Prudent Corporate recently completed 25 successful years of MF distribution, scaling up to an AuM of over Rs.100,000 cr, growing over the last decade at 2x the industry growth rate (regular plans).
Its journey began in 2000 – just when the dot com bubble crashed and a 3 year bear market began. From then unto now, investing amidst adversity has been a motto that Sanjaybhai has consistently adopted, with great results.
Investing in growing your business in bad market conditions means you acquire quality – quality team, quality clients who come with reasonable expectations, quality infrastructure including office space –all of which help build quantity in the ensuing bull market. Trying to invest in a bull market often turns out to be an unrewarding exercise – higher costs for poorer quality.
Sanjaybhai feels that many MFDs who shy away from investing in their own businesses either don’t take a long term view or in some cases genuinely don’t know how to go about investing for scaling up. They need guidance on investing in technology, in brand building, in team building and execution of such plans.
He credits digitization as one of the big growth drivers of Prudent over the last decade. Digitization has to be end-to-end from onboarding to engagement to transaction execution to reporting and to ongoing service.
Digitization coupled with strong practice management support has enabled the top 1000 MFDs of Prudent to grow at a phenomenal rate of 41% CAGR over the last 10 years.
If you want to build scale, you have to change your orientation from running your business to building your business. You have to build your team, you have to learn to delegate, you have to build processes and systems, you have to lead and inspire and you have to be willing to share revenue generously.
In 2018, he sold 40% stake in his company to TA Associates to begin the process of unlocking value. This led to an IPO in 2022 to provide his PE partner an exit at a handsome gain. The stock has since then done very well and is today owned by marquee international investors and leading domestic mutual funds.
On the 25th anniversary of Prudent, he decided to give away some of his personal shares in Prudent to over 600 employees of the company. This gift – worth Rs.34 crs – needed a one time blessing from SEBI to not treat all these employees as promoters, which SEBI was very happy to sign off on.
Prudent today continues to grow faster than the industry despite reaching the scale it has – and Sanjaybhai intends keeping it that way.
Health insurance is now becoming another meaningful product vertical beyond MFs – he sees significant potential for all MFDs to build a robust income stream over time from health insurance.
Expansion of the product basket to ensure that Prudent’s partners offer their clients all the products they need, is a continuing focus for the firm.
Growth is a way of life at Prudent – and Sanjaybhai aims to continue this tradition in the coming years as well.