Riding on a roaring bull market in equities in the last one year, pension funds have clocked a robust average 25.25 per cent annual return in equities, latest PFRDA data showed.

This average annual return of 25.25 per cent in equities — as of January 27, 2024  — is more than triple the return of about 7.34 per cent seen in corporate bonds; 8.46 per cent in Government Securities, and about 10.16 per cent in Central and 10.11 per cent in State government schemes, data showed.

Over the last three-year period, the seven pension funds have generated an average equities return of 17.11 per cent. The average return from equities since inception of NPS stood at 13.13 per cent.

Meanwhile, overall National Pension System (NPS) assets — including Atal Pension Yojana — surpassed a new milestone of ₹11-lakh crore, touching a level of ₹11.07-lakh crore as of January 27, up 28.37 per cent on a year-on-year basis. Of the total NPS AUM of ₹ 11.07-lakh crore, the total NPS monies parked in equities stood at about ₹2-lakh crore. 

On January 28 last year, NPS assets stood at ₹8.63-lakh crore.

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

Equity markets in India  have been on a roll since 2023 — especially in the last two months of the year —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.  FPIs pumped in over $ 20 billion in Indian equities in calendar 2023.

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. 

A recent Jefferies note forecast the December 2024 Nifty50 target at 24,000.

 

Subscribers

The robust growth in NPS assets was aided by strong show on the ‘corporate’ and ‘all citizens model’ categories. In the last 12 months, as of January 27, as many as 8.4 lakh new subscribers have joined NPS.

Of this, 8.4 lakh new subscribers, as many as 5.8 lakh subscribers came in through the ‘all citizens model’, and the rest 2.6 lakh in corporate model.

The total number of NPS and APY subscribers as of January 27 this year stood at 7.11 crore, up 16 per cent over 6.14 crore in year ago.

PFRDA this fiscal year expects atleast 13 lakh new subscribers from both Corporates and all citizen categories. Last fiscal year PFRDA had added a million new subscribers.

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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.

Interim Budget

Meanwhile, the interim budget slated for February 1 (Thursday) is likely to see the Finance Minister Nirmala Sitharaman present a status report on NPS.

A group headed by Finance Secretary T V Somanathan was tasked to review the NPS scheme and submit a report, whose recommendations may find a place in the interim budget speech, sources said. Indications are that government will come up with public consultations before bringing any further tweaks to NPS.

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