Pension fund managers (PFMs) will soon be allowed to invest in initial public offerings, and also in a broader list of stocks, a top official from sector regulator PFRDA said on Tuesday.

The Pension Regulatory and Development Authority (PFRDA) is aiming to increase the number of subscribers looking to build a retirement corpus by 1 crore in 2021-22, its chairman Supratim Bandyopadhyay told reporters.

At present, there are restrictions under which PFMs can invest the equity component of a corpus only in scrips traded on the options and futures segment with a market cap of over Rs 5,000 crore.

Officials said this restricts the opportunities for fund managers, who have been able to deliver a compounded annual growth rate of 11.31 per cent on equity investments since the beginning of the new pension scheme. They pointed out Avenue Supermarkets as a case in point, where PFMs were not able to enter because of the restrictions.

“In two or three days, we will be notifying new rules which take a more liberal view on categories where equity investments can be made,” Bandyopadhyay said.

There will be some specifications which will be brought in to reduce the risk associated with equity investments, he added.