Benefiting from the bullish momentum in the equities market over the past year, Pension Funds have recorded an average annual return of nearly 30 percent from their equity investments, latest PFRDA data showed.

This average annual return of 29.35 percent in equities — as of February 3, 2024  —is more than triple the return of about 7.87 percent seen in Corporate Bonds. 

It is also much higher than the 9.61 per cent in Government Securities and about 11.43 per cent in Central and 11.39 per cent in State government Schemes, data showed.

Over the last three-year period, the seven pension funds have generated an average return of 16.89 per cent. The average return from equities since inception of NPS stood at 13.34 percent.

Meanwhile, overall National Pension System (NPS) assets —including Atal Pension Yojana—grew robust 29 per cent on a year-on-year basis as of February 3 at ₹11.26 lakh crore.

Out of the total NPS AUM of ₹ 11.26 lakh crore, the total NPS monies parked in equities stood at about ₹2 lakh crore. 

On February 4 last year, NPS assets stood at ₹ 8.73 lakh crore.

PFRDA Chairman Deepak Mohanty had recently expressed confidence that NPS assets will touch  ₹12 lakh crore by end March 2024.

NUMBER OF NPS SUBSCRIBERS 

The robust growth in NPS assets was aided by strong show on the ‘Corporate’ and ‘all citizens model’ categories. So far this fiscal upto February 4, as many as 6.7 lakh new subscribers have joined NPS.

While All Citizens Model saw 5.59 lakh new subscribers, corporate model saw 1.11 lakh new subscribers. 

PFRDA is hopeful of taking the new subscribers level to atleast a million by end March 2024 although it has targeted addition of 13 lakh new subscribers this fiscal.

In the last 12 months as of February 3, as many as 8.42 lakh new subscribers were onboarded into NPS. Last fiscal year PFRDA had added a million new subscribers.

Of this 8.42 lakh new subscribers, as many as 5.82lakh subscribers came in through ‘All Citizen Model’ and the rest 2.59 lakh in Corporate model.

The total number of NPS and APY subscribers as of February 3 this year stood at 7.13 crore, up 16 per cent over 6.16 crore in year ago.

NPS took six years and six months to reach the milestone of ₹1 lakh crore AUM after its implementation in the year 2009. It then took 4 years and 11 months to further increase AUM to ₹5 lakh crore.  

NPS AUM had doubled to ₹ 10 lakh crore as of August 25 from ₹ 5 lakh crore in a span of just 2 years and ten months.

EQUITIES ON A ROLL 

Equity markets in India  have been on a roll since 2023 —especially in the last three months—on the back of strong domestic inflows from retail investors and also with Foreign Portfolio Investors (FPI) returning to the markets in a big way as net buyers (except for January 2024 where they were net sellers).

Most analysts in the Street have strong outlook for equities in 2024 with many contending that ongoing bull run still has some distance to go given the robust macroeconomic situation and expectations of likely continuity of current dispensation in upcoming 2024 general elections. 

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