Pension regulator PFRDA has already enabled pension fund managers to participate in the upcoming ₹21,000-crore mega LIC Initial Public Offering (IPO), said its Chairman Supratim Bandyopadhyay.
“There is no restriction from our end. We had already allowed pension fund managers to invest in IPOs, and they have also done in few of them. Now, they can invest in LIC IPO, too, but the final investment decision rests only with them and there is no regulatory bar or restriction,” Bandyopadhyay told BusinessLine.
After the government recently decided to scale down the LIC IPO size and pegged the price band at ₹902-949, the pricing has “become quite attractive”, especially for retail investors and policyholders, who are also going to get discounts on the discovered price, Bandyopadhyay added.
Meanwhile, Bandyopadhyay said that PFRDA will, in the next few weeks, firm up the assets under management (AUM) target for the current fiscal. Last fiscal year, PFRDA had initially targeted pension AUM of ₹7.5-lakh crore by March-end, but finished the fiscal at about ₹7.37-lakh crore.
“Last fiscal, our AUM had recorded about 27 per cent growth. Even this fiscal we may have to settle for similar growth aim, given the ongoing volatility in markets. Volatility has not stopped and equity and bond markets continue to be choppy,” he added.
Bandyopadhyay said that PFRDA is hopeful of rolling out its minimum assured return scheme (MARS) under the National Pension System (NPS) by September-end.
“I will have a meeting with the consultant (EY Actuarial Services LLP) next month. Consultant had come up with six to seven constructs for the proposed product. We have to finalise one of them. It should be ready for roll out by September end,” said Bandyopadhyay.
The whole idea behind having MARS is to have a separate scheme that can offer a guaranteed minimum rate of return to NPS subscribers, especially those who are risk averse. Currently, the NPS gives returns annually, based on prevailing market conditions.
Atal Pension Yojana (APY), a flagship scheme that caters to the unorganised sector workers, economically disadvantaged/underprivileged citizens of the country, saw 99 lakh new accounts sourced in 2021-22 as against target of 1 crore set by PFRDA.
Bandyopadhyay said PFRDA will aim for 1.5 crore new APY enrolments this fiscal. Meanwhile, Department of Financial Services Secretary, Sanjay Malhotra, who addressed an APY annual awards event on Thursday, urged banks and APY service providers to do 2 crore new accounts this fiscal, given that they had been able to enroll 1 crore people under APY last fiscal.
Up to March-end, nearly 4.01 crore subscribers have enrolled under the APY scheme. The APY scheme is open to all citizens of India between 18-40 years of age and there is huge opportunity as there are 45 crore eligible people between 18-40 years.