Home / Business and Economy / EPFO Fuels ₹35 Trillion PMS Industry, Accounting for 79% of Assets
EPFO Fuels ₹35 Trillion PMS Industry, Accounting for 79% of Assets
16 Aug
Summary
- EPFO manages 79% of ₹35 trillion PMS assets as of May 2025
- EPFO's debt investments have doubled in 5 years, while non-EPFO PMS growth slowed
- Increased compliance and higher ticket size deter new PMS providers
In May 2025, India's portfolio management services (PMS) industry managed assets worth ₹35 trillion, with the Employees' Provident Fund Organization (EPFO) accounting for a staggering 79% of this, or ₹28 trillion. This represents a significant increase from five years earlier, when EPFO's share stood at 75%.
The EPFO, which manages the retirement funds of nearly 70 million Indians, is mandated to invest a portion of its corpus in debt instruments through PMS providers. This has resulted in a surge of funds flowing into the PMS industry, which is traditionally associated with high-net-worth individuals (HNIs). However, the EPFO's investments come from the savings of regular employees, who set aside a share of their monthly earnings for their retirement.
Meanwhile, the share of PMS assets from non-EPFO sources, primarily HNIs, has shrunk from 24% to 21% over the past five years. Experts attribute this slower growth to factors such as a tax on stock churning, increased compliance requirements, and a higher minimum ticket size for PMS investments.
The PMS industry, once known for its light-touch regulation, is now facing significantly higher compliance demands from the Securities and Exchange Board of India (SEBI). PMS providers are now required to submit up to 12 reports per month, covering various aspects of their operations. This has raised the break-even AUM for new PMS providers from around ₹50 crore to ₹200 crore, making it more challenging for new players to enter the market.
