Mumbai/Delhi: Pension Fund Regulatory and Development Authority (PFRDA) is unlikely to rush into allowing fund managers to invest in startup, a top official said on Tuesday.
The authority recently allowed fund managers to participate in initial public offerings (IPOs) of companies with a minimum issue size of Rs 500 crore. apart from this, after the ipo The valuation should place them among the top 200 listed companies.
“The biggest challenge for us is that we require daily NAV (net asset value) on all investments like mutual funds, and this may not be possible with startups. Apart from this, there are also challenges related to evaluation,” said the PFRDA chairman Supratim Bandyopadhyay At a media briefing.
On Monday, the government suggested that LIC And the Employees’ Provident Fund Organization can invest in startups, a scheme for which a section of the EPFO is not fully covered.
While the PFRDA chief did not rule out the possibility, he suggested caution.
Discounts on IPOs come at a time when the market is flooded with offers and the National Pension Scheme (National Pension Scheme).NPS) has registered a milestone of 30 lakh non-government retail accounts with assets of Rs 97,000 crore under management.
Including government accounts, PFRDA has assets of Rs 6.4 lakh crore under management – a 31% increase from last year’s Rs 4.9 lakh crore.
Bandyopadhyay said the regulator would not go into valuation of companies going for IPOs and the investment would be entirely of fund managers. He said the existing headroom for investment under qualified institutional bidders is sufficient as only 14% of government employees’ corpus is invested in equities.
The pension regulator said that over the past 12 years, equity investments of PFRDA have generated a compound annual growth rate of 12.9% as against 9.9% for corporate bonds and 9.4% for government securities. However, returns on whole life annuities offered by life insurance companies range between 5.25% and 6% and are subject to change. Bandyopadhyay said the insurance regulator is in discussion to allow inflation-linked annuity products and this will make pensions more attractive.
PFRDA has solicited proposals from consultants to help prepare the Minimum Assured Return Scheme under NPS. The regulator has decided to extend the deadline as the bidders have said that it was difficult to meet the condition requiring experience in designing similar products for India. PFRDA is also in talks to increase the Points of Presence (POP) which are entitled for distribution. NPS Products. “Now we have fintechs like Banyan Tree, ETMoney, Paytm and Zerodha which can provide an end-to-end digital channel for pensions. For semi-urban customers, we are allowing individuals to register as POPs under existing POPs as last-mile connectivity is very important,” Bandyopadhyay said. ETMoney is part of the Times Group.
The authority recently allowed fund managers to participate in initial public offerings (IPOs) of companies with a minimum issue size of Rs 500 crore. apart from this, after the ipo The valuation should place them among the top 200 listed companies.
“The biggest challenge for us is that we require daily NAV (net asset value) on all investments like mutual funds, and this may not be possible with startups. Apart from this, there are also challenges related to evaluation,” said the PFRDA chairman Supratim Bandyopadhyay At a media briefing.
On Monday, the government suggested that LIC And the Employees’ Provident Fund Organization can invest in startups, a scheme for which a section of the EPFO is not fully covered.
While the PFRDA chief did not rule out the possibility, he suggested caution.
Discounts on IPOs come at a time when the market is flooded with offers and the National Pension Scheme (National Pension Scheme).NPS) has registered a milestone of 30 lakh non-government retail accounts with assets of Rs 97,000 crore under management.
Including government accounts, PFRDA has assets of Rs 6.4 lakh crore under management – a 31% increase from last year’s Rs 4.9 lakh crore.
Bandyopadhyay said the regulator would not go into valuation of companies going for IPOs and the investment would be entirely of fund managers. He said the existing headroom for investment under qualified institutional bidders is sufficient as only 14% of government employees’ corpus is invested in equities.
The pension regulator said that over the past 12 years, equity investments of PFRDA have generated a compound annual growth rate of 12.9% as against 9.9% for corporate bonds and 9.4% for government securities. However, returns on whole life annuities offered by life insurance companies range between 5.25% and 6% and are subject to change. Bandyopadhyay said the insurance regulator is in discussion to allow inflation-linked annuity products and this will make pensions more attractive.
PFRDA has solicited proposals from consultants to help prepare the Minimum Assured Return Scheme under NPS. The regulator has decided to extend the deadline as the bidders have said that it was difficult to meet the condition requiring experience in designing similar products for India. PFRDA is also in talks to increase the Points of Presence (POP) which are entitled for distribution. NPS Products. “Now we have fintechs like Banyan Tree, ETMoney, Paytm and Zerodha which can provide an end-to-end digital channel for pensions. For semi-urban customers, we are allowing individuals to register as POPs under existing POPs as last-mile connectivity is very important,” Bandyopadhyay said. ETMoney is part of the Times Group.
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