How to Invest in PMS in India in 2026 – A Practitioner’s Guide for Serious Investors
Over the years, many investors reach a stage where mutual funds start feeling limited. Portfolios become larger, expectations evolve, and the need for customization and accountability increases. This is usually when Portfolio Management Services (PMS) enters the conversation.
This guide is written from a practitioner and investor-education perspective, not as a product pitch. If you’re evaluating how to invest in PMS in India, this piece will help you understand the mechanics, trade-offs, and real-world considerations that are often missed in generic explainers.
Key Takeaways (What Investors Usually Miss)
- PMS is not an upgrade to mutual funds rather it is a different investing experience altogether.
- The ₹50 lakh minimum exists to ensure investors can absorb volatility and drawdowns.
- PMS outcomes depend more on process discipline and investor behaviour than short-term market movements.
- Understanding what not to expect from PMS is as important as knowing its benefits.
What is Portfolio Management Services (PMS) – In Simple Terms
At its core, Portfolio Management Services (PMS) is a professional arrangement where a SEBI-registered portfolio manager manages your money by investing directly in listed securities. Unlike pooled products, your portfolio is built and tracked individually, security by security.
From practical experience, this individual ownership changes how investors react. Gains feel more tangible but so do drawdowns. This is why PMS is less about convenience and more about alignment, patience, and conviction.
Explore our Detailed Guide to Portfolio Management Services
Who Can Invest in PMS? (And Why the Rules Exist)
SEBI mandates a minimum investment of ₹50,00,000 per investor for PMS. This is not an arbitrary threshold.
In real market cycles, even well-constructed portfolios can see temporary declines of 20–30%. The minimum corpus ensures investors are financially and psychologically equipped to stay invested during such phases.
Key eligibility points:
- ₹50 lakh minimum per individual investor
- No clubbing of family investments
- Mandatory KYC, risk profiling, and PMS agreement
Types of PMS – How Investors Actually Use Them
Discretionary PMS (Most Common)
In practice, most investors opt for discretionary PMS. The portfolio manager makes decisions within a predefined framework, while the investor focuses on long-term outcomes rather than individual trades.
Non-Discretionary PMS (Less Common)
This structure works only when investors have the time and temperament to actively engage. In reality, many underestimate the involvement required.
Explore Types of PMS in Detail
How to Invest in PMS in India – A Realistic Step-by-Step View
Rather than viewing this as a checklist, investors should see it as a filtering process.
Step 1: Evaluate readiness, not just eligibility
Ask whether you can stay invested during prolonged sideways or negative markets.
Step 2: Shortlist providers based on philosophy
Track records matter, but consistency of approach matters more.
Step 3: Onboarding and documentation
KYC, risk profiling, and agreement signing formalise expectations on both sides.
Step 4: Capital deployment
Investments are made gradually or in phases, depending on market conditions.
Step 5: Monitoring and communication
Regular reporting helps investors stay informed but restraint helps them stay invested.
Minimum Investment, Fees and Taxation – What Investors Overlook
Minimum Investment
The ₹50 lakh requirement should be viewed as risk capital, not surplus savings.
Fees
Most PMS structures combine:
- A fixed management fee
- A performance-linked component
From experience, investors should focus less on headline percentages and more on how fees behave during drawdowns and recoveries.
Taxation
Since securities are held in your demat account, taxation follows standard capital gains rules applicable to equities and other instruments.
Detailed Guide to PMS Minimum Investment
PMS vs Mutual Funds vs AIF – Context, Not Comparison
Aspect | PMS | Mutual Funds | AIF |
Investor Involvement | Medium | Low | Medium |
Customisation | High | Low | Medium |
Volatility Experience | Direct | Buffered | Strategy-dependent |
Transparency | Stock-level | NAV-based | Strategy-level |
Each structure serves a different investor mindset. Problems arise only when expectations are misaligned.
PMS vs AIF Difference: Explained
Risks in PMS – The Uncomfortable Truth
PMS portfolios are often concentrated by design. This can enhance outcomes over full cycles, but it also means:
- Sharper interim drawdowns
- Periods of underperformance versus indices
- Emotional stress during volatile markets
Successful PMS investing is as much about investor behaviour as portfolio construction.
Risk in Portfolio Management & Ways to Mitigate
Who PMS Works For (And Who Should Avoid It)
PMS may suit investors who:
- Have multiple income or asset sources
- Can stay invested without reacting to short-term noise
- Prefer clarity over comfort
PMS may disappoint investors who:
- Expect smoother returns
- Track portfolios daily
- Need liquidity certainty
What Happens After You Invest – The Long Middle Phase
The first year often feels uneventful. The real test comes during extended market corrections. This is where communication quality, clarity of strategy, and investor temperament intersect.
How Aequitas Approaches PMS (Perspective, Not Promise)
At Aequitas, PMS strategies are designed around process consistency rather than prediction. The focus remains on understanding businesses, managing downside risk, and aligning portfolios with investor expectations over full market cycles.
This approach is shaped by experience across different market environments, not just favourable ones.
Explore Aequitas Portfolio Management Services
FAQs Based on Real Investor Questions
Is PMS regulated by SEBI?
Yes. All PMS providers operate under SEBI regulations.
Why is the minimum investment so high?
Because PMS portfolios can be volatile and require staying power.
Can PMS underperform for long periods?
Yes. This is normal in active investing and should be expected.
Is PMS better than mutual funds?
It is different, not better. Suitability matters more than structure.
Final Thoughts
PMS is best viewed as a long-term investing partnership, not a return-enhancement tool. For investors who understand its nature and respect its risks, it can play a meaningful role within a broader wealth strategy.
