The pros and cons of pension funds being allowed to invest in IPOs
Since pensions are the chief, and in many cases, the only source of income for senior citizens, PFRDA should ensure that such funds should not take undue risks. This is true especially in the current scenario where loss-making start-ups are tapping the market with atrocious valuations
July 22, 2021 / 10:12 AM IST
In a move that will benefit pensioners over the long term, the Pension Fund Regulatory and Development Authority (PFRDA) has expanded the universe of investment for pension funds. The regulator has allowed fund managers to invest in the shares of the top 200 companies listed on the exchanges and IPOs, FPOs and offers for sale of companies.
Under the present guidelines, pension funds can only invest in listed companies that have a market capitalisation of Rs 5,000 crore and above.