PMS could grow bigger amongst others in components of investing: Sebi chief Pandey

The Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on Wednesday stressed that the portfolio management services (PMS) companies to grow bigger than most of the components of investing in India.

“Whether you look at mutual fund or the number of investors or even the AI industry, India has been talking about 15% plus CAGR in most of the components of that. PMS is no exception, you can be even bigger.... 20% plus,” Pandey told the audience of PMS promoters and managers at the Association of Portfolio Managers in India (APMI).

The Sebi chairman disclosed that, excluding PF and EPFO assets, assets under management of portfolio managers have grown to about ₹9.2 lakh crore by August 2026, from around ₹1.4 lakh crore at the end of FY16, translating into 20% growth annually.

The number of registered portfolio managers has also increased significantly, to 530 today from around 200 a decade ago. The number of discretionary PMS clients has grown nearly fivefold, to around 2.2 lakh from about 46,000 in the same period.

On September 24, the Sebi board approved sweeping changes across the PMS framework, including a move to allow portfolio managers to invest in initial public offerings (IPOs) and primary-market debt issuances. This move is aimed at expanding the universe of investments available to portfolio managers.

Sebi has also approved a route to enable PMS managers to invest in mutual fund schemes while the framework provides greater flexibility around investments in overseas securities and specified unlisted debt, subject to conditions.

Under the framework, PMS managers can invest up to 10% of client's assets under management in investment-grade unlisted debt with the client's consent. “The new PMS framework has four broad objectives: development of the PMS industry, ease of compliance, consolidation and simplification of the regulatory framework, and removal of redundant provisions,” Pandey said.

“If investors' needs are becoming more diverse, the investment toolkit available to professional managers must also evolve. But perhaps one of the more interesting additions is PRIM, the Portfolio Managers route for investing in mutual fund units. Under PRIM, portfolio managers can construct portfolios using direct plans of mutual funds, including ETFs, index funds, and specialized investment funds. The minimum ticket size will be raised to Rs 25 lakh. We are also introducing the concept of independent fund managers, IFM. This can create space for investment professionals and entrepreneurial talent to operate in association with an established portfolio manager," he added.