India Opens $177 Billion Pension Pool to Wider Investments
The regulator has also removed the requirement for sponsor ratings for real estate investment trusts and infrastructure investment trusts.
India’s pension regulator has broadened investment opportunities for National Pension System fund managers, allowing deeper participation in equities, bonds and alternative assets as part of a sweeping update to investment norms.
Under the revised guidelines issued on Wednesday, pension funds, which collectively manage about $177 billion in assets, may now invest in constituent stocks on the Nifty 250 and BSE 250 indices, expanding the universe from the earlier cap that relied on the top 200 listed companies. The move is expected to improve diversification and liquidity across portfolios as assets under management continue to surge.
In a significant easing of credit norms, the Pension Fund Regulatory and Development Authority will partly permit investment in select debt securities where “rating from only one credit rating agency will be sufficient,” it said.
The regulator has also removed the requirement for sponsor ratings for real estate investment trusts and infrastructure investment trusts, boosting allocations to yield-generating infrastructure and real estate assets. Additionally, NPS schemes can now invest in gold and silver exchange-traded funds, adding commodities exposure for the first time.
The updates, which take effect immediately, reflect the regulator’s push to modernize investment architecture and expand avenues for long-term returns while maintaining prudential safeguards.
