An official of apex pension regulator PFRDA said on Tuesday that pension fund managers (PFMs) will soon be allowed to invest in initial public offerings (IPOs) and key equities. Pension Regulatory and Development Authority (PFRDA) chairman Supratim Bandyopadhyay told reporters that the regulator aims to increase the number of pension fund members.
At present, pension fund managers can invest only in such stocks, whose market capitalization is more than Rs 5,000 crore and which are tradeable in options and futures trading. Bandyopadhyay said that this limits opportunities for fund managers. He cited the example of Avenue Supermarket, where PFMs could not invest due to restrictions.
“We will notify new rules in two or three days, which are more liberal on categories where equity investments can be made,” he said, adding that under the new rules, PFM IPO, follow-on Public Offering (FPO), will be able to invest in an offer for sale. Apart from this, investment will also be allowed in top 200 stocks traded on NSE and BSE.
Bandyopadhyay stressed that he personally favors more investments in equities, although the necessary instructions to mitigate risks will remain. The total number of NPS subscribers is 4.37 crore, out of which maximum 2.90 crore are under Atal Pension Yojana. Bandyopadhyay said, “We are targeting to increase the member base by one crore in the financial year 2021-22, in which Atal Pension Yojana will have 90 lakh members.” The total AUM of PFRDA i.e. Asset Under Management is 6.2 lakh crores as on 10 July 2021. At the end of the financial year 2020-21, this amount was Rs 5.78 lakh crore.