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Informist, Monday, May 4, 2026

 

--PFRDA source: Evaluating Motilal Oswal plan to set up pension fund co

--PFRDA source: Got applications from a few cos to start pension fund ops

 

By Sagar Sen and Priyasmita Dutta

 

NEW DELHI – The Pension Fund Regulatory and Development Authority is evaluating a proposal from Motilal Oswal Financial Services Ltd. to set up a pension fund as a direct or step-down subsidiary, a senior official at the pension sector regulator said. "We have received applications from a few companies that want to start pension fund operations," the official told Informist. "Motilal Oswal is among them, and we are evaluating the proposal."

 

Motilal Oswal Financial Services has several subsidiaries and the pension arm is likely to be set up under Motilal Oswal Asset Management Co. Ltd., the official said. The move is expected to help the financial services company establish a foothold in the growing pension sector in India.

 

On a consolidated basis for the financial year 2025-26 (Apr-Mar), Motilal Oswal Financial Services reported a net profit of INR 18.69 billion, down 25% on year, on revenues of INR 93.74 billion, up 12%. As of Mar. 31, the company had assets under management of INR 3.7 trillion for its asset management and private wealth management businesses.

 

Pension fund managers handle the pension fund corpus under the National Pension System. According to PFRDA norms, a company may approach the regulator to apply as a sponsor to float a pension fund management company. The company proposes to hold 20% or more of paid-up equity capital in the pension fund, the norm says.

 

Neither the company nor the regulator had responded to queries from Informist till the time of publication of this report. Monday, shares of Motilal Oswal Financial Services closed 4.5% higher at INR 836.60 on the National Stock Exchange.

 

The regulator mandates that companies aspiring to be pension fund managers must have a net worth of at least INR 500 million for the preceding five financial years and a paid-up capital of at least INR 250 million. The sponsor must also have experience in managing funds for at least five years. The norms also stipulate that the company backing the pension fund should be an entity engaged in financial business activity and regulated by the Reserve Bank of India, Securities and Exchange Board of India, or the Insurance Regulatory and Development Authority of India. It must also have INR 500 billion of monthly average assets under management.

 

Currently, 10 pension fund managers operate under PFRDA--LIC Pension Fund Ltd., SBI Pension Funds Pvt. Ltd., UTI Pension Fund Ltd., HDFC Pension Fund Management Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension Fund Ltd., Aditya Birla Sun Life Pension Fund Management Ltd., Tata Pension Fund Management Pvt. Ltd., Axis Pension Fund Management Ltd., and DSP Pension Fund Managers Pvt. Ltd. Together, they manage a pension corpus of INR 16.5 trillion.

 

In April, PPFAS Asset Management Pvt. Ltd. had received approval from the PFRDA to sponsor a pension fund management company.

 

In January, the PFRDA board had also approved a framework allowing scheduled commercial banks to independently set up pension funds to manage the pension corpus. "By introducing clearly defined eligibility criteria based on net worth, market capitalisation and prudential soundness in line with RBI norms, it will ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds," a government release had said at the time. This was aimed at addressing regulatory constraints that have so far limited bank participation in managing the pension corpus.  End

 

Edited by Rajeev Pai

 

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