India’s growing High Net-Worth Individual (HNI) population is driving increased demand for personalized wealth management. One of the most effective tools available today for these investors is Portfolio Management Services (PMS).
This article explores the landscape of PMS for HNIs in India, the types, benefits, performance, taxation, top providers, and how to choose the right one.
What is Portfolio Management Service (PMS)?
Portfolio Management Service is a professional investment service where a SEBI-registered portfolio manager manages your equity, debt, and other investments with a customized approach. Unlike mutual funds, PMS is tailored based on the investor’s financial goals, risk appetite, and time horizon.
Why PMS is Ideal for HNIs?
HNIs typically have larger investable surpluses, require tailored strategies, and expect superior risk-adjusted returns. PMS allows greater flexibility, transparency, and personalization.
Key Reasons HNIs Prefer PMS:
| Feature | Benefit for HNIs |
|---|---|
| Customization | Portfolios built around investor’s goals |
| Higher Transparency | Regular updates and direct stock holdings |
| Professional Fund Management | Managed by experienced portfolio managers |
| Concentrated Bets | Focused strategies to outperform benchmarks |
| Tax Efficiency | Stocks bought in client’s name allow planning |
Eligibility Criteria for PMS in India
As per SEBI regulations, the minimum investment amount for PMS is ₹50 lakhs. This naturally makes it a product designed for affluent investors.
Types of PMS in India
There are two primary types of PMS based on the mode of investment and ownership:
1. Discretionary PMS
The portfolio manager takes all investment decisions on behalf of the client without prior consent.
2. Non-Discretionary PMS
The portfolio manager provides investment advice, but the final decision lies with the client.
3. Advisory PMS
The manager only provides recommendations and does not execute transactions.
Top Portfolio Management Strategies in India
PMS providers in India typically offer a mix of the following strategies:
| Strategy Type | Description |
|---|---|
| Large Cap | Focus on blue-chip companies with strong fundamentals |
| Multicap | Mix of large, mid, and small-cap stocks to balance risk and return |
| Thematic | Invests in themes like ESG, digital transformation, or consumption trends |
| Value Investing | Stocks trading below their intrinsic value |
| Growth Investing | Focus on companies with high earnings growth potential |
| Dividend Yield | High dividend-paying, stable companies |
Top PMS Providers in India for HNIs (2025)
Here’s a list of some of the most reputable PMS providers that cater to HNIs in India:
| PMS Provider | Minimum Investment | Strategy Focus | AUM (Approx.) |
|---|---|---|---|
| Motilal Oswal PMS | ₹50 lakhs | Value & Multicap | ₹38,000+ crore |
| ASK Investment Managers | ₹50 lakhs | Quality Growth | ₹30,000+ crore |
| ICICI Prudential PMS | ₹50 lakhs | Multicap, Thematic | ₹20,000+ crore |
| Kotak PMS | ₹50 lakhs | Thematic, Long-Term Equity | ₹25,000+ crore |
| Marcellus Investment PMS | ₹50 lakhs | Consistent Compounders | ₹12,000+ crore |
| Abakkus Asset Manager | ₹50 lakhs | Mid & Small Cap Focus | ₹10,000+ crore |
Note: AUMs and offerings are approximate and subject to change. Always verify from the official website.
How to Choose the Right PMS Provider
1. Track Record
Look for a consistent performance history over multiple market cycles (at least 5 years).
2. Investment Philosophy
Understand the fund manager’s core belief system. For example, value vs growth, or momentum vs fundamentals.
3. Transparency and Reporting
Ensure regular updates, portfolio disclosures, and compliance standards are maintained.
4. Fees and Charges
Check the total cost, including:
| Fee Type | Details |
|---|---|
| Management Fee | Typically 1-2.5% per annum |
| Performance Fee | 10-20% of returns over a hurdle rate |
| Custodian Charges | Nominal; varies by custodian |
| Exit Load | Usually applicable if exited within 1-2 years |
PMS Performance vs Mutual Funds
| Parameter | PMS | Mutual Funds |
|---|---|---|
| Minimum Investment | ₹50 lakhs | ₹500 |
| Customization | High | Low |
| Transparency | Portfolio visible to client | Fund-level NAV |
| Tax Treatment | Stocks in client’s name | Capital gains via mutual fund |
| Fees | Higher (fixed + variable) | Lower (usually 1–2% TER) |
| Liquidity | Lower (lock-in or exit load) | High liquidity |
Tax Implications of PMS in India
Investments under PMS are held in the investor’s name, so the tax liability is borne by the investor directly.
Tax Structure:
| Income Type | Tax Rate |
|---|---|
| Long-Term Capital Gains (LTCG) | 10% above ₹1 lakh (after 1 year) |
| Short-Term Capital Gains (STCG) | 15% (within 1 year) |
| Dividend Income | Taxed as per income tax slab |
You will receive a Capital Gains Statement from your PMS provider for tax filing purposes.
Risks Associated with PMS
While PMS offers a premium investment experience, it comes with its own set of risks:
- Concentration Risk – PMS portfolios may have fewer stocks, increasing exposure.
- Market Risk – Like any equity-linked instrument, PMS returns are market-dependent.
- Manager Risk – Success heavily depends on the fund manager’s skill and decisions.
- Liquidity Risk – Exit loads or lock-in periods may restrict early redemption.
Tip: Always review the Disclosure Document of the PMS scheme before investing.
How to Invest in PMS in India
Step-by-Step Process:
- Evaluate Your Financial Goals
- Are you aiming for long-term wealth creation, regular income, or capital preservation?
- Select a Reputed PMS Provider
- Based on past performance, AUM, and strategies offered.
- Complete KYC
- PAN, Aadhaar, address proof, income proof, etc.
- Open Demat and Bank Account
- For fund flow and stock holding in your name.
- Sign PMS Agreement
- Outlining fee structure, investment mandate, rights, and duties.
- Fund the Account
- Invest the minimum required amount (₹50 lakhs or more).
Is PMS Right for You?
PMS is suited for:
- Investors with high capital base (₹50L+)
- Those looking for active fund management
- Long-term investors comfortable with moderate to high risk
- Individuals requiring tax-efficient and transparent structures
If you prefer hand-holding, discipline, and diversification, mutual funds may still be a better fit.
Future Outlook of PMS in India
With the rising number of HNIs, especially in tier-2 and tier-3 cities, PMS is expected to grow at a CAGR of 18–20% over the next 5 years. Innovations like ESG-focused PMS, AI-driven models, and global exposure strategies are redefining this space.
Final Thoughts
Portfolio Management Services offer HNIs in India a sophisticated, customizable investment experience designed to outperform traditional avenues. With better control, transparency, and potential for higher returns, PMS is steadily becoming a preferred choice for affluent investors.
However, careful selection of the right strategy and provider is critical to ensuring it aligns with your financial objectives and risk appetite.
Frequently Asked Questions (FAQs)
Q1. What is the minimum investment in PMS?
A: As per SEBI guidelines, ₹50 lakhs.
Q2. Can NRIs invest in PMS in India?
A: Yes, subject to FEMA compliance and specific PMS provider policies.
Q3. Is PMS taxable?
A: Yes, capital gains and dividends are taxed in the hands of the investor.
Q4. Can I exit PMS anytime?
A: Yes, but check for exit loads or lock-in clauses in the agreement.