The combination of higher net yields, expanding market share, and an upgraded valuation creates a multi‑layered catalyst that can translate into tangible portfolio upside. Keep an eye on the gold‑silver ETF share of total AUM – a rise above 15% could be the next trigger for price acceleration.