Domestic pension funds make record equity investments of ₹41,242 crore between Jan-Sept, Pg15.

Key Highlights:

• Domestic pension funds invested a record ₹41,242 crore net in equity markets from January to September 2025.
• New Pension System (NPS) inflows reached ₹7,899 crore in August 2025, the highest in recent months, and ₹7,867 crore in September 2025.
• Equity investments by pension funds under the NPS category have consistently increased from ₹629 crore in 2021 to ₹13,329 crore in 2024.
• Pension Fund Regulatory and Development Authority (PFRDA) norms increased the investment limit for pension funds in equity to 25% from 15% effective April 1, 2025.

Detailed Insights:

• The surge in equity investments by pension funds is attributed to strong market returns and the need to achieve higher returns amid declining yields from fixed-income instruments.
• PFRDA's revised norms allow pension funds to invest in both large-cap and mid-cap stocks, providing greater flexibility in their investment strategies.
• Increased investment limits in equity instruments enable pension funds to meet their target returns, which were previously achievable through fixed instruments.
• Strong preference for equities has led to higher inflows from insurance, mutual funds, and pension funds into the stock markets, driven by the perception of stocks as the best-performing asset class over the long run.

Key Concepts Involved:

• Pension Funds: Entities that manage and invest retirement savings to provide income to pensioners.
• Equity Markets: Platforms where shares of publicly listed companies are traded.
• New Pension System (NPS): A government-sponsored pension scheme that allows individuals to contribute towards their retirement.
• PFRDA: The regulatory body responsible for overseeing and regulating pension funds in India.