Rs 42.5 lakh crore and growing: why SEBI is watching India’s PMS industry closely
SEBI says its artificial intelligence systems are generating a growing number of alerts pointing to front-running patterns inside India's portfolio management services industry.
India’s portfolio management services (PMS) industry now manages assets worth Rs 42.5 lakh crore, and that figure is expected to keep climbing. It is also, according to India’s market regulator, an industry where AI-driven surveillance has started picking up a pattern nobody expected to find there.
SEBI executive director Manoj Kumar disclosed the finding at the Association of Portfolio Managers in India’s (APMI) PMS Leadership Conclave 2026 in Chennai. ‘Recently, we have noticed our AI generating enough alerts, and over a period of time, the patterns emerging from those alerts suggest that a certain amount of front-running is also happening in the PMS industry,’ he said. ‘We always believed this was something largely confined to the mutual fund space. But of late, we have observed that it is happening in PMS as well. We are analysing how it has impacted investors.’
Kumar said the regulator’s response would depend on intent. ‘We always see that when you operate, there can be some unintended violations. As long as these violations remain unintended, we are very, very accommodative. We will listen to your viewpoint,’ he said. He added that the broader goal was to raise awareness within the PMS industry and discourage conduct that investors could view negatively, cautioning that deliberate offenders would eventually invite regulatory scrutiny and enforcement.
Kumar also confirmed SEBI is revamping the regulatory framework for the PMS industry, with a consultation paper expected soon to make the rules easier to understand and improve ease of doing business for licensed participants.
APMI chairman Biharilal Deora, speaking to TOI on the sidelines of the conclave, said the coming review would support the industry’s continued growth. The framework was last comprehensively reviewed in 2020, after its original introduction in 1993, and is now being revisited again within a much shorter interval — a sign, industry watchers say, of how fast the PMS space managing that Rs 42.5 lakh crore pool is evolving.
Wikimedia Commons/by Rakesh from Bangalore
Leave a Reply