New mutual fund rules will hurt smaller players but benefit Prudent Corporate, says CMD

Prudent Corporate Advisory Services expects recent Total Expense Ratio (TER) and exit load rule changes to accelerate consolidation in the mutual fund distribution industry, CMD Sanjay Shah said, adding that organised platforms could gain market share as smaller players face pressure.

Speaking on the impact of the new regulations, Shah said the changes would have only a limited effect on the company’s existing business. “At my book level, I'll have the impact of about two to three basis points,” he said. He added that distributors outside the goods and services tax (GST) structure could see revenues decline by 15-20%. “This will pave the way for people to consolidate on a quality platform,” Shah said.

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The company is also increasing its focus on insurance and geographic expansion. Shah said insurance now contributes 14-15% of overall revenue and will remain a huge growth driver going forward. Prudent Corporate plans to add over 30 branches this year, mainly in tier-2 and tier-3 cities, while also evaluating acquisition opportunities after integrating Pune-based Indus Capital.

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Shah expects mutual fund revenue growth of around 20-22% in FY27, supported by systematic investment plan (SIP) inflows and improved market conditions. He also confirmed the company has exited the P2P lending business after regulatory changes by the Reserve

Bank of India (RBI) made the model non-sustainable.

Prudent Corporate Advisory Services, which has a market capitalisation of ₹11,192.23 crore, has seen its shares rise more than 15% over the last year.

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