07 Aug India’s PMS industry at an inflection point, says SEBI Chief Tuhin Kanta Pandey at APMI conference
Delivering a keynote address on the sidelines of the event, Pandey described the PMS industry as a “differentiated provider of wealth solutions” that has become increasingly relevant in India’s rapidly expanding financial landscape.
“In 1993, PMS was an idea ahead of its time,” he said, adding that SEBI brought PMS under its regulatory ambit when India’s GDP was just USD 279 billion. “Fast forward to 2024, our GDP has touched USD 3.9 trillion, marking nearly a sevenfold growth and propelling India into the world’s top five economies.”
This economic surge, he noted, has created an explosion in private wealth, with the number of high-net-worth individuals (HNIs) and ultra-HNIs increasing annually.
In such an environment, standardized investment strategies often fall short. “That is precisely where PMS comes in,” Pandey remarked. “You offer bespoke solutions aligned with an investor’s risk appetite, financial goals, and time horizon—backed with transparency and performance-linked fees.”
Strong growth signals
Pandey highlighted the steady rise in the number of portfolio managers, which increased from 361 at the end of FY2021 to 479 as of June 30, 2025. During the same period, the client base for PMS grew at a compound annual growth rate (CAGR) of 12%.
Discretionary PMS, where clients delegate investment decisions to portfolio managers, grew even faster at 13% CAGR and now constitutes 96% of the total PMS client base.
“Discretionary AUM, excluding EPFO and Provident Funds, has grown at 23% annually. That’s a sign of growing trust in active management,” Pandey observed.
Regulatory reforms and industry collaboration
Pandey detailed SEBI’s efforts to support the PMS ecosystem, working closely with the APMI to simplify processes and promote transparency. Key initiatives include:
- Streamlined digital client onboarding
- Simplified disclosure documents
- Clear infrastructure adequacy guidelines
- Oversight for PMS distributors
- Optional selection of secondary benchmarks
- Master circulars and operational manuals
“These aren’t just procedural tweaks. They are strategic enablers to help portfolio managers focus on delivering client outcomes,” Pandey stated. The average SEBI processing time for PMS registration and post-registration activities has also improved—reduced from 74 days in FY24 to 49 days in FY25.
Additionally, SEBI has implemented safeguards to protect investor interests, such as mandatory performance reporting norms, high watermark fee structures, disclosure of grievances, and related-party investment rules requiring client consent.
Emphasis on governance and trust
While acknowledging the industry’s progress, Pandey issued a cautionary note on governance. “Clients are entrusting you with their capital and their future. Any fall in professional conduct or governance will erode this trust,” he warned.
He also emphasized the importance of curbing exaggerated performance claims. “Such misleading communication from a few registered portfolio managers undermines industry credibility,” he said, urging industry players to communicate performance claims responsibly and educate clients about risk-return trade-offs and the advantages of owning underlying securities.
Role of APMI and digital transformation
Pandey praised the role of APMI in promoting a collaborative approach to regulation. “Since its formation in 2021, APMI has enabled structured dialogue with SEBI, accelerating our shared agenda of investor protection and industry development,” he noted.
He called on APMI to enhance investor awareness by demystifying PMS through simplified content and outreach programs. He also urged the association to continue streamlining data reporting processes through its Offsite Inspection Data Committee.
Digital transformation emerged as another key theme. “Onboarding, reporting, and engagement must be digitally enabled. SEBI’s tech-driven supervision now puts the onus on the entire PMS ecosystem to embrace innovation,” he said.
Looking ahead: Industry at inflection point
Concluding his remarks, Pandey reiterated that India’s PMS industry is at an “inflection point.”
“You have a powerful position in place—a flexible regulatory framework, active engagement via APMI, and a rising pool of informed investors,” he said.
“But sustained growth will depend on continuous innovation, strengthened processes, investment in technology, and above all, keeping clients’ interests at the centre.”
As APMI enters its fourth year, Pandey reaffirmed SEBI’s commitment to fostering a forward-looking regulatory environment that supports co-creation and resilience in the PMS space.
(All statements and data cited above are from Tuhin Kanta Pandey, Chairman of SEBI, speaking at the APMI Conference in Mumbai on August 6, 2025)
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