PMS Firms Seek Sebi Approval to Expand into Unlisted, IPO Anchor Deals
Mumbai
Portfolio management services (PMS) firms have requested that the market regulator expand their investment universe, as the segment struggles to keep pace with rival products. According to four people aware of the discussions, this move is aimed at boosting the segment's competitiveness.
The PMS industry has faced increasing pressure from rival products such as exchange-traded funds (ETFs) and systematic investment plans (SIPs), which have gained popularity in recent years. As a result, PMS firms are seeking to increase their investment options to better compete with these products.
| Product | Growth Rate (2022) |
|---|---|
| PMS | 8% |
| ETFs | 15% |
| SIPs | 20% |
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
While the PMS industry has shown steady growth, its pace has been slower compared to other investment products. In 2022, the PMS segment grew by 8%, whereas ETFs and SIPs recorded growth rates of 15% and 20%, respectively.
The regulator has been considering the PMS firms' request, but no final decision has been made yet. The expansion of the investment universe could potentially benefit both the PMS firms and investors, but it may also introduce new risks and challenges.
Investor Takeaway
PMS firms may expand into unlisted and IPO anchor deals, potentially increasing investment opportunities.
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