APMI Requests Sebi To Reduce Investment Threshold For PMS

Stakeholders from the Portfolio Management Services (PMS) industry have requested the Securities Exchange Board of India (Sebi)  to lower the minimum investment threshold. Presently, the minimum investment threshold for investors is Rs 50 lakh. Notably, the investment threshold was raised to Rs 50 lakh from Rs 25 lakh on January 20. According to a report by the Times of India, the Association of Portfolio Managers in India (APMI) has made a request to the capital market regulator.

Why Is APMI Requesting A Reduction In Ticket Size

The Association of Portfolio Managers in India (APMI) has requested SEBI to lower the minimum investment threshold for Portfolio Management Services (PMS) citing competition from SIFs and limited growth on account of the high minimum investment threshold.

Competitiveness Against Similar Products

Specialised Investment Funds were introduced by the Sebi in July 2024. Effective from April 1, 2025, investors were allowed to invest in SIFs. SIFs offer a lower minimum investment threshold of Rs 10 lakh. SIFs are pooled investment vehicles, similar to mutual funds and seek to attract investors who desire access to advanced, specialised strategies without facing the high entry barrier of investing in PMS. Thus, the PMS industry now faces competition from SIFs due to the lower Rs 10 lakh ticket size.

APMI's request for the reduction of the ticket size for PMS is aimed at attracting investors who wish to invest upwards of Rs 10 lakh but would find the Rs 50 lakh ticket size too expensive. Additionally, a wider investor base is expected to yield potentially higher Assets Under Management (AUM) for the industry. Considering this, the reduction in the ticket size can potentially make PMS more competitive amid the launch of new investment channels such as SIFs. According to APMI data, the total AUM of the industry is around Rs 38,65,762 crore as of May 31, 2025.

How Can A Lower Threshold Impact Investors

If Sebi approves APMI's request to reduce the minimum investment threshold for PMS it is likely to have some significant effects on investors:

Greater Accessibility

The lower ticket size will allow more investors who have an investable capital of around Rs 25 lakh to access PMS and benefit from features of PMS such as the expertise of professional fund managers. This becomes useful for investors who lack time, knowledge and the inclination to actively manage their own portfolios.

Greater Customisation and Transparency

Sebi's approval for reducing PMS ticket size is likely to allow more high-net-worth investors to have direct ownership of securities in their own demat account, allowing them to have a more personalised portfolio in line with their specific financial goals and risk appetite.

Earlier in August, Sebi Chairman Tuhin Kanta Pandey addressed the Annual Conclave of the Association of Portfolio Managers in India (APMI) and talked about the growth of the PMS industry. He also highlighted the need to increase trust between investors and PMS providers and the need for managers to educate clients about risk-return trade offs and advantages of directly owning securities.

"You must ensure that clients understand the risk-return trade-offs, the bespoke nature of their mandate, and the advantage of directly owning underlying securities - benefits that pooled products may not match. Educating each client on their unique risk appetite is the first step in building a truly diversified portfolio," Pandey said at the event.