The Securities and Exchange Board of India has notified a new rulebook for portfolio management services, set to take effect in April 2027. The SEBI (Portfolio Managers) Regulations, 2026, replace the 2020 framework and significantly expand the investment avenues available to managers of high-net-worth money. Portfolio managers can now invest client funds in initial public offerings and primary market issuances of debt securities. They are also permitted to allocate to overseas securities, subject to conditions, and to hold limited exposure to unlisted debt.
A key structural change is the introduction of the Portfolio Managers Route for Investing in Mutual Fund units, or PRIM. This dedicated channel allows PMS providers to construct portfolios solely of direct plans of Indian mutual funds, including ETFs and index funds. The minimum investment under PRIM is ₹25 lakh, half the ₹50 lakh threshold for a regular PMS mandate. Entities offering only the PRIM route face a lower capital requirement of ₹2 crore in net worth, compared to ₹5 crore for full-service portfolio managers.
Business model shift
The new rules alter the economics and client acquisition strategy for wealth management firms. The lower PRIM entry point allows providers to target a slightly broader affluent clientele with a packaged mutual fund portfolio, competing directly with mutual fund distributors and wealth tech platforms. Simultaneously, the ability to participate in IPOs and overseas markets gives full-service managers new tools to differentiate their offerings and potentially generate alpha for their ultra-high-net-worth clients.
The regulatory shift creates a bifurcated landscape. Large, established portfolio managers like Enam AMC, which reported ₹44,128 crore in PMS AUM, and Alchemy Capital, with over ₹8,200 crore, are equipped to leverage the full suite of new options due to their scale and research capabilities. The common advertising code notified alongside the rules, which allows celebrity endorsements at the brand level, could further aid client acquisition for larger branded players. For HNI investors, the changes mean more product choice and potentially lower-cost access to professional management, but also require closer scrutiny of a manager's specific capabilities in these new asset classes.