PFRDA is aiming to increase the number of subscribers looking to build a retirement corpus to 1 crore by FY 2022, said PFRDA's chairman.
Pension fund managers will soon be allowed to invest in initial public offering (IPO) in the stock market. Pension fund regulator PFRDA may soon allow Pension Fund Managers (PFMs) to invest in IPOs and stocks, a top official from sector regulator PFRDA said to PTI on Tuesday. If this happens, then the chances of getting higher returns to the subscribers of the pension scheme will increase.
Pension money will be invested in IPO
Supratim Bandyopadhyay, Chairman, Pension Regulatory and Development Authority (PFRDA), told reporters that with the increase in interest during the pandemic, PFRDA is aiming to increase the number of subscribers looking to build a retirement corpus to 1 crore by FY 2022. At present, Pension Fund Managers (PFMs) can invest the equity component of the corpus only in scrips traded on the options and futures (F&O) segment stocks with a market cap of more than Rs 5,000 crore.
'Will announce new rules in 2-3 days'
Officials say this limits the opportunities for fund managers, who have been able to deliver a compound annual growth rate (CAGR) of 11.31 per cent on equity investments since the launch of the new pension scheme. Pointing to Avenue Supermarkets, he said that PFM could not invest here due to restrictions. Bandyopadhyay said that "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."
Pension money can be invested in IPO, FPO, OFS
Bandyopadhyay said that under the new rules, pension fund managers will be able to invest in IPOs, Follow on Public Offers (FPOs), Offer for Sale (OFS) of companies. Along with this, there will be a wide range of investments in stocks, which will be increased to the top 200 stocks traded on NSE, BSE. Bandyopadhyay said that he himself wants to invest in more and more equities because the returns are good here.
'Will add 1 crore new subscribers'
So far, equity investments have given a return of 11.31 per cent, corporate debt has given a return of 10.21 per cent and government securities have given a return of 9.69 per cent. At present, there are 4.37 crore subscribers in NPS, of which 2.90 crore are under Atal Pension Yojana. Bandyopadhyay said, "we are targeting to increase the subscriber base by 1 crore in FY22, which will include 90 lakh for APY and the remaining for other products".
He said that despite the Covid epidemic, 1.60 lakh new subscribers have been added in the first quarter.
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