NPS assets surge to Rs 11.50-lakh cr on bullish equity markets: Report

Pension funds have given an average annual return of 34.27% as of March 1, 2024, thanks to the bullish equity bonds. Latest PFDRA data revealed that the pension fund investments in the equity markets have surpassed corporate bonds by over four times, outperforming government securities and state government schemes, the Businessline reported. 

Over the past three years, pension funds achieved an average return of 17.7% in equities, while the equity returns since the National Pension System (NPS) inception was somewhere around 13.56%. 

The PFRDA data showed that in comparison to equity markets, corporate bonds recorded an annual return of 8.48% in last one year. The government securities saw a return of 10.5 per cent. The annual return from Central and State government schemes stood at 12.71 and 12.67 per cent, respectively.

Assets of NPS, including Atal Pension Yojana (APY), grew by 30% year-on-year (YoY), reaching Rs 11.50-lakh crore, data till March 2 showed. Of this, equity allocations was about Rs 2.1-lakh crore.

The total number of NPS and APY subscribers as of March 2 was at 7.25 crore, up 16% over 6.25 crore in year ago period.

NPS took six years and six months to reach the milestone of Rs 1-lakh crore AUM after its implementation in the year 2009. It then took 4 years and 11 months to further increase AUM to Rs 5-lakh crore.  

NPS AUM had doubled to FRs 10-lakh crore as of August 25 last year from Rs 5-lakh crore in a span of just 2 years and 10 months.

In December 2023, pension funds recorded an average of 16.94 per cent annual return in equities.

The average annual return of 16.94% in equities was more than double the return of about 7 per cent seen in Corporate Bonds; 7.10% in Government Securities and about 8.2% in Central and State Government Schemes, PFRDA data showed.

In February 2024, India’s market cap hit a fresh record high and even edged close to the Rs 400-lakh crore mark before finishing at Rs 388 lakh crore.

This week, stock markets ended with gains as global rating agency Moody’s has raised India’s Gross Domestic Product (GDP) growth forecast for 2024 calendar year to 6.8%, from 6.1% estimated earlier.  The BSE Sensex surged 313 points to close at 74,119.39 on March 7. While the Nifty jumped 115 points, or 0.51%, to 22493.55.