PMS industry's inflows jump over three-fold in September as debt cushions equity correction

APMI leadership has said the changes could expand the client base from roughly 2 lakh to 10 lakh over the next three to four years. It was a difficult month for equities as the Sensex declined 5.8%, the Nifty fell 6.1%, and foreign portfolio investors sold roughly Rs 30,400 crore of Indian equities. Yet total PMS assets under management rose 0.1% to a record Rs 44.41 lakh crore, while client accounts expanded 0.9% to about 2.28 lakh.

The September flows were driven largely by a rotation within PMS portfolios rather than fresh risk-taking. Plain-debt allocations rose 0.9%, adding Rs 29,491 crore and extending debt’s dominance to more than 83% of industry assets. Equity holdings, by contrast, fell 3.2%, or Rs 14,900 crore, while mutual-fund holdings declined 5.6%, or ₹10,958 crore. This was broadly consistent with the mark-to-market impact of the equity correction.

In effect, the industry added to debt even as equity valuations were marked lower, allowing total AUM to edge higher despite weak markets. The debt tilt also aligns with the industry’s expanding mandate. Under SEBI’s revised framework, discretionary PMS managers can allocate up to 10% of client assets to unlisted investment-grade debt with client consent, giving managers a new avenue to build fixed-income portfolios beyond listed bonds.

Discretionary PMS portfolios attracted Rs 7,274 crore in net inflows during the month. More significantly, discretionary inflows excluding EPFO-linked managers turned positive at Rs 3,224 crore, up from Rs 1,684 crore in August. Non-discretionary services added a further ₹1,649 crore. The improvement is notable because it marks the second consecutive month of positive non-EPFO discretionary flows, suggesting that the recovery was not solely dependent on large provident-fund mandates.

EPFO and other provident-fund assets remained the largest component of the industry, at Rs 33.29 lakh crore. These assets more than accounted for the overall increase in industry AUM during September. The non-EPFO book, at Rs 11.12 lakh crore, declined 1.4% as market-linked portfolios absorbed the equity drawdown. Domestic investors continue to dominate the industry, accounting for 91% of client accounts and 95% of assets under management.

September’s data point to a pattern often seen during periods of equity volatility: rather than exiting PMS structures altogether, investors and managers shifted allocations toward debt within the same framework. The result was a record AUM print, a sharp rise in net inflows and a decisive tilt toward fixed income (even as equities and mutual-fund holdings were marked lower). SEBI Chairman Tuhin Kanta Pandey said last month that PMS could potentially grow at more than 20% annually as India’s investment universe expands, while stressing that the industry must clearly define its niche rather than compete directly with every other investment product.moneycontrol

PMS assets have grown from Rs 18.07 lakh crore in April 2019 to Rs 42.61 lakh crore as of May 2026, while the number of registered portfolio managers rose from 226 to 515 over the same period.moneycontrol The industry has also been pushing for easier access. APMI had earlier sought a lower entry threshold, simpler digital onboarding and rationalised investment-holding norms.