360 One Wam Ltd

NSE:360ONE

Q1-2026 Earnings Call

[Anil Mascarenhas, executive]

[Audio Gap]. [Operator Instructions]. Please note, this conference is being recorded. On the call today, we have with us Mr. Karan Bhagat, Managing Director and CEO; Mr. Yatin Shah, CEO of the Wealth Business; Mr. Anshuman Maheshwary, COO; and Mr. Sanjay Wadhwa, CFO.

I now hand it over to Mr. Sanjay Wadhwa to take this conference ahead. Thank you.

[Sanjay Wadhwa, executive]

Thank you, Anil, and a very good evening to all the participants. Starting with the macros. Indian equities after facing some sharp volatilities in the last 2 quarters, witnessed a rebound in Q1 FY '26. While geopolitical events could influence broader markets in the near term, structurally, we continue to remain bullish about India's long-term growth story, which will act as a tailwind for India's wealth and asset management sector.

Before I get into the business and financial numbers, I just wanted to highlight that the consolidated financials for the quarter include full quarter financials of ET Money and post-acquisition financials of just over a month for B&K. Our total ARR AUM increased to INR 2,87,317 crores, up 30% year-on-year. This growth was supported by strong net flows at INR 20,950 crores. The flows also include ARR net flows of INR 18,266 crores as a result of the acquisition of B&K Securities.

The growth in our client base continued to be very healthy. Presently, we have 4,200 clients with a total AUM of INR 10 crore plus who account for 95% of wealth AUM, excluding custody. This includes approximately 700 corporate clients that we have onboarded as part of the B&K transaction. Our ARR revenue for the quarter grew 35.9% year-on-year at INR 511 crores, led by strong growth in assets across business segments. Our ARR revenue as a percentage of total revenue from operations stood at 77% Retention of ARR AUM also remained strong at 79 basis points and 70 basis points ex of carry. Total revenues stood at INR 725 crores for Q1 FY '26, driven by higher ARR revenue and other income. Total costs are up 32.7% Y-o-Y to INR 351 crores in Q1 FY '26. The cost-to-income ratio stands at 48.4% as compared to 50.7% in Q4 FY '25.

As explained earlier, the cost for the quarter also include full quarter cost of ET Money and post-acquisition cost of B&K. We expect gradual improvement in this metric over the coming quarters as we scale up and drive synergies from new business initiatives and teams. We are very happy to report that the company recorded its highest ever quarterly PAT at INR 287 crores, an increase of 18% year-on-year. The tangible ROE is at 19.6% in Q1 FY '26. This ratio is expected to improve in the coming quarters as additional capital deployed in our lending and alternate businesses in FY '25 begin to reflect in earnings.

With that, I would like to hand over to Anshuman to cover key business and strategic highlights.

[Anshuman Maheshwary, executive]

Thanks, Sanjay, and good evening, everyone. Taking Sanjay's comments on the overall business numbers ahead, I would like to share updates on our key strategic initiatives. As you are aware, in recent quarters, we undertook inorganic measures to strengthen our core business model as well as create future optionality.

These initiatives are expected to enhance our core tenets and help us benefit from the significant wealth and asset market opportunity in India. Firstly, on B&K, we are happy to announce that the deal has been successfully consummated and all requisite approvals were received on May 27, 2025. Post-merger integration of people and processes has already begun. Mr. Saahil Murarka, Promoter and MD of B&K Securities has joined the 360 One leadership and will continue to spearhead the business along with Mr. Sanjeev Mohta and the high-caliber team at B&K. We are also excited as Saahil joins the 360 One WAM Board. With B&K, we are now better positioned to build out a robust, sustainable broking and transactional platform within our wealth management franchise.

Secondly, our conviction on the HNI business continues to grow with over 30 RMs, 250 clients and INR 1,500 crores of AUM tracking at over 90 bps of retention, we are now well poised to drive the scaling up and see that happen over the next few quarters. While 360 One's broader platform and core client-centric wealth management ethos will continue to effectively support the growth of the HNI business, we are also excited to take numerous technology-related developments done for this segment to our UHNI clients as well as our core senior bankers.

Thirdly, on our strategic collaboration with UBS, we are happy to share that we have received all regulatory approvals to complete the transaction. As shared earlier, the strategic collaboration has 3 interrelated components: business collaboration across geographies and business segment; UBS's stake in 360 One; and integration of UBS India's Wealth Management business with 360 One WAM. As we speak, supported by the top management from both firms, we are working towards a smooth migration and integration while creating expressways globally for a strong international collaboration. This collaboration brings together 2 powerhouses in the space of wealth management to create a platform that is truly without parallel in the country.

This exclusivity [ digest ] not just by the business opportunity, but also by shared beliefs in values, ambition and a client-first philosophy. UBS's global investment expertise, research and access will improve our ability to serve the cross-border needs of our clients as well as enhance our wealth management proposition further. Fourthly, on ET Money, with the firm becoming part of 360 One WAM, we have jointly laid out an exciting strategic agenda to go deep into the mass affluent segment and drive growth and higher monetization of the rapidly expanding client base.

We will continue to share more on ET Money as we go through the next few quarters. On the asset management front, the continued focus on deepening our channel presence in the domestic market, specifically through MFDs is delivering positive results. The pipeline of new funds across asset classes as well as new international institutional mandate pipeline remains strong. Global institutions continue to be interested in exploring new investment strategies with us driven by the India growth story and our ability to innovate and co-create strategies with them. Such tailwinds supported by 360 One assets, strong track record in managing prestigious institutional clients gives us confidence towards the next phase of growth for the business.

Also, we plan to extend our alternate strategies to a larger set of client base as well as institutional clients across India as well as globally in the coming quarters. I think apart from the core business areas, we continue to take exceptional pride in the external recognition received by our wealth and asset management businesses. We continue to be very proud of the awards received in the last quarter and over the last few years.

We are also very proud to be recognized as a Great Place to Work 2025. I would take this opportunity to thank all our partners and stakeholders who have restored this trust and confidence in us through our journey.

With that, I'd like to hand it over to Karan and Yatin for Q&A.

[Anil Mascarenhas, executive]

[Operator Instructions]. First in line, we have Mohit Mangal.

Mohit, can you hear us?

I invite Lalit Deo.

Hello? Yes, go ahead.

[Lalit Deo, analyst]

AM I audible?

[Anil Mascarenhas, executive]

Yes.

[Lalit Deo, analyst]

Can I go ahead?

[Anil Mascarenhas, executive]

Yes, go ahead.

[Mohit Mangal, analyst]

Yes. So my first question is on net flows. So basically, you have mentioned in your presentation that about INR 18,000 crores is basically coming from B&K. So just wanted to understand, basically, is it sitting only in the mutual fund distribution business number?

[Karan Bhagat, executive]

Meaning -- no, sorry, just to kind of clarify, I think the INR 18,000 crores of net flows is relevant to the Mutual Funds business. And the rest of it, the TBR, which is the custody stocks and so on and so forth is not referred into this category. This is only for the ARR AUM.

[Mohit Mangal, analyst]

Only for the ARR. Okay. And so basically, how do we see the net flows for the entire financial year '26? I mean you have given the guidance of INR 130,000 crores, INR 135,000-odd crores. Do we stick to that?

[Karan Bhagat, executive]

No, I think we continue to be focused on our strategy of getting 12% to 15% of our net opening AUM as net flows for the year. We started out the year at around about INR 165,000 crores, INR 170,000 crores of opening ARR AUM.

So around about 12% to 15% of that is what we would focus on getting as net flows. And the quarter 1 has been quite robust in terms of flows. I think we've seen the Asset Management business do around about INR 1,000-odd crores of net flows. The Wealth Management business also had good flows. It was a little bit tempered with the INR 1,700 crores of flows because we had a little bit of net outflows also coming from the departure of 2 of our teams. And that kind of impacted the flows broadly by around about INR 3,500 crores to INR 4,000 crore number for the quarter. And this is the second quarter, I think, since the departure of the teams.

We expect between the 2 teams, as pointed out earlier, around about 5% to 6% of the AUM to be lost. So INR 4,000 crores of AUM INR 3,500 crores, INR 4,000 crores of net AUM is the outflow. And we've got another INR 1,700 crores of net flows. So overall, with the induction of new teams, we had a good quarter of INR 6,000 crores of net flows. On the wealth management side, it sounds a little tempered for last quarter of being around INR 1,700 crores for that reason. In addition, asset management has seen around about INR 1,000-odd crores and plus the B&K.

That broadly kind of sums up the total of the net flow number.

[Mohit Mangal, analyst]

Understood. Second question is on the ET Money. So basically, we have seen that this kind of business is kind of bleeding. But I suppose that we have got good plans for this in '26 as well as '27, it will be like net positive for us in the bottom line as well?

[Karan Bhagat, executive]

I think we made a lot of progress on ET Money. I think when we took on the business, it was kind of having a broad loss of around about INR 5 crores a quarter, INR 4.5 crores to INR 5 crores a quarter. We've got it down to nearly INR 6 crores -- INR 5 crores a month. We've got it down, so now down around about INR 50 crores to INR 60 crores annually.

Now it's down to around about INR 6 crores to INR 7 crores a quarter. So I think over the last 8 to 9 months, the business has made significant progress. I think we've also decided and charted out a very clear growth map and strategy, which we are fairly confident about. And business from a moat perspective, continues to have 3 phenomenal moats. I think having technology to execute at scale; b, having focused only on financial advisory and wealth management as opposed to going down the brokerage path; and thirdly, continues to be very, very rich in content and SiPs.

So I think how do we kind of monetize that is something which we've been working on over the last 6 months. And simultaneously, we've been able to kind of get the burn down from around about INR 55 crores, INR 60 crores a year to around about INR 25 crores.

[Mohit Mangal, analyst]

Understood. So lastly, on the yields, I think we had a very good quarter in terms of yields as well. But I believe that -- I mean, yield kind of yield will go down, right? By 1 or 2 basis points maybe over the next 2 to 3 years. I think that -- is that a fair assumption?

[Karan Bhagat, executive]

[ Of course], I think yield will go down by 2, 3 basis points. But I'm quite confident, like I said earlier, about the headline yields being maintained in different line items. But I think the mix of business will grow slightly differently. So I think distribution will continue at that 75, 80, 85 basis points, advisory at that ballpark range of 30, 35 basis points and discretionary broadly at 40, 45 basis points and NBFC at that broad 350, 400 basis points. But the contribution of each of these lines on a relative basis may change a bit.

Advisory and discretionary might become slightly more in percentage terms than distribution. And therefore, effectively, that will cause a compression of around about 2 to 3 basis points on the yield. So while the headline yield numbers might not change dramatically, I think overall on the wealth management ARR we might see a little bit of compression of 2 to 3 basis points basis the mix of business.

On the asset management side, so the only place where I see a little bit of reduction in the headline yield is on the asset management side on the listed piece. I think we've built a fairly robust business of nearly INR 50,000 crores of AUM, and we've been able to maintain nearly 60, 62 basis points of blended yield. And I think that's a place where I think as we incrementally add AUM relative to the mark-to-market and the yields might come down by 3 to 4 basis points. On the alternate side continue, I think the yields will continue to be in that ballpark range of 85, 90 basis points to 95 basis points, including the carry income.

So overall, I think on the asset management side, again, not a big compression yield, again, 2, 3 basis points, but more coming out of the listed side than the alternate side. And then obviously, it's a function of a little bit of the mix of the business. Obviously, if we grow a little bit faster on the alternate side, there won't be any reduction in yields. On the other side, if you go faster on the listed side, there may be a little bit of reduction in the yields. So while I think if I just look at the 6, 7 main pillars of business, I don't see a reduction on the headline yields, but a mix of the business will result in a reduction of 2 to 3 basis points.

[Mohit Mangal, analyst]

Understood. Sir, my last question is in terms of attrition. I think you have mentioned very, very categorically that we have lost some bit of AUM. But I think we have kind of hired from the competition as well. And so the net impact should be kind of low, right? And over the next 2 to 3 quarters, we would see some kind of a bump up in the AUM growth by hiring more from the competition?

[Karan Bhagat, executive]

Yes. So I think I won't say there's no impact. There's always impact of change, okay? I think that we have to recognize. And at the end of the day, we are in the people business and people are our biggest assets. Having said that, obviously, a little bit of change in attrition is inevitable, right?

As a firm for the last 15 years, we've been able to kind of really serve as a phenomenal platform for our people to grow. And I think we continue to work tirelessly 24/7 to ensure that we provide the best platform for all our employees to take to clients. And while we are able to match ambitions and aspirations of most of our people, sometimes some people have to kind of move on. And while we kind of respect that, we've been able to retain more than 90%, 95% of our entire senior sales force, resulting in a fairly solid AUM growth as well as a very low attrition number.

It's the first time over the last 1 year, we've seen some attrition. And that's obviously led to, as I said earlier, around about a 4% to 6% potential loss in AUM. Having said that, it's obviously opened up our eyes to all the talent, which has kind of got built up in the industry over the last 10, 15, 20 years. I think there's a lot of good talent out there, and we've really worked hard over the last 6-odd months to be able to attract the best talent. And we've been very, very successful. We spent a lot of time in meeting people. A lot of -- at least 3 or 4 very large teams have already joined us. And we are at the cusp of potentially seeing 3, 4 more large teams joining us over the next 3 to 6 months.

So it's something which kind of a little bit continues here and there, [ they're ] left to choice. I wouldn't want a single person to go. And if possible, we could recruit the entire wealth management industry, what obviously can't happen. And broadly around that, I think I wouldn't say we would want to lose anybody, but we are in a comfortable position in terms of a little bit of plus and minus. It's a stop and a go, and that has its own kind of implications. But eventually, as you rightly pointed out, it becomes a bit of a rolling curve, and we should be able to add much, much more AUM than we potentially lose out of attrition in the short term.

[Anil Mascarenhas, executive]

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

[Nidhesh Jain, analyst]

Yes. I have 2, 3 questions actually. So first question is net flow -- net outflow that we are seeing of INR 3,000 crores to INR 4,000 crores. When do you think it will stabilize and neutralize in coming -- over the next 2, 3 quarters?

[Karan Bhagat, executive]

Nidhesh, maybe if you can ask all 3 questions, it will make it easier for me to answer and maybe speeding up things a bit here.

[Nidhesh Jain, analyst]

Yes, there is also an increase in yields on the lending book and AIF in this quarter. So any particular reason? And third is, if you can give some color on the transactional-based revenue for the quarter in terms of breakup in direct equity, unlisted B&K and debt? That would be useful.

[Karan Bhagat, executive]

Thank you. No. So I think to start off, I think, obviously, the impact of AUM moving out is slightly front-ended. I think that's -- I wouldn't say it's -- typically, I would kind of split it between 2 to 3 quarters. I think a couple of quarters has gone. So in our own assessment, we are towards the second half of the last quarter of net outflows. From a perspective of being able to kind of predict it to perfect perfection, obviously, very difficult. But I think it's fair to say that large majority of it is already done.

In terms of the quality of the transaction income, and then I'll come to the yields, the quality of the transaction income, obviously, I think we are working very hard to ensure that our transaction income is as close to being repetitive as possible as opposed to being kind of cyclical. And as we work hard to grow our transaction income from around about INR 550 crores, INR 600 crores to around about INR 1,000 crores over the next 2, 3 years. I think in that respect, I think building a very strong research-based equity brokerage platform for both institutional, corporates, family offices as well as ultra-high net worth [ brokerage ] is very important.

I think today, that number for us, if I kind of add both B&K together with the ultra-high net worth brokerage platform we have is around about INR 270 crores, INR 280 crores. I think we hope to kind of build that and grow that by at least 20%, 25% every year for the next 3, 4 years. In addition, obviously, you've got the other asset classes, including fixed income, debt, bonds, unlisted equities, a little bit of real estate insurance, which kind of gives us the ability to add the remaining INR 300 crores, INR 400 crores of transaction income.

So overall, while I think transaction income has been super healthy over the last 3, 4 years, I think our ability to diversify across asset classes and be able to toggle across multiple client segments will allow us to kind of grow that in a responsible way. And we continue to work very hard to ensure that our transaction income can be on a steady-state basis, around about the INR 250 crore number on a quarter-on-quarter basis over the next 2, 3 years. And while we build that, we are also kind of very conscious of the fact that we would like to maintain our transaction and brokerage income at around about 20% of our total income.

So I think that's the broad principle on the transaction and brokerage side. In terms of the increase on the yields on the AIF and lending, obviously, the lending has a little bit of an impact of the increase on yields on account of the capital raise last quarter. And that obviously kind of will come back from a compression of yield perspective as the book kind of builds up. On the AIF side, yields have been kind of fairly steady, nothing super phenomenal, just a mix of assets. I think a little bit more increase in yields largely on account of the larger amount of commitments coming in on the alternate side. So I think the drawdowns have kind of started coming in, and that's kind of increased the yield a little bit.

[Nidhesh Jain, analyst]

Sure. Just one follow-up on TBR. What is the revenue from NSE, et cetera, in this quarter, NSE transaction?

[Karan Bhagat, executive]

We don't really disclose revenue on a transaction-by-transaction basis, but there's nothing lumpy from an NSE or any of these. So there's nothing lumpy from a TBR perspective. I think there's no single transaction which contributes more than 10% to 12% of our TBR revenue.

[Anil Mascarenhas, executive]

Next in line, we have Prayesh Jain.

[Prayesh Jain, analyst]

Karan, just on this outflow on the lending book, what was the reason for that?

[Karan Bhagat, executive]

Nothing specific, honestly. I think lending book will come back this quarter. We had a couple of -- actually a couple of large loans against a few collaterals got refinanced at slightly lower rates. So I think that's about it. But -- and the loan book is steady. I think we have our own space in it. And very quickly, I think it will come back to its own base.

[Prayesh Jain, analyst]

And on the retention on the lending book, do you think that we would be back to something like 5.3-odd levels what we used to...

[Karan Bhagat, executive]

Maybe 4.7%, 4.8% to 5-ish. We've also kind of come off of a cycle where we were borrowing a little bit more expensive. I think that's also come off for us a bit. We are able to borrow at substantially better rates now.

And I think we also have kind of ended up raising a bit of capital. So I think overall, we feel comfortable with that number. In the shorter end, obviously, a little bit of compression, but I think it may not be 5.3%, but definitely around that 4.8% to 5% ballpark.

[Prayesh Jain, analyst]

Okay. And last question, B&K and UBS numbers would start getting reflected from 2Q onwards?

[Karan Bhagat, executive]

So B&K is reflected for 1 month, I think, 35 days. So that will start getting reflected from the second quarter fully. UBS numbers, I think we've kind of got all the approvals in over the last 2, 3 days. So I think there are certain other CPs to complete the transaction, which in natural course will take another month or so. So I think effectively, UBS, not maybe this quarter, but the next quarter, B&K fully in this quarter.

[Prayesh Jain, analyst]

But B&K entirely would be in transaction in this quarter? Or is there anything else also?

[Karan Bhagat, executive]

No, There are 2 elements of income...

[Prayesh Jain, analyst]

Corporate treasury.

[Karan Bhagat, executive]

Yes, corporate treasury. So corporate treasuries also kind of has, again, small 2 elements. It has an element of ARR, which is on the mutual fund side. And there's a very small amount of bond brokerage also. But I think B&K on the ARR side out of its total revenue would be adding around about 20%, 25% of ARR revenue of its total revenue.

[Anil Mascarenhas, executive]

Next in line, we have Sanketh Godha.

[Sanketh Godha, analyst]

Karan, you said that INR 1,750 crores is the actual flow happened in the current quarter, and you said 12% to 15%, which translates into INR 20,000 crores to INR 25,000 crores for the full year. So when you said INR 20,000 crores to INR 25,000 crores, it is like-to-like INR 1,750 crores, right? That's the way I need to see wealth ARR net flows to play out in the current year?

[Karan Bhagat, executive]

No. So as I said earlier, I think INR 165,000, INR 170,000 crores to 12% to 15% would be INR 20,000 crores to INR 25,000 crores on the wealth management side. We opened the year of at around about INR 75,000 crores, INR 80,000 crores the asset management side. So take another 12% to 15% of that, which is effectively INR 9,000 crores to INR 1,000 crores. So you add the 2, you effectively end up at around INR 27,000 crores, INR 28,000 crores to INR 34,000 crores, INR 35,000 crores, so that's the total of the ARR AUM we aim to target.

On the wealth management side, therefore, we need around about INR 5,000 crores, INR 5,500 crores on a quarterly basis, on a run rate basis, net flows. I think as I was explaining earlier, I think we did on a normal course basis, around about INR 6,000-odd crores of net flows this quarter. INR 6,000 rores, INR 6,500, it's kind of got partially set off with gross net outflows of -- I don't want to call it exceptional, but INR 3,500 crores, INR 4,000 crores of net outflows with 2 teams kind of moving out.

And I think that stays max for another quarter. But we, hopefully, quarter 2, quarter 3, quarter 4, we do enough to be able to make out that -- make up the INR 7,000 crores, INR 8,000 crores of incremental net outflows, which happened, thanks to the hiring we have done. So I think that's really where it is. I think if we started out aiming to collect INR 20,000 crores, INR 25,000 crores on wealth management side, like I am saying, we have to do INR 7,000, INR 8,000 crores extra for the year. So we have to do INR 27,000 crores, INR 28,000 crores to INR 35,000 crores to account for the INR 8,000 crores of net outflows.

[Sanketh Godha, analyst]

Okay. Perfect. This explains. And the other one we just wanted to check is that out of that INR 150 crores of transaction income what you reported in the current quarter, how much would be B&K? That's one thing. And also in the employee cost of INR 180-odd crores, how much would be B&K-related employee cost? Just to understand the color.

[Karan Bhagat, executive]

So we are not reporting entity-wise, we are reporting segment-wise, okay? So I think B&K largely gets reflected in the corporate and institutional bucket, which is effectively around about INR 24 crores for the previous quarter. But INR 24 crores is 35 days, yes.

[Anil Mascarenhas, executive]

Next in line, we have Abhijeet Sakhare.

[Abhijeet Sakhare, analyst]

I hope you can hear me.

[Karan Bhagat, executive]

Abhijeet, I can hear you.

[Abhijeet Sakhare, analyst]

Yes. Okay. So first question is, when I look at the TL team, the TL base that we have, it seems like there's been a bit of a juniorization over the past 12, 18 months. So how do you think about that in terms of ability to sort of gather large mandates? I'm guessing some of it is because of the exits that we've seen. So the 5-year plus vintage data that we disclosed, that's come off a little bit over the 12 months. So I mean, there's obviously a very severe intensity to go for good quality talent, but...

[Karan Bhagat, executive]

Yes, Abhijeet, that will change in 6, 8 months with the recruitments. So it's not really kind of a permanent change or something. Obviously, with the loss of 8, 10 bankers it's showing up a little bit. But as soon as we do the recruitment and everybody comes in, that will change automatically.

[Abhijeet Sakhare, analyst]

Okay. Got it. And then just in terms of the AUM that moves out with these exits, is it fair to say that the distribution assets have a higher tendency to move out compared to the advisory or there's really nothing across the segments when large teams move out?

[Karan Bhagat, executive]

No, I think it's fair to say distribution assets will have a slightly more tendency to move out, followed by advisory and the discretionary being released because obviously, the interface of the firm is different in all the 3 mandates. Having said that, I think, broadly speaking, that number is in my mind, any number between 5% to 6%. I would be really surprised if it's a number dramatically higher than that.

After that, obviously, the challenge, the battle, the opportunity is really to engage with the client and then kind of there's business as usual. So I think from an AUM perspective, I still don't have data rich enough to say that on distribution, it is 7% and on advisory, it is 4%. But I think logically speaking, you're right. I think distribution assets are more likely to kind of get attrition faster. But I think broadly speaking, if you can -- if the numbers stay around that 5% to 6% broad benchmark, I think that's where that would be healthy.

[Anil Mascarenhas, executive]

Next in line, we have [ Sidhart ].

[Unknown Analyst]

Two questions from my side. First off, is it possible given this whole attrition piece for you to share the gross flows, both on the wealth and the asset management side for the last 5 quarters?

And the second one was to understand what was the institutional mandate addition -- net of the addition that may have come from B&K. Specifically on that, if you could also additionally give an outlook on the asset management side on credit and private equity flows, which tend to be relatively higher yield.

The last is an accounting question. Have we moved from accrual accounting on carry income because there seems to be a quarter-on-quarter variance. Last quarter, there was that carry income. So have we moved back from accrual? Or is that due to a difference in performance resulting in lower carry?

[Karan Bhagat, executive]

I'll start with the second one first. There's no real change in the accounting of carry. It still continues to be on the same method. It's not a pure accrual method. It's slightly more conservative than that.

The way we work on carry is we estimate the carry basis the NAV. And then once the funds are only 18 months away from maturities, that's the first time we start recognizing carry. And then we kind of distribute it over the 6 quarters reaching towards the conclusion of the fund. So typically, if a fund is ending towards the closure, that's really when you'll see the carry fluctuate a bit. But outside of that, there's really no -- I wouldn't call it it's like on accrual. It's a conservative method of kind of computing carry. It becomes calculable for carry only once in -- once the scheme is 18 months away.

Specific to your question about carry from the last quarter to this quarter, I think we have a couple of institutional mandates where we charge carry once a year at the end of the year. And there was a $5 million, INR 40 crore carry, which we had kind of given out as a footnote last quarter, which was booked out as carry in the previous -- as performance fee in the last quarter. So that's what is causing the variation. But outside of that, our normal carry calculation on our alternates is more or less in a kind of a straight line unless and until there's an entry of a big fund into the 18-month kind of category.

On your first question in terms of net flows itself, I think, like I said broadly, I think very, very broadly, without going into specific gross flow, net flow numbers for every quarter, I think all -- generally speaking, in every quarter, there are outflows around about anywhere from INR 800 crores to INR 1,000 crores, There would be net flows of around INR 4,500 crores, INR 5,000 crores that would be target -- sorry, gross flows of INR 4,500 crores, INR 5,000 crores and leading to net flows of INR 4,000 crores, INR 5,000 crores, so that's the broad number.

I think as I pointed out in the last 2 quarters, I think the net flows have been slightly better instead of INR 4,500 crores, INR 5,000 crores, gross flows have been slightly better. Instead of INR 4,500 crores, INR 5,000 crores have been closer to the INR 6,000-odd crore number. The net outflows -- the gross outflows have been slightly higher instead of being INR 1,000 crores, INR 1,500 crores, have been INR 3,500 crores, INR 4,000 crores which resulted in the net flows of INR 1,500 crores, INR 2,000 crores.

So overall, I think broadly, if you want to kind of reach the gross flows number on a steady-state basis, add around about INR 1,000 crores, INR 1,500 crores for net outflows.

For the last 2 quarters, that net out flow instead of being INR 1,000 crores, INR 1,500 crores is INR 3,500 crores , INR 4,000 crores. So that's the broad color on the flow number. As far as the asset management goes, no special mention of any flow specific to the last quarter. It's business as usual. I think we closed out a couple of new funds last quarter, especially we closed out the health care fund of INR 1,000-odd crores. Our pre-IPO fund, which I got kind of closed out 2 quarters back at INR 4,500 crores, INR 5,000 crores. I think that on that, we charge fee on a drawdown basis. So effectively, the AUM keeps increasing as we kind of call for capital. And we continue to be focused on trying to do one strategy-based alternate scheme pretty much every quarter. And I think as time goes by, both on the private equity side as well as on the listed side as well as on the real assets and the pre-IPO side, we'll see some -- we'll potentially see a fund close every quarter and maybe 4 or 5 funds through the year.

So nothing specific on the AIF or the alternates or the listed equity side for the last quarter, I think business as usual. And we'll potentially to reach target INR 8,000 crores to INR 10,000 crores. We need 4 or 5 new funds and potentially the calling for the drawdown of the funds which we've already raised will lead us to the INR 8,000 crores to INR 1,000 crores number.

[Unknown Analyst]

Just one part that got missed on the institutional mandates, was there any addition that came in from the institutional mandates that are there with B&K or are these flows completely organic?

[Karan Bhagat, executive]

On the asset management side, they are completely organic.

[Anil Mascarenhas, executive]

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

[Dipanjan Ghosh, analyst]

Karan, just a few questions. So first, again, I mean, in your presentation, the Corporate and Institutional segment, if I presume that majority of it is B&K, it seems that the run rate of -- or maybe 35 days is like a month. So let's say the monthly run rate, if I were to annualize it, it seems that B&K is broadly flattish to maybe a little bit better than last year run rate, both in terms of revenues and maybe PBT. So firstly, is that a fair assumption?

And secondly, I mean, going into the year, probably we were expecting B&K's revenue given a high base probably to be a little bit tapered down. So how are you looking into it? That's the first question.

Second, obviously, during the start of the call, you mentioned that the institutional mandate pipeline is holding up. So out of the flow expectation that you have mentioned for the year, what sort of quantum are you building from the institutional mandates?

And last question, in terms of the new hiring that you're doing on the team dealership side. So obviously, you have, on one hand, seen attrition of flows from your clientele because of RMs leaving the organization. On the flip side, you are doing a significant amount of lateral hiring. So what sort of flows do you expect because of this lateral hiring? And what can be the associated cost that goes into the P&L because of this?

[Karan Bhagat, executive]

Sorry, I'm just looking at -- yes. So I think B&K is not flattish. It's actually done slightly better. I think over the last year in question, I think it was around about INR 16 crores, INR 17 crores a month, which we had disclosed last quarter. So leading to around about INR 204 crores, INR 205 crores. I think for the current quarter, it's around about, give or take, INR 16 crores, INR 17 crores a month leading to INR 200 crores. I think in the current quarter, it's around about closer to the INR 21-odd crores kind of number, INR 21-odd crores for the month. So effectively, it's closer to the INR 250 crores, INR 260 crore number.

So broadly, it seems like all things being equal, a 15% to 20% higher number than last year, which effectively from a PBT perspective will translate to a 10% to 14% higher PBT, all things being equal for the next 4 quarters. So I think B&K is around about 20%, 25% growth. Coming to your question on the institutional mandate, we've not kind of -- we really don't end up kind of building in something specific for our net flows number. I think we have to get to the net flow number, whether we get an institutional mandate or not. But I think we are always in touch on the institutional mandate side. And typically, cycle for institutional mandates are fairly long. We've got 5 of them as we speak today. And it would not be fair to expect at least one of them coming through the year, through the course of the financial year.

On the team, I think, yes, obviously, it adds to the cost, but I think our existing team was also extremely, extremely well compensated. So I think it's really in that sense, for the current year, at least it's a difference. It's not really the sum total of both. So I think the cost pretty much like earlier is part of the entire cycle. I don't expect it to disturb our cost-to-income ratios in any material way unless we do decide to hire more people for growth.

I think on a steady-state basis, just the churn of the team members itself doesn't lead to a cost addition.

[Dipanjan Ghosh, analyst]

[ Sir ], just one follow-up question, Karan. I mean the cost for the global offshore team, is there anything during this quarter? Or is it completely...

[Karan Bhagat, executive]

No, it's there in the last quarter. It won't be there from this quarter. So for the last quarter, INR 8 crores to INR 9 crores of cost would be there.

So last quarter, around about INR 14 crores, INR 15 crores of cost would be there from the global team, which won't be there in this quarter, yes.

[Anil Mascarenhas, executive]

Next in line, we have Lalit Deo.

Sidhart, in case you wish to ask your question, kindly unmute yourself and ask your question.

[Unknown Analyst]

Just wanted to understand on the lending book, you mentioned that there was a specific reason for that sharp fall. How should we look at that going forward? Also, just a clarification on the overall net flows that we are looking at, right? Including the INR 26,000 crores that we would expect from the UBS acquisition and the INR 18,000 crores that came from B&K, broadly INR 70,000 crores to INR 80,000 crore addition in the ARR AUM. Is that a fair way to look at it?

[Karan Bhagat, executive]

No. I think the UBS ARR AUM is substantially lower. It's not INR 26,000 crores. The entire AUM of UBS is INR 26,000 crores, not the ARR AUM. And yes, the INR 18,000 crores of B&K is fine, and we'll definitely aim to hit our INR 30,000 crores, INR 35,000 crores number. So I think all put together, INR 55,000 crores and UBS will be a sub INR 10,000 crore number purely in terms of ARR AUM. So I think that's the math. So I think all 3 put together will be between INR 60,000 crores to INR 65,000 crores.

[Unknown Analyst]

Sure. And if you could clarify on the lending book, that fall of INR 1,000 crores this quarter? What do we expect...

[Karan Bhagat, executive]

Nothing out of the ordinary of the lending book. I think it moved up sharply in the last quarter also in Q4 -- Q3 and Q4, there were 2 short-term loans, which kind of got repaid. There's nothing else really from a lending book perspective. And there were loans of Q3, Q4, which kind of got repaid. And our current quarter has seen a good uptick back in the loan book. So nothing really specific on the loan book itself.

[Unknown Analyst]

Got it. And one more on the HNI. So this quarter, we've seen net flows of roughly around INR 1,500 crores, INR 1,100 crores of which seem to come from HNI. So is it fair to say that the ultra-HNI book was pretty much all outflows being replaced by gross flows and the entire net flow is or large part of the net flow is coming from the HNI book?

[Karan Bhagat, executive]

Out of the INR 1,100 crores of AUM in HNI, around about INR 500 crores is organic and INR 500 crores is from B&K.

If you take out the INR 500 crores of net flows from HNI, the INR 1,700 crores will become INR 1,200 crores.

[Anil Mascarenhas, executive]

[Operator Instructions]. Dipanjan, you have a question?

[Dipanjan Ghosh, analyst]

Yes, Karan, just one follow-up. Now that the UBS kind of tie-up is broadly going to probably kind of kick in, in the next maybe quarter or 2. Just wanted to understand the thought process when you have worked with the UBS team in terms of identifying the potential customer cohorts that you can tap into or in terms of how the ecosystem will work or some sort of color that for us or investors or sell side for us to understand what sort of addressable market that in your mind, you think could be a potential AUM accretion possible from this cohort, let's say, over the next 3, 5 years out there? Any sort of broader color on that?

[Karan Bhagat, executive]

So I think, Dipanjan, to be honest, we've not gone into defining exact specific numbers. I think we are clear on the 5 points of collaboration. And I think that's really where we would like to keep it. I think UBS is also a very, very large engine, a lot of areas to work for and understand. We've obviously also got our own style and working operations. And I think first is for the transaction to close, then we get into the collaboration agreements, which itself will take, let's say, a month or a couple of months to get done. But I'm quite confident directionally, the 4 or 5 things will play out very well. I think it's too early to define a quantum, but I'll kind of reemphasize the 4 or 5 collaboration points.

I think the first collaboration point, obviously, is our ability to kind of feed into the UBS global products for the resident Indian LRS and GIFT City money. Second, obviously, is for our asset management products to come on to the UBS Wealth Management platform and their ability to offer it to all their wealth managers to kind of feed into our products in India. Obviously, that itself also needs to go through the same product approval committees like it would need for it to go through our side.

Thirdly, obviously, is your clients who've kind of -- Indian clients who have kind of moved out or have built a very large LRS portfolio over a period of time, effectively kind of referring them to UBS for the global wealth management relationship.

And fourth, obviously, is UBS kind of referring us to global NRIs who have an Indian resident NRO, NRE portfolio, which is still in India. So I think these 4 are the main pillars of collaboration.

And fifth, obviously, our ability to kind of draw benefit out of learnings from each other on way of doing business, how does the large global ultra-high net worth get serviced and so on and so forth.

So I think the first 4, obviously, will get quantified will lead to a certain number. Is it a certain target in our mind today? I think the answer is no. I think our first target really is to get all our products approved on each other's platforms. and kind of build the right alignment of interest and show to it relationship managers of both the platforms. And I think once that is done, I think, honestly, the India story as well as the ability of people from India in a limited way to diversify their assets are both existed.

So no reason to believe why we can't see a certain percentage of the India AUM move to GIFT City and similarly, a certain percentage of the entire global AUM on the UBS wealth side move into India as a country. Too early to decide what that AUM percentage might be. It could be 1%, 2% or maybe potentially 4% to 5% from here, but that's something which time will tell. And obviously, a lot of it will be in the execution of it.

[Anil Mascarenhas, executive]

That's all we have time for this evening. Thank you for joining us on this conference call. Have a nice evening.

[Karan Bhagat, executive]

Thank you, everybody. Thank you.