On Friday, SEBI announced a revised framework for portfolio management services (PMS) that now permits mutual‑fund‑only PMS (MF‑PMS) with a minimum investment of ₹25 lakh. The move removes the earlier ₹50 lakh ceiling and removes the requirement that a PMS portfolio contain at least 50 % of its assets in equities. For the average retail investor, the change means that a broader slice of the market can now tap professionally managed, diversified portfolios that were previously the preserve of high‑net‑worth individuals.
By lowering the entry barrier, SEBI hopes to broaden the investor base and improve financial inclusion. However, investors should still weigh the higher management fees typical of PMS against the potential for higher returns and the need for active monitoring. Asset‑management houses are already preparing to roll out new MF‑PMS products, and the sector could see a surge in client onboarding.
The revised rules also require PMS providers to disclose more granular performance data and to maintain a minimum 10 % equity exposure, which could encourage a more balanced risk profile across the market. The announcement arrives as the Sensex and Nifty 50 are trading near 50‑year highs, and retail participation in equity markets has been on the rise. With more investors able to access customized mutual‑fund portfolios, the breadth of exposure across sectors such as technology, consumer staples, and infrastructure could deepen, potentially adding resilience to the broader market.