PMS industry wary of Sebi plan to raise investment limit to Rs 50 lakh


Portfolio management services (PMS) as an asset class has a great future in India and it has the potential to deliver better if positioned properly, said A Balasubramaniam, Managing Director and CEO, Aditya Birla AMC.

Speaking at a PMSbazaar event in Mumbai, he said while the investment world is changing, PMS has to be sold right as there is no boundary.

Nimesh Shah, Managing Director & CEO, ICICI Prudential AMC, said mutual fund in India is becoming more of a scale-based business, while PMS products hold that niche.

“Between AIF and PMS, AIF can provide a very good platform. PMS is a contrarian place, which can work beautifully,” he said.

Aashish P Sommaiyaa, MD & CEO, Motilal Oswal Asset Management, said while there is direct equity at one end of the spectrum, there is mutual fund at the other end. “PMS and AIF are in between,” he said.

The capital markets regulator has proposed changes to norms on PMS, seeking to put in place a higher net worth criteria and investment thresholds for portfolio managers and suggest fee limits.

Industry experts said if the limit is hiked to Rs 50 lakh, it would impact the industry.

Says Prateek Agrawal, Business Head & CIO, ASK, “If the PMS limit is hiked to Rs 50 lakh, the target base would fall sharply and it will impact the industry.”

Sebi is widely expected to enhance the minimum investment limit for PMS from Rs 25 lakh to Rs 50 lakh at its forthcoming board meeting in November.

However, Balasubramaniam said even if the PMS limit is hiked to Rs 1 crore, there is nothing wrong with it.


Author: Ayaan