How NPS subscribers will profit from pension funds’ IPO funding
NPS scheme: To make National Pension System (NPS) extra profitable for the NPS account holders, the Pension Fund Regulatory and Development Authority (PFRDA) had given varied modification proposals within the Pension Amendment Bill. Out of these PFRDA proposals, the Government of India (GoI) has accepted elevating the FDI restrict in pension funds from 49 per cent to 74 per cent and permitting pension funds to spend money on IPOs (Initial Public Offerings).
In truth, the GoI has applied these PFRDA proposals in regard to the NPS scheme as properly. The PFRDA Chairman Supratim Bandyopadhyay knowledgeable concerning the authorities’s nod in an unique dialog. He mentioned that the nod to boost FDI restrict in pension funds and permitting pension funds to spend money on IPOs will trickle right down to the NPS subscribers’ return within the long-term.
Speaking on the PFRDA proposals which were accepted by the GoI; Supratim Bandyopadhyay, Chairman at PFRDA mentioned, “The GoI has accepted our proposal to raise FDI limit in pension funds from 49 per cent to 74 per cent and has also agreed to allow pension funds to invest in IPOs. Benefit of this GoI nod will trickle down to the NPS account holders’ return in the long-term.”
Supratim Bandyopadhyay of PFRDA went on so as to add that earlier pension funds have been allowed to spend money on these shares that had ₹5000 crore market capital and on the identical time it had presence within the Future & Option or F&O section. In the modified state of affairs, a pension fund will be capable of spend money on prime 200 firms of the Indian bourses.
Speaking on how pension fund funding in IPO will result in rise in NPS subscribers’ revenue; SEBI registered tax and funding professional Jitendra Solanki mentioned, “Raising the FDI limit in pension funds from 49 per cent to 74 per cent will lead to rise in sustainability of the pension funds as they will have more capital for investment. Having being allowed to invest in IPOs, pension funds will have an option to create a new avenue for revenue as a company with strong financials and better business model and outlook is expected to beat the benchmark return in long-term by at least one per cent. This will definitely trickle down to the NPs subscribers in the form of NPS return.”
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