NPS assets hit Rs 11.5 lakh crore on strong equity market performance: PFRDA

NPS asset surge: NPS assets soared to Rs 11.50 trillion, boosted by strong performance in the equity markets, recent data shows. According to the latest figures from the PFRDA, pension fund investments in equities have outstripped corporate bonds by more than fourfold, surpassing returns from government securities and state government schemes.

Over the past three years, pension funds have seen an average return of 17.7 per cent in equities, contributing to the overall growth. As of March 1, 2024, pension funds have yielded an average annual return of 34.27 per cent, largely driven by the bullish equity market.

Bond and scheme yields

The PFRDA data indicates that corporate bonds yielded an annual return of 8.48 per cent over the last year, while government securities saw a return of 10.5 per cent. Central and State government schemes recorded annual returns of 12.71 per cent and 12.67 per cent, respectively.

The total assets under NPS, including APY, have surged by 30 per cent year-on-year (YoY), reaching Rs 11.50 trillion as of March 2. Equity allocations accounted for approximately Rs 2.1 trillion of this total.

Subscribers surge

The number of NPS and APY subscribers has also increased, reaching 7.25 crore as of March 2, marking a 16 per cent rise from the previous year's 6.25 crore.

NPS has witnessed major growth milestones over the years. It took six years and six months to reach Rs 1 trillion AUM after its inception in 2009, and further increased to Rs 5 trillion in 4 years and 11 months. Last year, NPS AUM doubled from Rs 5 trillion to Rs 10 trillion in just 2 years and 10 months.

Equities outperform others

In December 2023, pension funds recorded an average annual return of 16.94 per cent in equities, surpassing returns from other investment avenues such as corporate bonds and government securities.

In February 2024, India's market capitalisation hit a record high, nearing the Rs 400 trillion mark before closing at Rs 388 trillion.