Business & Investment

Investing in an IPO: PFRDA urges pension funds to develop board-approved investment policies

Pension regulator PFRDA advises pension funds to develop detailed policies for initial public offering (IPO) investments and obtain board approval. According to PFRDA, the investment teams of these funds can make routine decisions subject to compliance with investment policies.

This is stipulated in the latest guidelines for public offerings and / or offer offers under other pension schemes regulated / controlled by pension funds, national pension schemes and authorities for investment in IPOs.

The Pension Fund Regulatory Development Authority (PFRDA) has recommended guidelines that stipulate that investments can only be invested in the shares of such companies through an IPO. The IPO is higher than the market capitalization of the 200th company on the list of the top 200 BSE or NSE-listed body companies offered by the NPS Trust. The introduction of this threshold means that pension fund managers have little room to invest in IPOs of very small businesses. According to calculations on the back of the envelope, IPOs of companies with a market capitalization of more than Rs 20,000 after issuance may only be eligible for pension investment, capital market observers said.

Regarding investment in subsequent public offerings (FPOs) or offerings (OFS), according to the guidelines, investments in shares can be made in shares of a corporation listed on BSE or NSE. Full market capitalization conditions. Pension funds are advised to adopt the last published stock list prepared by the NPS Trust from time to time in this regard.

Raise FDI

Pension regulators’ move to allow pension funds to invest in specific IPOs and FPOs / OFS companies that make up part of the BSE / NSE Top 200 list has increased foreign direct investment (FDI) from 49% to 74% After pulling it up. ..

To date, pension funds have only been allowed to invest in shares of BSE or NSE-listed companies that have a market capitalization of 5,000 chlores or more and are part of the F & O segment as of the date of investment. rice field.

Domestic pension assets under management (AUM) are growing at over 30% and have recently exceeded Rs 60,000. PFRDA expects total AUM to reach Rs 75,000 by the end of March 2022.

Investing in an IPO: PFRDA urges pension funds to develop board-approved investment policies

https://www.thehindubusinessline.com/news/investment-in-ipos-pfrda-asks-pension-funds-to-formulate-board-approved-investment-policy/article35652735.ece Investing in an IPO: PFRDA urges pension funds to develop board-approved investment policies

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