How can rich investors deploy money in this market? Country’s top PMS manager explains

India's structural growth story remains robust despite global headwinds, says Anand Shah, CIO-PMS and AIF Investments, ICICI Prudential AMC. In an exclusive interaction with Business Today, the money manager highlighted sectors such as financials, consumer services, and infrastructure are poised to deliver strong returns going forward. With assets under management (AUM) of Rs 22,579 crore as of April 2025, ICICI Prudential AMC holds the leading position in the PMS space. So, what can high-net-worth individuals (HNIs) expect from the market? How can rich investors build wealth in the current environment? And how have select PMS strategies of ICICI Prudential AMC—such as PIPE, Contra, and Value—delivered over 30% annualised returns over the past five years? Shah shared his insights in this exclusive interview. Edited excerpts:

BT: ICICI Prudential Asset Management Company achieved top position in the PMS industry in FY25 in terms of AUM. What have been key drivers behind the growth?

Shah: Being among the top players in the equity PMS discretionary segment is a testament to our commitment to disciplined investing and client-centric strategies. At ICICI Prudential AMC, the PMS vertical is akin to a boutique within an institution. Our aim is to provide investors with niche offerings under the institutional setup.

Growth we believe is largely an outcome of the process we follow. This is where our investment framework - the BMV (Business, Management, Valuation) approach comes in. Here we emphasise on quality businesses with strong management and reasonable valuations. Making this possible is our dedicated research team of over 20-members who help identify companies with strong good business fundamentals.

Complementing this framework is our independent investment risk team, which access the portfolio’s risk profile - given the significant deviation the portfolio tends to have from the index, in a boutique offering like the PMS. Further, the risk in terms of operations, compliance etc. gets systematically addressed when investing through an institutional PMS. That is the strength of investing through an institution. Finally, we believe, our focus on long-term wealth creation, coupled with an understanding of market cycles resonated well with investors, enabling them to be entrusted us with their wealth.

BT: Which factors do you think will drive the growth of PMS industry going ahead? By when do you think AUM of ICICI Prudential PMS may double from here onwards?

Shah: We believe growth is likely to be driven by increasing investor need for differentiated investment solutions. Factors such as rising HNI population, greater financial literacy, and the quest for alpha is expected to propel the industry forward. As for ICICI Prudential PMS, we believe our track record and client’s trust position us well in the coming years.

BT: How has ICICI Prudential AMC's PIPE Strategy delivered nearly 37% annualised return to investors in the past five years? Can you elaborate on the objective and stock selection process for the strategy?

Shah: The PIPE Strategy's has done well on the back of the trajectory seen in the mid-and small-cap space. The value we were able to capture stems from our focus on companies with strong economic moats and leadership qualities. Our rigorous bottom-up stock selection, aims to identify businesses with resilient balance sheets, emphasising management quality and valuation comfort.

BT: The Value Strategy also gained at a CAGR of 30% in the past five years. Can you shed light on the investing style?

Shah: Our Value Strategy aims to identify resilient businesses trading below their intrinsic value. We seek businesses with sustainable earnings, prudent capital allocation, and potential for re-rating. By focusing on sectors and companies overlooked by the market but with hidden growth prospects, we have been able to deliver consistent returns.

BT: How does the Contra Strategy and Quanti-FI Strategy work? What kind of returns can HNIs expect from these strategies?

Shah: The Contra Strategy adopts a contrarian approach, investing in sectors or stocks currently out of favour but with strong fundamentals and potential for revival. For instance, we have capitalised on opportunities in metals and financials during downturns. The Quanti-FI Strategy, on the other hand, leverages quantitative models to identify investment opportunities, ensuring objectivity through limited fund manager intervention.

BT: Given the evolving global and domestic economic landscape, what is your outlook for Indian equities in the coming years?

Shah: The Indian equity market stands at a pivotal juncture. While global uncertainties persist, India's structural growth story remains intact, driven by factors such as robust domestic consumption, infrastructure development, and technological advancements. However, valuations in certain segments, have stretched beyond historical averages. Therefore, a disciplined, bottom-up approach focusing on companies with strong fundamentals, competent management, and reasonable valuations becomes imperative.

Investors should consider a diversified portfolio, balancing exposure across market capitalisations and sectors, and remain patient to navigate short-term volatilities for long-term wealth creation.

BT: Achieving the kind of returns seen in the past five years may be challenging going forward. So, how can HNIs or ultra rich investors build robust wealth in the current market environment?

Shah: Post pandemic we have seen the market rally consistently without any major correction of 10% or more, at least not until the past six month. We often mentioned that the market correction we were seeing was long overdue. Given how earnings are shaping up, we believe one needs to keep a moderate return expectation.

HNIs should focus on asset allocation, diversification, and disciplined investing. Volatility is inherent part of equity markets, and one should stay invested through market cycles, and avoiding herd mentality is crucial. Engaging with professional investment advisors who have a proven track record can also aid in navigating complexities and building sustainable wealth.

BT: What is your view on large caps, mid caps, and small caps?

Shah: Currently, large-cap stocks offer better valuation comfort, making them attractive for investors seeking stability. Mid and small caps, while offering higher growth potential, come with increased volatility and are trading at a premium to historical valuations. Nevertheless, on bottom-up basis certain pockets of mid and small cap offer both growth and valuation comfort. For an investor, a balanced approach, with selective exposure based on individual risk appetite and investment horizon, is advisable.

BT: How do you see the defence sector amid the ongoing tensions between India and Pakistan? Do you hold defence-related stocks in your portfolio?

Shah: Geopolitical tensions as seen recently can lead to increased defence spending, benefitting companies in the sector. In past we had exposure to defence sector, but those investment decisions were made on fundamental basis. While we continue to monitor the sector, any inclusion in our portfolio would be driven by long-term growth prospects and valuation metrics.

BT: Which sectors do you think may deliver solid returns to investors going ahead? Why?

Shah: We expect earnings to be led by capex-oriented sectors as revival in capital expenditure—both on the government and private fronts supported by healthy balance sheets and improved operational efficiencies. We are optimistic about sectors like financials, consumer services, and infrastructure. In Financials, especially banks to benefit from economic growth and increased credit demand. Consumer services are poised for expansion due to rising incomes and changing consumption patterns. Infrastructure-linked sectors, backed by government initiatives, and rising capex offer long-term growth opportunities.