Sodhani Capital Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Mutual Funds in India have emerged as a powerful force, enabling millions of Indians to take control of their financial prosperity. It has become a beacon of opportunity and growth, fundamentally transforming the way everyday investors access capital markets. This positive evolution is driven by a vibrant ecosystem that interconnects investors, asset managers, financial advisors and distributors, an array of service providers, media and very importantly, the regulator, The Securities and Exchange Board of India (SEBI). this dynamic ecosystem not only drives the industrys sustained expansion but also paves the path toward financial freedom for millions of households, empowering them to build long-term wealth and security. The Indian mutual fund industry witnessed robust growth during FY 2025-26. The industrys Assets Under Management - AUM crossed ^70 lakh crore, registering a YoY growth of ~18%. Systematic Investment Plan - SIP inflows remained strong, consistently exceeding ^25,000 crores per month, reflecting growing retail investor confidence and financialization of savings.

SEBI and AMFI continued to focus on investor protection, transparency, and expansion of distribution network in B-30 cities. The rise of digital platforms, UPI-based SIPs, and fintech partnerships has significantly improved penetration.

Assets under management (AUM) of the domestic mutual fund industry, rose 6.47% in April 2025 due to net positive flows in open-ended categories, led by debt funds and markto-market (MTM) gains in equity. The industry witnessed net inflows of Rs 2.77 lakh crore during the month, with ~79% flows from the debt category.

(https://www.amfiindia.com/Themes/Theme1/downloads/AMFIMonthlyNote_April2 0 25.pdf)

April 2025 recorded the highest ever monthly SIP contribution, standing at Rs 26,632 crore. The number of contributing SIP accounts has increased to 8.38 crore in April 2025 from 8.11 crore in March 2025.

(https://www.amfiindia.com/Themes/Theme1/downloads/AMFIMonthlyNote April20 25.pdf)

The mutual fund industrys AUM grew 6.47% from Rs 65.74 lakh crore in March 2025 to Rs 69.99 lakh crore in April 2025. During the month, the industry witnessed positive flows of Rs 2.77 lakh crore, with the debt category leading the pack, followed by the equity category. The growth was further driven by MTM gains as equity markets posted another on-month gain in April, with the Nifty 50 and Sensex climbing 3.48% and 3.67%, respectively. The rally was largely concentrated in the latter half of the month, supported by strong foreign inflows, with foreign institutional investors (FIIs) injecting over Rs 30,000 crore into domestic equities during a 10-day span ending in April 2025. Domestic institutional investors (DIIs) also provided steady support, purchasing Rs 28,228 crore worth of equities in April, though this was lower than the equities bought in March 2025 (worth Rs 37,586 crore). Market sentiment was further buoyed by a

slowdown in foreign fund outflows, helped by easing global tariff concerns and a weakening dollar index. Fils turned net buyers in April and purchased equities worth Rs 4,223 crore, reversing their net sales of Rs 3,973 crore in March.

(https://www.amfiindia.com/Themes/Theme1/downloads/AMFIMonthlyNote_April2 0 25.pdf)

2. BUSINESS OVERVIEW

Sodhani Capital Limited Serves as the main point of contact for Retail and HNI clients, offering services like mutual funds and basic investment advice.

> Expertise & Learning (Trust)- With a laser-sharp focus on continuous learning, we strive to be the ultimate, trusted first point of contact for any financial or investment product query.

> Customer First (Empathy)- Treating our customers exactly how we would want to be treated- with absolute respect, transparency, and integrity.

> Operational Excellence (Efficiency)- Dedicated to building highly efficient operations to deliver seamless, hassle-free experiences for our clients.

> Continuous Innovation (Growth)- We constantly innovate and evolve our strategies to anticipate and meet the unmet financial needs of our investors.

3. OPPORTUNITIES AND THREATS

> Opportunities:

(a) Low mutual fund penetration in India at ~4% of household savings vs global average of 15%+ provides huge headroom for growth.

(b) Rising financial literacy and shift from physical to financial assets in Tier- 2/Tier-3 cities.

(c) BSE SME listing has enhanced Companys credibility and access to capital for expanding distribution network.

(d) Technology integration for seamless on-boarding and UPI-based SIPs to tap young investors.

(e) Systematic Investment Plans (SIPs) are seeing phenomenal adoption, bringing in highly predictable, recurring retail capital flows.

(f) Enhanced digital infrastructure—such as centralized Know Your Distributor (KYD) and digital KYC frameworks—lowers customer acquisition costs and improves remote distribution.

> Threats:

(a) Market volatility impacting investor sentiment and AUM growth.

(b) Intense competition from banks, national distributors, and fintech platforms.

(c) Regulatory changes in TER, commission structure, or distributor norms by SEBI/AMFI.

(d) Risk of mis-selling and associated reputational damage.

(e) Mutual Fund Schemes are not guaranteed or assured return products

(f) Past performance does not guarantee future performance of any Mutual Fund Scheme.

4. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company Scalability remained resilient to the market instability. Generated ^123.75 Cr in Net Fresh Inflows, which successfully neutralized a negative market impact of ^11.13 Cr to drive overall AUM growth. Strengthened the retail and HNI footprint by onboarding 265+ new clients during the fiscal year. Revenue growth of 11% YoY with EBITDA remaining flattish exhibiting 2% growth YoY largely impacted by the strategic expansion plans.

5. OUTLOOK

The outlook for the mutual fund industry remains positive. With Indias GDP growth, rising per capita income, and governments focus on financial inclusion, the industry is expected to maintain double-digit growth. The Company, leveraging its BSE SME listed status and AMFI registration, plans to expand its geographic reach, invest in technology, and strengthen investor education initiatives to capture this growth, while ensuring strict compliance with SEBI, AMFI, and BSE guidelines.

The mutual fund industry and its regulatory body, the Association of Mutual Funds in India (AMFI), remains incredibly bullish. Supported by strong institutional frameworks, sustained retail participation, and massive Systematic Investment Plan (SIP) inflows, the Indian market continues to experience exponential growth.

6. RISKS AND CONCERNS

The Companys performance is linked to capital market performance and investor sentiment. Key risks include regulatory risk, market risk, operational risk related to technology, and competition risk. The Company has a comprehensive risk management framework to identify, monitor, and mitigate such risks. All distributor activities are carried out in accordance with AMFI Code of Conduct and SEBI guidelines to avoid mis- selling.

The industry faces strict oversight, volatile economic conditions, and high compliance burdens that directly impact fund operations. The Company, being an AMFI registered mutual fund distributor, is exposed to various risks that may impact its business operations and financial performance. The key risks include:

> Regulatory Risk: The business of the company is highly regulated by SEBI and AMFI. Any adverse changes in regulations may impact the revenue and operations of the Company.

> Market Risk: The Companys revenue is directly linked to Assets Under Management - AUM mobilized. Adverse market conditions, prolonged volatility, or bearish sentiment may lead to lower inflows, higher redemptions, and decline in AUM, thereby impacting commission income.

> Operational & Technology Risk: Dependency on digital platforms, RTA systems, exposes the Company to risks of technical glitches, cyber security threats, and data privacy breaches. Any failure may disrupt services and affect investor confidence.

> Competition Risk: The Company faces intense competition from banks, national distributors, fintech platforms, and direct plans. Increasing investor preference for direct plans may impact the Companys commission income.

> Reputational Risk: Any instance of mis-selling, non-compliance with AMFI Code of Conduct, or investor grievances may lead to regulatory action, ARN cancellation, and reputational damage.

The Company has implemented adequate risk management policies, internal controls, and regular training programs to mitigate these risks. All activities are carried out in strict compliance with SEBI Regulations, AMFI Guidelines, and Code of Conduct for Mutual Fund Distributors.

7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems commensurate with its size, scale, and nature of operations. The internal control framework is designed to ensure compliance with applicable laws including SEBI - Mutual Funds Regulations, AMFI Guidelines, Companies Act, 2013, and BSE SME listing requirements.

8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, strong financial performance coupled with improved operational efficiency contributed significantly to the overall performance of the Company.

• Financial Growth of the Company Revenue from Operations

9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company believes that employees are its most valuable asset. As on March 31, 2026, the Company had 11 employees. Regular training on AMFI guidelines, SEBI regulations, and product knowledge is imparted to the team. Employee relations remained cordial throughout the year.

The Company follows a policy of hiring experienced, qualified, and skilled professionals to ensure best-in-class service to investors.

Employee relations remained cordial and harmonious throughout the year. The Company maintains a positive work culture focused on transparency, compliance, and customer service. There were no material developments or disputes in industrial relations during the year under review.

10. HEALTH, SAFETY, AND ENVIRONMENT PROTECTION

> Nature of Operations: Being a financial services company registered with AMFI, the Companys operations do not involve manufacturing, use of hazardous materials, or processes that impact the environment significantly. Hence, the business is classified as low-risk from health, safety, and environmental perspective.

> Workplace Safety: The Company maintains a safe workplace with fire extinguishers, smoke detectors, and clearly marked emergency exits. Regular checks are conducted to ensure compliance with fire safety and building safety norms. All employees are briefed on safety protocols during induction.

> Health & Wellbeing: The Company focuses on employee wellbeing through ergonomic workstations, regular health check-up camps, and flexible work

policies. The office premises comply with standards under the Factories Act, 1948 and Shops & Establishments Act as applicable.

> Environment Protection: The Company is committed to environmental sustainability through:

• Digital-first approach: Paperless client onboarding, e-signatures, and digital storage of records

• Energy conservation: Use of LED lighting, power-saving modes, and regular maintenance of AC/HVAC systems

• E-waste management: Disposal of old computers/electronics through authorized e-waste recyclers as per E-Waste Rules, 2016

11. CAUTIONARY STATEMENT

Statements in this MD&A describing the Companys objectives, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied due to various risks and uncertainties.

For and on behalf of the Board of Directors
SODHANI CAPITAL LIMITED
Sd/-	Sd/-	Sd/-
Mr. Ajit shah	Ms. Ritika Sodhani	Ms.Aastha Sodhani
(Chairperson & Director)	(Ma na gi ng D irector)	(Whole time Director)
DIN:08387316	D IN:09124174	09124152
Date:27.07.2026
Place: Jaipur