Soon, pension money to go into IPOs, top 200 firms
Mumbai, July 20: Pension fund managers (PFMs) will soon be allowed to invest in initial public offerings, and also in a broader list of stocks, the chief of the PFRDA said on Tuesday.
The Pension Regulatory and Development Authority (PFRDA) is aiming to increase the number of subscribers looking to build a retirement corpus by one crore in FY22, its chairman Supratim Bandyopadh-yay told reporters.
Currently, there are restrictions under which PFMs can invest the equity component of a corpus only in scrips traded on the options and futures segment with a market capital of more than Rs 5,000 crore.
Officials said this restricts the opportunities
for fund managers, who have been able to deliver a compounded annual growth rate of 11.31 per cent on equity investments since the beginning of the New Pension Scheme. They pointed out Avenue Supermarkets as a case in point, where PFMs were not able to enter due to restrictions.
"In two or three days, we will be notifying new rules which take a more liberal view on categories where equity investments can be made," Bandyo-padhyay said.
Under the new rules, PFMs will be able to invest in IPOs, follow-on public offers, offer for sale of companies. And, the universe of stocks to choose from will also be broadened to the top-200 scrips traded on NSE and BSE, he said.
There will be some specifications which wil be brought in to reduce the risk associated with equity investments, he said.
Replying to queries around new age companies and the possibility of retirement money being invested in a company yet to deliver profits, he said the PFRDA is for giving independence to the PFMs for choosing.