Key takeaways
- SEBI sets the minimum investment in a PMS at ₹50 lakh per investor.
- It can be met with money, with securities you already own, or with a combination of the two.
- The minimum applies per portfolio manager, not across your whole portfolio — two PMS strategies with two managers need ₹50 lakh each.
- Top-ups after the minimum is met can usually be smaller.
- You cannot withdraw below the minimum and stay invested; partial withdrawals must leave ₹50 lakh in place.
The rule, and where it comes from
Under the SEBI (Portfolio Managers) Regulations, 2020, a portfolio manager cannot accept less than ₹50 lakh from a client. The floor was raised from ₹25 lakh in November 2019, on the reasoning that a concentrated, actively managed portfolio with limited liquidity belongs with investors who can absorb its risks.
It is a regulatory floor, not a marketing threshold: no portfolio manager can waive it, and any offer to structure around it should be treated as a warning sign rather than a favour.
What counts towards the ₹50 lakh
- Money transferred from your own bank account.
- Securities you already hold — listed shares moved from your demat account, valued at the market price on the day they are transferred in.
- A combination of the two, which is how many investors meet it.
Moving shares into a PMS account held in your own name is not a sale, so it does not itself create a tax liability. But the manager may sell holdings that do not fit the strategy, and those sales are taxable in your hands — worth modelling before you transfer a large, low-cost holding. See how PMS and AIFs are taxed.
Per manager, not per portfolio
The minimum applies to each portfolio manager you appoint. Splitting ₹50 lakh across two managers is not possible; running two strategies with two managers means ₹1 crore in total.
That has a practical consequence for diversification. An investor with ₹60 lakh cannot spread across three PMS strategies, and probably should not try — a single strategy plus low-cost funds is usually the better-constructed portfolio. Our due diligence checklist covers how many strategies actually add value.
Top-ups and withdrawals
- Top-ups: once the ₹50 lakh minimum is in place, additional contributions can usually be smaller, subject to the manager’s own terms.
- Partial withdrawals: allowed, provided the account stays at or above ₹50 lakh afterwards.
- Falling below through market losses: this does not force you out. The minimum applies to what you put in, not to the account value after markets move.
- Exit loads are capped by SEBI at 3% in the first year, 2% in the second and 1% in the third, with none after that.
How it compares with other products
| Product | Minimum investment |
|---|---|
| Mutual funds | A few hundred rupees, lump sum or SIP |
| Specialised Investment Funds (SIFs) | ₹10 lakh across the fund house, under SEBI’s framework |
| PMS | ₹50 lakh |
| AIF (Category I, II and III) | ₹1 crore |
| GIFT City funds (non-retail schemes) | Typically USD 150,000 |
The gap between mutual funds and PMS is what the newer SIF category was created to fill — see SIFs explained.
If you are below ₹50 lakh
There is no legitimate route into a PMS below the minimum, and the honest answer is usually that you do not need one yet:
- Mutual funds and index funds give you professional management and diversification at a fraction of the cost, with better tax deferral — see PMS vs mutual funds.
- SIFs sit between the two, from ₹10 lakh, with more freedom than a mutual fund.
- Build towards it deliberately. If a PMS is the goal, size it so that ₹50 lakh is a measured part of your portfolio rather than most of it.
Frequently asked questions
What is the minimum investment in a PMS in India?
₹50 lakh per investor, set by SEBI under the Portfolio Managers Regulations, 2020. It cannot be waived by any portfolio manager.
Can I use shares I already own to meet the PMS minimum?
Yes. Listed securities can be transferred in and are valued at the market price on the day of transfer. The transfer itself is not a sale, but any later sale by the manager is taxable in your hands.
Is the ₹50 lakh minimum per strategy or per investor?
It applies per portfolio manager. Two strategies with two different managers require ₹50 lakh each.
Can I withdraw part of my PMS investment?
Yes, provided the account stays at or above ₹50 lakh after the withdrawal. Exit loads are capped at 3%, 2% and 1% in the first three years.
What happens if my PMS falls below ₹50 lakh in value?
Nothing. The minimum applies to what you contribute, not to the account value after market movements.
What can I invest in below ₹50 lakh?
Mutual funds and index funds are the usual route, and Specialised Investment Funds are available from ₹10 lakh under SEBI’s framework.
