APMI Plans Common NRI Onboarding Utility as Foreign PMS Assets Rebound

India's Portfolio Management Services Industry Seeks to Boost Foreign Participation

The Association of Portfolio Managers in India (APMI) is working on an industry-level onboarding solution for Non-Resident Indian (NRI) investors, aiming to reduce operational friction and accelerate foreign participation in India's portfolio management services (PMS) industry.

The move comes amid a sharp rebound in overseas PMS assets in April, despite continued rupee weakness. Foreign Assets Under Management (AUM) rose 7.8% month-on-month, adding Rs 16,648 crore to reach Rs 2.28 lakh crore, recovering from an 11.8% decline in March. Non-Resident Indians led the rebound, with AUM rising 12%, ahead of foreign portfolio investors (FPIs) at 7.4%, even as the rupee depreciated 2-3% during the month.

The Association of Portfolio Managers in India is discussing an industry-level solution for NRI onboarding, which aims to reduce onboarding timelines, lower operational effort, and enhance overall ease of doing business for NRI investors.

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The PMS industry is seeking to position itself more competitively for overseas wealth flows, an area where onboarding complexity, operational requirements, and tax-related friction have historically remained higher compared with mutual funds and direct equities.

The broader PMS industry also saw a recovery in April after weak flows in March. Total PMS AUM rose 2.1% to Rs 42.29 lakh crore, supported by net inflows of Rs 25,088 crore, reversing March's Rs 648 crore outflow. Equity AUM surged 13.8% amid a strong market rebound, while discretionary AUM — accounting for nearly 85% of the industry — expanded 2.2%.

However, the data also highlighted growing concentration within the sector. Public Funds (PF) and Employees' Provident Fund Organisation (EPFO)-linked money now accounts for nearly 80% of domestic PMS assets at Rs 31.81 lakh crore.

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The divergence between client growth and AUM expansion also pointed to rising ticket sizes across the industry. While PMS AUM grew 11% year-on-year, client additions rose only 5%. Client count, in fact, declined 1.7% month-on-month in April to 2.12 lakh.

Another emerging trend was the sharp increase in unlisted exposure within PMS portfolios. Unlisted equity allocations rose 38.8% month-on-month, while unlisted plain debt surged 150.5%, albeit on a smaller base.

The association added that it continues to work with members on evolving best practices around disclosures, valuation methodologies, and risk communication for unlisted assets.

Meanwhile, derivatives AUM dropped 54% in April, which APMI described as "largely tactical," linked primarily to de-risking and position unwinding following the March market selloff. PMS managers continue to use derivatives selectively for hedging rather than as core allocations, it said.

On the distribution side, 713 new individual distributors were added during the month. But rising compliance costs remain a concern for smaller players.

Of the 523 PMS entities registered with SEBI, nearly 420 manage assets below Rs 1,000 crore, underlining the dominance of boutique and emerging managers within the industry.

APMI said it continues to advocate proportionate compliance approaches and shared operational utilities to preserve diversity and scalability within the PMS ecosystem.