NPS assets soar 30% YoY: A deep dive into the robust growth and bullish equities

The National Pension System (NPS) has witnessed a phenomenal 30% year-on-year growth, reaching an impressive ₹11.38 lakh crore in assets. Among the key contributors to this growth is the substantial amount of ₹2 lakh crore strategically invested in equities. The latest data from the Pension Fund Regulatory and Development Authority (PFRDA) reveals a remarkable average annual return of 28.66% from equity investments as of February 16, 2024, outshining other investment avenues.

The NPS assets’ stellar performance is attributed to the roaring bull markets in equities, allowing Pension Funds to achieve an outstanding average annual return of 28.66%. This figure significantly outpaces returns from Corporate Bonds (8.17%), government securities (9.91%), and Central (11.60%) and State government schemes (11.56%).


Amid this strong equity performance, foreign brokerage Jefferies has expressed optimism about India’s economic growth. Jefferies predicts India’s market capitalization, currently the 5th largest globally at US $4.5 trillion, to reach $10 trillion by 2030. The brokerage notes India’s low weight in global indices (1.6%) is expected to rise as market free float increases, presenting an attractive opportunity for large global investors.

The overall NPS assets, including the Atal Pension Yojana, have grown robustly by 30% YoY, reaching ₹11.38 lakh crore as of February 16. Out of this, ₹2 lakh crore is invested in equities, showcasing the significant role of equity investments in the NPS portfolio.

The growth in NPS assets is complemented by a surge in subscriber numbers. The ‘Corporate’ and ‘all citizens model’ categories have particularly shown robust performances, with 7.31 lakh new subscribers joining NPS until February 16. PFRDA aims to reach at least a million new subscribers by March 2024, building on the success of adding a million subscribers in the previous fiscal year.

Indian equity markets have been on an upward trajectory, fueled by strong domestic inflows and the return of Foreign Portfolio Investors (FPIs) in 2023. Despite FPIs turning net sellers in equities this year, analysts remain optimistic about the prospects of Indian equities in 2024. The ongoing bull run is supported by a robust macroeconomic situation and expectations of continuity in the current political landscape.

The NPS’s remarkable growth, propelled by strong equity performance and a surge in subscribers, underlines its position as a dynamic and lucrative investment avenue. With bullish market sentiments and a positive outlook for Indian equities, the NPS continues to be a favored choice for individuals seeking long-term wealth creation and financial security in their retirement years.