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EPFO may pump in Rs25,000-30,000 crore in equities during FY18

Source | LiveMint 

Mumbai: Emerging as a significant source of investments into capital markets, Employees Provident Fund Organisation (EPFO) is likely to pump in Rs250-300 billion in equities in 2017-18 with Rs57 billion already invested this year so far, says a report.

According to global brokerage Morgan Stanley, besides EPFO, the National Pension Scheme (NPS) is also among the sources for driving the domestic flow surge, which has been positive for the past 17 months.

“NPS’ pension assets stood at $30 billion at the end of July. We estimate their equity assets to be at $3.5 billion,” the report said. The report noted that EPFO, which has raised its equity allocation to 15% in the current fiscal from 10% in 2016-17, is “likely to invest Rs250-300 billion in equities in 2017-18 of which Rs57 billion has been invested this year thus far”.

In August, equity flows were positive for the 17th straight month. Year-to-date, domestic mutual funds have received equity inflows of $18.6 billion (tracking at $2.3 billion per month). “By the end of the month, equity mutual fund assets under management (AUM) stood at $111 billion, and as a percentage of market cap rose to 5.3%, its highest level since July 2000,” Morgan Stanley said. “Similarly, equity ETF assets rose to new highs of $8.4 billion. Year-to-date, ETF inflows stood at $2.6 billion (Rs169 billion),” it added.

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