2 days ago
Digital onboarding, centralised data key to next leg of PMS growth: Biharilal Deora
Biharilal Deora emphasizes that India's Portfolio Management Services (PMS) industry is poised for significant expansion, contingent on accelerating digital onboarding processes and enhancing access to standardized data. APMI's efforts in data collection and the launch of 'APMI Insights' are pivotal for transparency. Deora anticipates substantial growth, driven by India's economic trajectory and increasing investor sophistication.
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The Portfolio Management Services ( PMS ) industry in India is on the cusp of a major growth phase, but unlocking its full potential will require faster adoption of digital onboarding and better access to standardised industry data , according to Biharilal Deora, Director at Abakkus Asset Manager LLP and Board Member of the Association of Portfolio Managers in India ( APMI ).Speaking to ETMarkets on the sidelines of the APMI conference in Mumbai, Deora noted that the association has made rapid progress in just three years, now representing around 320 members covering nearly 96% of the PMS industry 's assets under management ( AUM ) — a level that took other industry bodies decades to key priority for the association is simplifying account opening through digital onboarding, an area where PMS players still lag behind mutual funds and broking firms, which saw accelerated adoption post-COVID. 'We are working with SEBI to ease digital onboarding. This could solve many pain points for PMS account openings across the industry,' Deora major focus is data transparency. While mutual funds and other industries routinely publish key metrics like SIP numbers and AUM trends, the PMS industry lacked centralised, verified data until recently. To address this, APMI began collecting data on behalf of SEBI two years ago, covering performance, assets, and other key indicators. This effort culminated in the launch of 'APMI Insights', unveiled by the NSE MD, which offers a single-window view of the platform provides comprehensive information on AUM movements, returns over multiple timeframes, portfolio turnover ratios, and cash positions — eliminating the need for investors to check individual PMS websites. 'Now, clients can access audited, standardised net TWRR-based performance data across managers at one place,' Deora said, adding that PMS is the only industry with such standardised performance PMS industry currently manages about ₹5.5 lakh crore in total discretionary and non-discretionary assets, with discretionary AUM at roughly ₹2 lakh crore spread across just two lakh clients, implying an average ticket size of around ₹1 crore. While AUM has been growing at 23–25% annually over the past five years, client growth has been slower at 4–5% — a gap Deora believes will narrow as more wealthy individuals seek customised, alpha-driven the global trend where separately managed accounts (SMAs) often outpace mutual funds in size, Deora sees a similar shift in India. 'We are waiting for our 'COVID moment' — a tipping point when adoption accelerates exponentially, just like it did for mutual funds. The structure of PMS, with boutique managers competing purely on skill, offers unique value for clients,' he ahead, Deora expects the PMS industry to double every 5–7 years in line with India's projected GDP growth and rising per capita income, driven by liquidity events, business listings, and the ongoing financialisation of savings. 'Mutual funds are good, but PMS is also important. As investor literacy grows, the conversation will shift from explaining what equity is to explaining why our strategies are different. That's when the real growth will come,' he added.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
