Investing

Understanding a company’s financial health is essential before making any investment. Whether you are a beginner or rely on share market advisory services, reading financial reports helps you assess performance, risk, and growth potential. 

Two types of financial reports, standalone vs consolidated financial statements, often confuse investors. 

This guide will simplify the concepts and help you learn how to read balance sheets and decipher income statements with confidence.  

What Are Financial Statements?

Financial statements are formal records of a company’s financial activities and performance over a period. These include:

• Balance Sheet – shows assets, liabilities, and equity
  
• Income Statement (Profit and Loss) – reveals revenues and expenses.
  
• Cash Flow Statement – tracks inflow and outflow of cash.
  
• Statement of Changes in Equity – reflects changes in ownership value.
  

What Are Standalone Financial Statements?

Standalone financial statements represent the financial performance and position of a single entity, the parent company, without including the results of its subsidiaries or associated companies.

Key Features:

• Reflect only the operations of the parent company.
  
• Do not include the financials of subsidiaries, joint ventures, or associate companies.
  
• Help understand the core business strength of the parent entity.
  

For example, if Tata Motors reports standalone results, it shows how Tata Motors performed in isolation, without including companies like Jaguar Land Rover or Tata Technologies.

These statements are useful when an investor wants to evaluate how profitable or efficient the parent company is by itself.

What Are Consolidated Financial Statements?

Consolidated financial statements are financial reports that combine the financials of the parent company and all its subsidiaries, associate companies, and joint ventures.

Key Features:

• Present a comprehensive financial picture of the entire business group.
  
• Include revenues, expenses, assets, and liabilities of all entities under the group.
  
• Eliminate intra-group transactions to avoid double-counting.
  

For example, consolidated financial statements of Tata Motors will include figures from Jaguar Land Rover, Tata Technologies, and any other company it controls or significantly influences.

As per Indian Accounting Standards (Ind AS) and international accounting norms, publicly listed companies are required to publish consolidated statements for transparent reporting.

Standalone vs Consolidated Financial Statements: Key Differences

Understanding the contrast between standalone vs consolidated financial statements helps in interpreting financial data correctly. Here’s a side-by-side comparison:

Feature	Standalone Financial Statements	Consolidated Financial Statements
Scope	Only parent company	Parent + subsidiaries and associates
Purpose	Shows core entity’s performance	Shows group-wide financial performance
Complexity	Simpler to prepare and read	More detailed and complex
Investor Clarity	Good for evaluating individual company	Better for overall financial health
Internal Transactions	Not adjusted	Eliminated for accuracy
Usage	Legal compliance, segment evaluation	Transparency, group-level decision making
Regulation	Required by Companies Act	Mandated by SEBI and Ind AS for listed firms

By understanding both, investors can assess where a company is earning money and how much influence subsidiaries have on its profitability.

Why Are Both Financial Statements Important for Investors?

Both standalone financial statements and consolidated financial statements serve different purposes. Here’s why both matter to investors:

1. Clarity on Core Operations

Standalone financials help investors understand the profitability of the primary company without the noise of subsidiary data. For example, if a parent company is profitable while its subsidiaries are not, standalone data shows the true core strength.

2. Group-Level Performance

Consolidated statements show the overall performance of the business group. This is critical when evaluating diversified companies like Reliance Industries, which have businesses in oil, retail, telecom, etc.

3. Risk Analysis

An investor relying on only one set of financials may misjudge the risk. For instance, a profitable standalone result may mask losses in subsidiaries unless one looks at consolidated numbers.

4. Informed Decisions

Share market advisory services often recommend reviewing both statements to make better long-term investment decisions.

Examples: Reading Standalone and Consolidated Financials

Let’s look at an example to understand the difference better:

Example 1: Hypothetical Company – ABC Ltd.

ABC Ltd. owns 100% of a subsidiary XYZ Ltd.

Particulars	ABC Ltd. (Standalone)	ABC Ltd. + XYZ Ltd. (Consolidated)
Revenue	₹500 crore	₹750 crore
Net Profit	₹100 crore	₹80 crore
Debt	₹200 crore	₹400 crore

Here, the standalone statements show a net profit of ₹100 crore, but the consolidated version reveals a lower group-level profit of ₹80 crore. This indicates that the subsidiary XYZ Ltd. is making losses or has high costs.

Example 2: Real Example – Tata Steel (as per public filings)

Tata Steel’s standalone PAT (Profit After Tax) may be ₹2,000 crore, but its consolidated PAT (including operations from Europe and Southeast Asia) might show a different picture — often significantly lower or higher.

This is why understanding how to read balance sheets and deciphering income statements in both contexts is crucial.

Which Financial Statement Should You Rely On as an Investor?

Both statements have value, but which one to prioritize depends on your investment objective:

Choose Standalone When:

• You want to assess the core business performance of the parent.
  
• You are evaluating operational efficiency at the parent level.
  
• You want to understand segment-wise profit or loss.
  

Choose Consolidated When:

• You want a holistic view of the company’s total performance.
  
• You are investing in companies with multiple subsidiaries.
  
• You need to assess group-level risks and liabilities.
  

Large investors and share market advisory services usually prefer consolidated financial statements for long-term evaluation, while retail investors may refer to standalone statements for quarterly trends or specific segment performance.

How Are These Statements Regulated in India?

India has well-defined regulatory frameworks ensuring companies report both sets of financials accurately:

1. Companies Act, 2013

• Mandates the preparation of both standalone and consolidated financial statements for companies with subsidiaries.
  
• Ensures that shareholders get a complete financial overview.
  

2. SEBI (Listing Obligations and Disclosure Requirements)

• Requires listed companies to disclose both standalone and consolidated results quarterly and annually.
  
• Promotes transparency and comparability across companies.
  

3. Indian Accounting Standards (Ind AS)

• Align with International Financial Reporting Standards (IFRS).
  
• Provide specific guidelines on consolidation, elimination of intra-group transactions, treatment of joint ventures, etc.
  

By adhering to these regulations, Indian firms provide a reliable and consistent framework for investors to analyze financial performance.

Conclusion

Understanding the distinction between standalone vs consolidated financial statements is key to making smart investment choices. While standalone statements tell you how the parent company is performing, consolidated statements give a complete view of the entire business group.

Whether you are using share market advisory services or conducting your own research, it’s essential to compare both standalone and consolidated data. Start by understanding basic financial terms and learning how to read balance sheets. Don’t focus solely on profits, also, evaluate debts, expenses, and cash flows. Mastering these concepts and basic financial terms will empower you to assess companies more accurately and make informed investment decisions.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs 

What is the major difference between standalone and consolidated financial statements?

The main difference is scope. Standalone financial statements present the financials of the parent company alone, while consolidated financial statements include the combined financials of the parent and its subsidiaries.

Why do companies publish both standalone and consolidated results?

Companies publish both to offer transparency. Standalone reports help assess the main company’s health, while consolidated statements reveal how the entire group is performing — crucial for diversified companies.

Are consolidated financial statements more reliable?

Yes, for most investors. Consolidated financial statements provide a complete picture of a company’s operations and finances across its group. They are more useful for evaluating overall performance and risk exposure.

Do retail investors need to read both statements?

Yes. Retail investors benefit from comparing both to understand where profits or losses are coming from. Relying solely on one can give a distorted view of a company’s health, especially in large conglomerates.

Where can I find these financial statements?

Both standalone and consolidated financial statements are usually available through multiple sources such as company annual reports, stock exchange filings on platforms like NSE and BSE, the SEBI website, and the investor relations sections of company websites. These platforms provide access to reliable financial data, helping investors understand a company’s financial performance using accurate and updated information.

Samvardhana Motherson International Ltd. (SMIL), one of the world’s largest automotive component manufacturers, has announced a major acquisition that further cements its global presence. The company will acquire 81% stake in Japan’s Yutaka Giken Co., Ltd. (YGCL), a long-term supplier to Honda Motor Company, along with 100% stake in Yutaka Autoparts India. This acquisition is a strategic leap for SMIL, strengthening its product portfolio, global reach, and partnership with Honda, one of the world’s most respected automotive brands.

Why This Deal Matters

Yutaka Giken is a trusted supplier of crucial metal components and assemblies for Honda, including rotors, stator assemblies, drive systems, and brake systems. With 13 manufacturing plants and 1 R&D center across 9 countries (Japan, China, USA, Thailand, Brazil, India, Indonesia, Mexico, and the Philippines), YGCL brings both scale and technical expertise. Importantly, the company is debt-free, making it a clean and financially sound acquisition target.

For SMIL, this acquisition enhances its ability to serve Honda more effectively while opening the door to cross-selling opportunities with other global automakers, especially in emerging markets where demand for high-quality components is rising rapidly.

Market Reaction and Strategic Importance

The announcement was welcomed by investors, with SMIL’s stock moving higher on the news. The market clearly views this acquisition as a strong strategic fit, reinforcing SMIL’s position in the automotive value chain. By integrating Yutaka Giken’s capabilities, SMIL is not only expanding its metal component portfolio but also strengthening its long-term “content per car” strategy—the idea of increasing the value of Motherson’s components in every vehicle manufactured worldwide.

A Diversified Global Giant

SMIL is not new to transformative acquisitions. As a diversified global manufacturing specialist, the company operates across 44 countries with more than 400 facilities on five continents. It serves nearly every major automotive OEM while also supplying to industries such as aerospace, logistics, health & medical, and IT.

Its operations are structured across five core business segments:

1. Wiring Harness – End-to-end design, development, and manufacturing of complete wiring systems.
   
2. Vision Systems – Supply of interior and exterior mirrors, along with advanced camera-based detection systems.
   
3. Modules & Polymer Products – The largest revenue contributor, supplying everything from plastic components to fully integrated modules.
   
4. Integrated Assemblies – Premium module assembly and delivery solutions for automakers.
   
5. Emerging Businesses – Expanding into non-automotive areas like aerospace and healthcare.
   

Among these, the Modules & Polymer Products division contributes the biggest share of SMIL’s revenues, making the Yutaka Giken acquisition particularly significant as it diversifies and strengthens the metal components vertical.

Aligning with Industry Shifts

The automotive industry is undergoing rapid transformation, with the rise of electric vehicles (EVs), hybrid technologies, and advanced mobility solutions. Acquiring a metal components specialist like YGCL helps SMIL position itself strongly in these future-ready areas. Components such as stators and drive systems are essential not only for internal combustion engines but also for the evolving EV and hybrid architectures.

This acquisition therefore allows SMIL to fortify its core business while securing a foothold in next-generation vehicle technologies.

Financial Strength and Execution Capability

Despite facing some profitability pressures due to industry-wide headwinds, SMIL continues to show resilience. Revenue has grown steadily, largely driven by acquisitions and solid performance across businesses. Importantly, the company maintains a comfortable leverage ratio of 1.1x, giving it the flexibility to fund acquisitions and expansion without straining its balance sheet.

Management has emphasized that the challenges in Europe are being addressed and cost optimization measures are underway. With its track record of successfully integrating global businesses, SMIL is well-positioned to extract long-term value from the Yutaka Giken acquisition.

Looking Ahead

The acquisition is expected to be completed by Q1 FY27, and once finalized, it will give SMIL a stronger relationship with Honda while expanding its customer base and product offerings. By combining its global footprint with Yutaka Giken’s specialized expertise, SMIL is set to become an even more strategic partner for global automakers.

The deal reflects SMIL’s broader vision of evolving from just a component supplier to a value-adding partner in the global automotive ecosystem. It also highlights the company’s ability to align with industry megatrends like electrification, safety, and smart mobility.

Conclusion

The Yutaka Giken acquisition is more than just another addition to SMIL’s portfolio—it is a strategic move that enhances its capabilities, strengthens relationships with global OEMs, and prepares it for the future of mobility. With its scale, execution strength, and diversified presence, SMIL continues to demonstrate why it remains one of the most trusted names in the automotive supply chain.

For investors and industry watchers alike, this acquisition is a clear sign that Samvardhana Motherson is not just keeping pace with global industry shifts—it’s driving them.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Waaree Energies, one of India’s leading renewable energy companies, has made headlines after its US subsidiary secured a 452 MW solar module supply order for large-scale projects in America. This milestone order reflects Waaree’s growing global presence and gave investors reason to cheer, sending the company’s stock to an eight-month high.

The achievement underlines Waaree’s strong execution capabilities, international ambitions, and its alignment with the accelerating global transition to clean energy.

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Waaree Energies: A Leading Name in Renewable Energy

Waaree Energies has established itself as a major force in the renewable energy space, with a strong focus on solar photovoltaic (PV) modules and cells manufacturing.

• Module capacity: ~15 GW
  
• Cell capacity: ~5.4 GW
  

This significant manufacturing base gives Waaree a competitive edge both in India and globally. Beyond the domestic market, Waaree has expanded its footprint to 25+ countries, consistently winning international orders.

The company is working toward becoming an end-to-end green energy solutions provider, supporting the entire solar value chain and catering to the rising demand for clean energy worldwide.

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The 452 MW US Order: A Strategic Breakthrough

The latest order involves supplying 452 MW of solar modules to a major utility-scale solar project developer in the United States. This contract is part of Waaree’s FY26–27 supply schedule and underscores the company’s increasing relevance in the American renewable energy market.

Notably, this deal follows other significant wins:

• 540 MW order in June 2025
  
• 586 MW and 599 MW orders earlier this year
  

Together, these international orders demonstrate Waaree’s ability to consistently attract large contracts from overseas developers.

The US has emerged as a key growth market for Waaree, aided by its 1.6 GW module manufacturing facility in Texas, which positions the company strategically to meet local demand while complying with domestic sourcing preferences and clean energy policies.

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Robust Order Book and Project Pipeline

Waaree’s strong execution and global expansion are reflected in its impressive order book and pipeline:

• Order book: ~₹49,000 crore (equivalent to ~25 GW of projects)
  
• Project pipeline: Over 100 GW
  

This healthy backlog gives Waaree significant revenue visibility and a clear path for sustained growth in the coming years.

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Strong Financial Performance Backing Expansion

In addition to its operational milestones, Waaree Energies has delivered solid financial results.

For Q1 FY26, the company reported:

• Healthy revenue growth supported by domestic and international orders.
  
• Significant jump in profitability, showcasing improved margins and efficient operations.
  

Looking ahead, Waaree has set an ambitious guidance for FY26, targeting an EBITDA of ₹5,500–6,000 crore. Such confident projections highlight the company’s optimism and ability to translate its strong pipeline into tangible financial performance.

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Strategic Importance of the US Market

The United States is currently one of the largest and fastest-growing solar markets globally. With supportive government policies, such as clean energy tax credits under the Inflation Reduction Act (IRA), demand for renewable energy infrastructure is expected to surge in the coming decade.

Waaree’s growing foothold in the US, marked by this 452 MW order and its Texas facility, perfectly aligns with these tailwinds. By establishing a credible presence in North America, Waaree is positioning itself as a long-term strategic supplier in one of the world’s most lucrative renewable markets.

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Why This Matters for Investors

For investors, the recent developments around Waaree Energies carry several important takeaways:

1. Global Expansion in Motion – With multiple wins across international markets, Waaree is successfully executing its overseas growth strategy.
   
2. Robust Order Book – A ₹49,000 crore backlog provides strong revenue visibility, reducing earnings volatility.
   
3. Financial Strength – The Q1 FY26 performance and strong guidance point to sustained profitability.
   
4. Sector Tailwinds – Supportive policies in both India and the US, along with global decarbonisation efforts, create a favourable long-term environment.
   
5. Stock Market Confidence – The latest contract win lifted Waaree’s stock to an eight-month high, signalling investor optimism.
   

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The Road Ahead

Waaree Energies’ expansion strategy blends scale, execution, and market diversification. Key priorities moving forward include:

• Scaling global operations with a sharper focus on the US and Europe.
  
• Expanding domestic capacity to cater to India’s growing renewable demand.
  
• Investing in technology and R&D to enhance efficiency and competitiveness.
  
• Capturing value across the clean energy chain, from module manufacturing to end-to-end green energy solutions.
  

As renewable energy transitions from being a niche sector to a mainstream global priority, Waaree is well-positioned to ride this structural growth wave.

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Conclusion

The 452 MW solar module order in the US marks another major milestone in Waaree Energies’ global journey. Backed by a strong order book, expanding international presence, and consistent financial performance, the company is carving out a leadership position in the renewable energy space.

While short-term market movements may come and go, Waaree’s strategic expansion, operational excellence, and alignment with global clean energy trends suggest that its long-term growth story remains firmly intact.

For investors and industry watchers alike, Waaree Energies is emerging as a key player not just in India, but in the global renewable energy landscape.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Shares of InterGlobe Aviation, the parent company of India’s largest airline IndiGo, witnessed pressure in intraday trade after news surfaced that the Gangwal family had offloaded a part of their stake. The family of co-founder Rakesh Gangwal sold 2.2% equity through a block deal, amounting to approximately ₹5,136 crore, as part of their ongoing phased exit strategy.

This development has naturally sparked investor curiosity, given IndiGo’s dominance in the Indian aviation sector. However, while the stock faced short-term pressure, the company’s long-term fundamentals and growth trajectory remain robust.

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Background: The Gangwal Family’s Stake Sale

The Gangwal family’s exit strategy has been underway for more than three years. In February 2022, Rakesh Gangwal resigned from IndiGo’s board following differences with co-founder Rahul Bhatia. Since then, the family has been gradually reducing its shareholding through block deals.

• In 2023 and 2024, the family trimmed its holdings.
  
• In May 2025, they sold 3.4% stake.
  
• The latest move involved selling 2.2% stake, bringing down their total holding to ~5%.
  

Interestingly, earlier reports suggested a possible 3.1% sale, but the family ultimately opted for a smaller tranche this time. As of June 2025, the promoter group’s collective stake stood at around 44%, with Rakesh Gangwal personally holding 4.73% and the Chinkerpoo Family Trust owning 3.08%.

With the recent sale, the Gangwal family’s role as significant shareholders has further diminished, reaffirming their intent to eventually exit completely from the company.

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IndiGo’s Business Model and Market Leadership

Despite stake sale headlines, IndiGo continues to shine operationally. Known for its low-cost carrier (LCC) model, the airline has built its reputation on:

• Affordable fares
  
• On-time performance
  
• Hassle-free travel experience
  

This clear and consistent strategy has enabled IndiGo to cement a dominant leadership position in India’s aviation market.

As of Q1 FY26, the airline operates a fleet of 400+ aircraft, covering 91 domestic and 41 international destinations. This makes IndiGo not only India’s largest passenger airline but also one of the most strategically positioned carriers to benefit from rising travel demand in the long run.

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Q1 FY26 Performance: Strong Growth Despite Cost Pressures

IndiGo’s Q1 FY26 earnings highlight the company’s ability to deliver growth even in a challenging environment.

• Revenue Growth: Healthy year-on-year growth, supported by higher passenger traffic.
  
• Profitability: Margins were under some pressure due to elevated fuel costs—a common challenge across the aviation sector.
  
• Operational Strength: Passenger metrics remained strong, underscoring IndiGo’s brand loyalty.
  

What stands out is IndiGo’s ability to gain market share even when the overall industry faced a slowdown.

In July 2025, India’s domestic air traffic declined by 2.9%, but IndiGo’s market share rose to an impressive 65.2%. This reflects the airline’s operational resilience and competitive edge.

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Why Investors Should View the Stake Sale in Context

While the Gangwal family’s stake reduction has created short-term volatility in IndiGo’s stock, it is important to understand the broader context:

1. Planned Exit Strategy – This is not a sudden or unexpected move. It is part of a multi-year phased exit that began in 2022.
   
2. No Impact on Operations – IndiGo’s management and day-to-day operations remain unaffected. The airline continues to execute its growth strategy.
   
3. Sectoral Tailwinds – India’s aviation market remains structurally attractive, with long-term demand expected to grow due to rising disposable incomes, increasing urbanisation, and improving airport infrastructure.
   
4. Market Leadership – IndiGo’s ability to capture market share in a shrinking industry environment reinforces its dominance.
   

In essence, the stake sale reflects a personal financial decision by the Gangwal family rather than a reflection of IndiGo’s business fundamentals.

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The Road Ahead

Looking ahead, IndiGo is well-positioned to capitalise on the next phase of India’s aviation growth story. Key growth drivers include:

• Fleet Expansion: Continuous additions to its aircraft fleet.
  
• International Growth: Expanding network in high-demand overseas routes.
  
• Cost Discipline: Leveraging its low-cost model to withstand industry headwinds.
  
• Brand Loyalty: Strong customer trust that allows it to outperform peers consistently.
  

As the aviation sector navigates cyclical challenges like fuel price volatility and seasonal demand swings, IndiGo’s scale, efficiency, and execution give it a distinct advantage.

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Conclusion

The Gangwal family’s latest stake sale might have triggered short-term stock pressure for IndiGo, but it is simply another step in their multi-year exit plan. Importantly, it does not alter IndiGo’s long-term growth story.

With its dominant 65.2% market share, extensive route network, and a business model tailored to cost efficiency and customer convenience, IndiGo remains a standout performer in India’s aviation sector.

For investors, the message is clear: while ownership patterns may shift, IndiGo’s operational strength, market leadership, and growth prospects remain firmly intact.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

When you’re trying to grow your money or plan for your retirement, how you manage the investments is just as important as where you invest. That’s where Portfolio Management Services (PMS) come in. They help create personalized strategies based on your goals and the level of risk you are comfortable taking. 

But not all Portfolio management types are the same. It’s important to know the difference between Discretionary, Non-Discretionary, and Advisory PMS, as each gives you a different level of control and involvement.

From complete delegation to personalized guidance, each type of PMS investment offers you a different level of decision-making freedom and customization.

As part of this beginner’s guide to PMS, let’s explore the different types of portfolio management services to help you choose the right one for your investment journey.

What Are Portfolio Management Services?

In simple terms, Portfolio Management Services (PMS) are professional investment services offered by qualified portfolio managers who build and manage a customized portfolio on behalf of clients.

Classification of Portfolio Management Services in India

In India, portfolio management services are typically classified into three broad categories, based on how investment decisions are taken and who controls the final execution.

Here’s a quick look:

Portfolio Management Type	Decision Control	Execution	Investor Involvement
Discretionary PMS	Fund Manager	By Fund Manager	Minimal
Non-Discretionary PMS	Investor	By Investor	Moderate
Advisory PMS	Investor	By Investor	High

These classifications help investors select services based on their comfort with risk, investment knowledge, and time availability.

Discretionary Portfolio Management Services

Under Discretionary PMS, the portfolio manager takes complete control of all investment decisions. From choosing the right stocks to deciding when to buy or sell, everything is handled professionally without the investor’s involvement.

Key Features

1. The manager has full discretion over the investment strategy:
The portfolio manager independently selects assets, allocates funds, and manages investments without needing approval from the investor for each move.

2. Ideal for investors who prefer a hands-off approach:
Perfect for those who want professional management without being involved in daily decisions or constantly monitoring the market themselves.

3. The portfolio is personalized based on the investor’s risk profile, but the manager drives daily decisions:
While tailored to your goals and risk level, the manager takes complete charge of buying, selling, and strategy implementation.

4. Generally suited for High Net-Worth Individuals (HNIs):
Best for busy or less-experienced investors who trust professionals to manage large investments efficiently and strategically.

Discretionary PMS is among the most popular portfolio management types in India, especially for those looking for long-term wealth creation without daily market monitoring.

Non-Discretionary Portfolio Management Services

In Non-Discretionary PMS, the portfolio manager only provides recommendations. The final decision to buy or sell securities lies with the investor. Execution also happens only after the investor’s approval.

Key Features

1. Investor retains control over final transactions:
In Non-Discretionary PMS, the investor makes the final call, giving full control over buying and selling decisions.

2. Portfolio managers give advice, but no action is taken without approval:
Managers suggest investment moves, but nothing happens unless the investor agrees, ensuring complete involvement in every portfolio decision.

3. Suitable for investors who are knowledgeable and want better transparency and control:
Best for experienced investors who prefer to stay involved and value having a clear view of all portfolio actions.

4. Helps build confidence and allows for real-time involvement in the investment process:
Since investors stay actively engaged, it boosts their confidence and understanding, making the investment journey more hands-on and transparent.

If you are someone who enjoys reviewing suggestions and wants custom advice with control, this type of PMS investment may be for you.

Advisory Portfolio Management Services

The Advisory PMS model is the most flexible and cost-efficient among all portfolio management types. Here, the manager provides advice, but the investor takes full responsibility for executing trades and managing funds.

Key Features

1. No direct execution by the portfolio manager:
In this model, the advisor only gives recommendations—all buy/sell decisions and trade execution are done by the investor.

2. Offers suggestions for portfolio allocation, diversification, and asset strategy:
The manager provides expert advice on where to invest, how to spread risk, and align strategy with financial goals.

3. Great for investors who prefer DIY investing with expert guidance:
Ideal for investors who like managing their own money but still want support from professionals for smarter decision-making.

4. Often comes at a lower fee structure, making it an attractive option for cost-conscious investors:
Since the advisor doesn’t handle transactions, fees are usually lower, making it a more affordable choice for budget-aware investors.

Advisory PMS works best for financially savvy individuals who want expert inputs while maintaining full autonomy.

Which Type of PMS is Best for You?

Selecting the right types of portfolio management services depends on your investment goals, time availability, market knowledge, and risk appetite.

Here’s a simple comparison to help you decide:

Factor	Discretionary PMS	Non-Discretionary PMS	Advisory PMS
Control	Low	Moderate	High
Cost	Higher	Moderate	Lower
Flexibility	Medium	High	Very High
Ideal For	Busy Professionals	Informed Investors	DIY Investors

SEBI Guidelines for Different PMS Types

The Securities and Exchange Board of India (SEBI) regulates all types of portfolio management services to ensure transparency, fairness, and investor protection.

Key Guidelines Include:

• Minimum Investment: SEBI mandates a minimum investment of ₹50 lakhs for PMS accounts.
  
• Registration: All PMS providers must be registered with the SEBI.
  
• Disclosure Norms: Clear performance reporting, risk metrics, and fee structures must be disclosed.
  
• Audit & Compliance: Regular audits and compliance checks ensure the safety of investor funds.
  

These regulations build trust and promote compliance in the financial ecosystem. Whether it’s discretionary or advisory, every portfolio management type is subject to strict governance.

How Do Portfolio Managers Customize These Services?

Each type of PMS investment allows for customization based on client profiles, investment goals, and market outlook.

Common Customization Strategies:

• Large-cap focused portfolios: Stable returns with lower risk.
  
• Mid & small-cap portfolios: High-growth potential with higher volatility.
  
• Thematic investing: Based on emerging trends like ESG, digital India, or green energy.
  
• Sectoral Strategies: Focused exposure to sectors like banking, IT, pharma, etc.
  

Whether you choose discretionary or non-discretionary PMS, your portfolio can be customized with different strategies to match your goals, highlighting key PMS benefits like flexibility and personalisation.

Common Myths About PMS Types

Many investors hesitate to use PMS due to confusion or myths around various portfolio management types. Let’s bust a few of them:

Myth 1: Non-discretionary PMS means no advice

Fact: Non-discretionary PMS provides regular expert recommendations, but the investor takes final action.

Myth 2: Advisory PMS is the same as mutual funds

Fact: Mutual funds pool money from multiple investors, while advisory PMS offers personalized recommendations based on your profile.

Myth 3: Discretionary PMS locks you out of your portfolio

Fact: While the manager takes decisions, you can monitor performance and receive detailed reports regularly.

Myth 4: All PMS types are risky

Fact: Risk varies by strategy, not by portfolio management type. A conservative discretionary PMS can be less risky than an aggressive advisory plan.

Understanding the types of portfolio management services and debunking these myths can help you make smarter financial decisions.

Conclusion

Choosing the right type of portfolio management is like picking the perfect travel guide – you need someone who understands your journey and moves at your pace. Whether you are a busy professional seeking a fully managed solution or a hands-on investor who enjoys being involved, there’s a PMS model that fits. 

With guidance from a trusted share market advisor, you can assess your risk appetite, time commitment, and financial goals to choose between discretionary, non-discretionary, or advisory PMS services.

FAQs 

What is the difference between discretionary and non-discretionary PMS?

In discretionary PMS, the portfolio manager makes all buy/sell decisions independently. In non-discretionary PMS, the manager gives advice, but the investor must approve and execute each trade.

Which PMS type offers more control?

Advisory PMS offers the highest level of control, followed by non-discretionary PMS. In discretionary PMS, the control lies mostly with the fund manager.

Is advisory PMS suitable for HNIs?

Yes, especially for HNIs who are financially savvy and prefer to take decisions themselves but still value expert guidance. It also offers cost benefits.

Can I switch between PMS types later?

Switching is possible, but it depends on the terms of your agreement and the PMS provider’s offerings. Always consult your portfolio manager for a smooth transition.

Are all PMS types SEBI registered?

Yes. All providers offering any type of portfolio management service must be registered with SEBI and adhere to its regulations.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Managing money the right way is essential to achieving your financial goals faster. However, making smart investment decisions requires time, knowledge, and discipline, something not everyone may have. That’s where Discretionary Portfolio Management (DPM) comes in. 

It allows investors to delegate investment decisions to experienced professionals who manage their money with care and expertise. 

In this beginners guide to PMS, we will discuss discretionary portfolio meaning, how it works, its key benefits, fee structures, and whether it aligns with your financial needs. 

We’ll also explain how it stands apart from mutual funds and DIY (do-it-yourself) investing.

What is Discretionary Portfolio Management?

Discretionary Portfolio Management  is a type of wealth management service where a professional portfolio manager is given the authority to make investment decisions for the client. This means the manager can buy or sell stocks, bonds, or other assets without asking for the client’s approval each time, as long as it follows the agreed investment plan.

It helps save time and ensures quick action in the market. With expert handling, DPM can be a smart option for investors who prefer a hands-off approach to growing their wealth.

A stock market advisor plays a crucial role in discretionary fund management  by using their experience and market knowledge to make timely decisions that align with the client’s financial goals and risk profile.

Key Features of DPM

• Authority & Trust: The portfolio manager makes investment decisions without prior client approval, based on the client’s risk profile and financial goals.
  
• Personalisation: Portfolios are tailored to the individual client rather than pooled with others, as in mutual funds.
  
• Objective Focus: Decisions are driven by analysis, strategy, and market dynamics, not emotions.

How It Differs from Mutual Funds or Advisory Services

Aspect	Discretionary PMS	Mutual Funds	Investment Advisory
Control	Manager has full decision-making authority	Fund manager manages pooled funds	Investor decides based on advice
Personalisation	High—custom portfolio per client	Low—same portfolio for all investors	Moderate—depends on investor
Transparency	High	Moderate	High
Minimum Investment	₹50 lakhs (as per SEBI guidelines)	As low as ₹500	No fixed requirement

How Does Discretionary Portfolio Management Work?

Understanding the workflow of discretionary PMS will help you grasp why it’s often preferred by serious and seasoned investors.

1. Client Onboarding and Risk Profiling

• Every investor is different. The first step involves understanding your financial goals, risk appetite, investment horizon, and liquidity needs.
  
• The portfolio manager conducts a detailed risk profiling and financial assessment.
  

2. Creating an Investment Mandate

• Based on the profiling, a detailed investment mandate is drawn up.
  
• This includes asset allocation strategy, benchmarks, constraints (if any), and risk limits.
  

3. Portfolio Construction and Execution

• The manager constructs a customized portfolio across equity, debt, ETFs, or other instruments.
  
• The manager has full discretionary powers to make buy/sell decisions in real time.
  

4. Ongoing Monitoring and Rebalancing

• Market conditions are dynamic. The manager actively rebalances the portfolio to stay aligned with the client’s objectives.
  

5. Reporting and Compliance

• Regular performance reports, audit compliance, and SEBI regulations are adhered to, ensuring transparency.
  

Discretionary vs Non-Discretionary Portfolio Management

Here’s a comparative overview of the two styles of PMS:

Feature	Discretionary PMS	Non-Discretionary PMS
Decision Making	Portfolio manager takes all decisions	Client must approve every transaction
Execution Speed	Fast—real-time decision execution	Slower—waiting for client approval
Client Involvement	Minimal	High
Best Suited For	Busy professionals, HNIs, NRIs	DIY investors who want more control
Efficiency	High	Moderate to low
Risk of Emotional Bias	Low—decisions are professional	High—client emotions may intervene

Who Should Opt for Discretionary Portfolio Management?

Discretionary portfolio management is not a service for everyone. It is ideal for:

1. High-Net-Worth Individuals (HNIs)

• Those with investable assets above ₹50 lakh who want a more sophisticated approach to wealth creation.
  

2. Time-Constrained Professionals

• Doctors, lawyers, business owners, and executives who lack time for daily market tracking.
  

3. Investors Seeking Professional Management

• Those who prefer expert-led decisions and strategic rebalancing without micromanagement.
  

4. NRI Investors

• Especially useful for NRIs who want seamless investment management in India without geographical restrictions.
  

Key Benefits of Discretionary Portfolio Management

1. Professional Expertise

• Access to seasoned fund managers who understand markets, asset classes, and macroeconomic trends.
  

2. Customised Strategy

• Unlike mutual funds, PMS portfolios are crafted as per your specific investment objectives and constraints.
  

3. Discipline & Objectivity

• Eliminates emotional biases like fear and greed from the investing process.
  

4. Transparency

• Regular updates, audited statements, and portfolio reports ensure you stay informed.
  

5. Better Risk Management

• Active portfolio monitoring and dynamic asset reallocation reduce downside risks.
  

6. Tax Efficiency

• Transactions are made in the client’s name, enabling better tax-loss harvesting strategies.
  

What to Expect from a Discretionary Portfolio Manager?

When you sign up for DPM, your expectations should be aligned with industry best practices to fully experience the range of PMS benefits such as transparency, expertise, and personalised portfolio management.

1. SEBI-Compliant Services

• The manager and PMS firm must be registered with the Securities and Exchange Board of India (SEBI).
  

2. Style of Portfolio Construction

• Managers may follow value investing, growth strategy, sector rotation, or multi-cap allocation, based on the client mandate.
  

3. Transparency & Access

• Expect quarterly reports, email statements, and online dashboards to track performance.
  

4. Regular Interaction

• While you don’t make daily decisions, annual reviews or check-ins are often arranged to align with changing financial goals.
  

5. Third-Party Custody

• Securities are held in the investor’s demat account, offering added safety and ownership.
  

Performance Reporting & Risk Monitoring in Discretionary PMS

1. Benchmark Comparison

• Returns are compared against chosen benchmarks like NIFTY50, BSE500, etc.
  

2. Performance Metrics

• Reports include internal rate of return (IRR), time-weighted return (TWR), and risk-adjusted return ratios.
  

3. SEBI Mandated Disclosures

• All PMS firms are required to disclose performance in a standard format on their websites.
  

4. Risk Monitoring

• Regular stress testing, volatility tracking, and drawdown monitoring are conducted to manage downside risk.
  

Discretionary PMS Charges & Fee Structures

Charges vary between providers but typically include:

1. Fixed Fee Model

• A flat percentage charged on Assets Under Management (AUM), e.g., 1.5%-2.5% annually.
  

2. Performance-Based Fee

• Charges based on returns generated beyond a certain benchmark or hurdle rate (e.g., 10% returns).
  

3. Hybrid Model

• A mix of fixed and performance-based fees.

Fee Type	Details
Account Setup Fee	One-time charge (often waived)
Management Fee	1.5%–2.5% on AUM
Profit Sharing	10%–20% of returns above hurdle rate
Exit Load	May apply if exited before lock-in

Final Thoughts

Discretionary Portfolio Management is a powerful tool for managing wealth, though it may not be suitable for every type of investor. To understand its suitability, it’s important to grasp the discretionary fund management meaning, a service where investment decisions are made by professionals on your behalf. 

If you appreciate having a personalised portfolio tailored to your financial goals and want disciplined, expert-driven management, discretionary portfolio management could be the right choice. However, it may not be suitable for those who prefer low-cost mutual funds, wish to make all investment decisions themselves, or have a smaller investment amount.

FAQs

Is discretionary portfolio management suitable for beginners?

Not always. It’s better suited for experienced or high-net-worth investors. Beginners can start with mutual funds and move to DPM as their knowledge and capital grow.

What is the minimum investment required for discretionary PMS in India?

As per SEBI guidelines, you must invest a minimum of ₹50 lakh in any SEBI-registered discretionary PMS.

How is discretionary PMS different from mutual funds?

In PMS, your portfolio is separately managed and customised. In mutual funds, your money is pooled with others and managed collectively. PMS also offers more transparency and personalisation.

Can I track or intervene in my discretionary portfolio?

You can track your portfolio regularly through reports and dashboards. But you cannot intervene in daily decisions—that’s the manager’s job under a discretionary model.

What returns can I expect from discretionary portfolio management?

Returns depend on market conditions and the manager’s strategy. Some PMS products have delivered 12–20% CAGR, but returns are not guaranteed.

Is PMS regulated by SEBI?

Yes. All Portfolio Management Services (PMS), including discretionary ones, are regulated by the Securities and Exchange Board of India (SEBI). This ensures transparency and investor protection.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

When it comes to investing large sums of money, especially for high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs), traditional options like mutual funds or fixed deposits may no longer feel adequate. 

These investors often seek something more tailored, more dynamic, and with greater potential for returns. That’s where Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) come in. Offering a more customised and strategic approach to wealth creation, these options have become go-to choices for those looking to make their money work smarter and harder.

In this guide, we will explain the AIF vs PMS debate in detail. We will also explore their structures, regulations, benefits, taxation, and help you decide which one aligns with your financial goals.

What is Portfolio Management Service (PMS)?

Portfolio Management Services (PMS) is a tailored investment solution offered to investors with a significant corpus, typically ₹50 lakhs or more. It involves professional management of an individual’s portfolio of equities, fixed income, or other securities.

There are three main types of PMS:

• Discretionary PMS: The portfolio manager takes all investment decisions.
  
• Non-discretionary PMS: The manager gives advice, but the final call is yours.
  
• Advisory PMS: Here, the investor makes decisions with advisory support, and the service provider doesn’t directly manage the portfolio.
  

PMS is suitable for investors who:

• Seek customized portfolios
  
• Want direct ownership of stocks
  
• Are looking for active stock market advisory
  
• Are ready to invest large sums and can handle some level of risk
  

If you’re just starting, read this beginner’s guide to PMS to understand how PMS works and what to expect.

What is an Alternative Investment Fund (AIF)?

Alternative Investment Funds (AIFs) are privately pooled investment vehicles that collect money from sophisticated investors to invest in assets beyond traditional stocks and bonds. These include private equity, hedge funds, venture capital, real estate, etc.

SEBI has classified AIFs into three categories:

1. Category I AIF: Invests in startups, small businesses, social ventures.
   
2. Category II AIF: Includes private equity funds and debt funds with no leverage.
   
3. Category III AIF: Includes hedge funds and complex trading strategies, often using leverage.
   

SEBI regulates AIFs, ensuring transparency and governance, and they are targeted at HNIs and institutional investors with a minimum investment requirement of ₹1 crore.

The AIF vs PMS distinction lies mainly in structure, regulation, and risk-return profile. Both serve different investor needs.

Key Differences Between AIFs and PMS

Understanding AIF vs PMS becomes easier with a side-by-side comparison. Here’s a breakdown of the PMS vs AIF differences across several parameters:

Feature	PMS	AIF
Structure	Separately managed account	Pooled investment vehicle
Minimum Investment	₹50 lakhs	₹1 crore
SEBI Regulation	SEBI (PMS Regulations, 2020)	SEBI (AIF Regulations, 2012)
Ownership	Direct holding of securities	Indirect (units of the fund)
Liquidity	High (stocks can be sold anytime)	Low (locked-in for years)
Transparency	High (client sees each stock)	Moderate (pooled reporting)
Risk Level	Moderate to High	Depends on AIF category
Return Potential	Market-linked, can be volatile	Higher, but riskier (esp. Cat III)
Tax Treatment	Taxed as per investor’s slab	Pass-through in Cat I & II; Taxed at fund level in Cat III

Who Should Invest in PMS?

PMS is ideal for investors who:

• Have at least ₹50 lakhs to invest
  
• Want a customized and actively managed equity portfolio
  
• Prefer ownership of listed securities
  
• Seek stock market advisory to build long-term wealth
  
• Are comfortable with moderate market risk
  
• Need detailed performance reports and transparency
  

This solution works well for entrepreneurs, salaried HNIs, or family offices looking for tailored equity exposure. It’s also great for those who trust a professional manager but still want to see each stock in their account.

Who Should Invest in AIFs?

AIFs cater to sophisticated and niche investors who are:

• Ready to commit at least ₹1 crore
  
• Seeking non-traditional investment opportunities
  
• Open to longer lock-in periods
  
• Aiming for alpha generation over the long term
  
• Comfortable with complex or illiquid asset classes
  
• Looking to diversify beyond stocks and mutual funds
  

For instance:

• Category I AIF suits those wanting to support early-stage startups or green initiatives.
  
• Category II AIF appeals to long-term private equity seekers.
  
• Category III AIF is for aggressive investors chasing market-beating returns with hedge strategies.
  

If you’re interested in diversifying with unique instruments, AIF and PMS solutions can offer you something traditional investments can’t.

Taxation of AIFs vs PMS

Let’s explore how taxation plays out in the AIF vs PMS  context.

PMS Taxation

• Investors are taxed as if they own the securities directly.
  
• Short-Term Capital Gains (STCG) on listed shares: 15%
  
• Long-Term Capital Gains (LTCG) above ₹1 lakh: 10%
  
• Dividends: Taxed as per investor’s tax slab
  

AIF Taxation

• Category I & II AIFs: Treated as pass-through entities. Income is taxed in the hands of the investor based on type.
  
• Category III AIFs: Taxed at fund level up to 42.744% on short-term gains and 30.9% on long-term gains.
  

In terms of taxes, PMS and AIF differ significantly. PMS may allow more personalized tax planning, while AIFs offer simplicity in reporting (except for Category III).

Performance Potential: AIF vs PMS

PMS Performance Potential

• Top PMS funds have outperformed mutual funds in the long run.
  
• Being actively managed and concentrated, PMS can deliver high returns.
  
• However, volatility is a given, especially with equity-heavy portfolios.
  

AIF Performance Potential

• AIFs, especially Category III, may deliver superior risk-adjusted returns.
  
• They can use hedging, leverage, or arbitrage, something PMS cannot do.
  
• Private equity and venture capital AIFs offer potential for massive long-term gains.
  

Real-life examples:

Over the past few years, several AIFs in India have delivered strong returns. Among the top performers, Abakkus Emerging Opportunities Fund 1 has stood out with returns of 43.4% over three years. Ampersand Growth Opportunities Fund Scheme – I, launched in 2017, recorded a strong 35.3% return. Abakkus Growth Fund 1 also performed well, delivering 34% since inception. Meanwhile, Carnelian Capital Compounder Fund – I posted a solid 29.4%, and I Wealth Fund, launched in June 2018, achieved 26.7%. These funds highlight the strong performance potential of alternative investment vehicles in India’s capital markets.

AIFs &PMS Experts India

In May 2025, at least 15 PMS strategies delivered returns exceeding 13%, with Money Grow Asset’s Small Midcap strategy leading the pack. Smallcap and thematic portfolios staged a strong rebound, outperforming most other categories. In contrast, quant-based and sector-focused strategies lagged, contributing to a widening disparity in performance across portfolios.

Source: economic times

SEBI Regulations: AIFs vs PMS

PMS Regulations

• Governed by SEBI (PMS) Regulations, 2020
  
• Portfolio manager must register with SEBI
  
• Stringent norms around reporting, audits, and disclosures
  
• Periodic statements, risk profiling, and performance records shared with investors
  

AIF Regulations

• Governed by SEBI (AIF) Regulations, 2012
  
• Sponsors and fund managers must be registered
  
• SEBI has strict rules on leverage, related party transactions, and investor disclosures
  
• Regular updates to ensure investor protection and market integrity
  

In the PMS vs AIF comparison, both follow SEBI guidelines, but AIFs are slightly more flexible in strategy due to their pooled nature.

Final Words

Both PMS and AIF offer distinct advantages tailored to the needs of wealthy investors, and the choice between AIF vs PMS ultimately depends on individual preferences and investment goals. 

If you seek personalized stock ownership, high liquidity, tax flexibility, and transparent reporting, PMS may be the ideal choice, especially for those who value direct stock market advisory and want more control over their investments. 

On the other hand, if you’re comfortable with pooled structures, long-term lock-ins, and complex strategies aimed at generating alpha, then AIFs might suit you better, particularly in niche or private-market opportunities. 

Still uncertain about what fits your portfolio best? It’s wise to connect with a stock market advisory expert who can assess your financial goals, risk appetite, and available capital to help you make an informed decision.

FAQs

What is the minimum investment in PMS and AIF?
Portfolio Management Services (PMS) require a minimum investment of ₹50 lakhs, while Alternative Investment Funds (AIFs) mandate a higher minimum threshold of ₹1 crore from investors.

Which is riskier: AIF or PMS?
Risk depends on the category. Category III AIFs are usually riskier due to leverage and derivatives. PMS risk is market-driven, generally ranging from moderate to high, depending on strategy and exposure.

Can NRIs invest in AIFs and PMS?
Yes, NRIs can invest in both AIFs and PMS, provided they comply with FEMA regulations and complete the necessary KYC documentation through SEBI-registered intermediaries or custodians.

Are returns from PMS guaranteed?
No, PMS returns are entirely market-linked and can fluctuate. They depend on the portfolio manager’s decisions and market conditions—there are no fixed or guaranteed returns in PMS.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

When it comes to managing your money, two terms often come up—portfolio management and wealth management. Both are important in helping you grow your wealth, but they are not the same. If you’re someone wondering about portfolio management vs wealth management, you’re not alone.

Think of it this way—managing your stock investments is one thing, but planning your entire financial life (like retirement, tax-saving, and estate planning) is a different ball game. This is where the difference between portfolio and wealth management really comes into play.

Let’s break it down step-by-step so you can decide what suits your financial journey.

What is Portfolio Management?

Portfolio management is all about managing your investments—usually in stocks, bonds, mutual funds, and other market instruments. It’s a service where professionals handle your investment portfolio to meet specific financial goals.

There are two types:

• Discretionary Portfolio Management: Your portfolio manager takes all investment decisions on your behalf.
  
• Non-Discretionary Portfolio Management: The manager advises you, but the final decision is yours.

Whether you’re new to the market or a seasoned investor, knowing what is stock portfolio and how it’s managed is crucial. A good portfolio strategy balances risk and return based on your profile.

Example: If you’re 30 and saving for retirement, a portfolio manager may suggest higher equity exposure. 

Don’t forget the importance of portfolio reviews—markets change, and your portfolio should too.

What is Wealth Management?

Wealth management, on the other hand, is like having a full-time financial partner. It’s a more comprehensive service that includes:

• Investment planning
• Retirement planning
• Tax optimisation
• Estate planning
• Insurance and risk management

It’s not just about buying and selling stocks. A wealth manager helps you align your money with life goals.

For instance, say you’re a business owner planning to retire in 10 years. You’ll need more than just investment advice. You need a full plan: how to sell your business, minimize taxes, and pass assets to your children.

So when it comes to portfolio management vs wealth management services, think of portfolio management as one piece of the larger wealth puzzle.

Key Differences: Portfolio Management Vs Wealth Management

Here’s a quick breakdown:

Aspect	Portfolio Management	Wealth Management
Scope	Focuses on investments only	Covers all aspects of financial life
Audience	Active investors, market-savvy	HNIs, families, business owners
Services	Buy/sell decisions, asset allocation	Tax, estate, retirement + investments
Fee Structure	% of AUM or performance-based	Flat/advisory fee or combination
Regulated By	SEBI	SEBI (plus RBI, depending on services)

Understanding these key points can help you make the right call in the portfolio management vs wealth management debate.

Which One Do You Need?

It really depends on where you are in your financial journey:

• Salaried professionals in their 30s: Start with portfolio management to grow wealth.
  
• Retirees or near-retirement: Go for wealth management for tax and legacy planning.
  
• Business owners: Choose wealth management to plan for succession and estate transfers.
  
• Young investors: Learn through share market advisory and begin with a basic portfolio before scaling up.

Portfolio Management vs Wealth Management in India

In India, both services are growing fast. SEBI regulates Portfolio Management Services (PMS), which are typically offered to investors with a minimum ₹50 lakh investment. On the other hand, wealth management firms may have varied thresholds and often include customised offerings.

Compliance is tight in India now, especially with SEBI’s latest mandates. If you’re considering portfolio management vs private wealth management, always verify credentials and regulatory registration.

Portfolio Management vs Wealth Management: Cost and Fee Structure 

When comparing portfolio management vs wealth management, understanding the fee structure is essential. The way these services are priced can influence both your short-term cash outflows and long-term investment returns.

Portfolio management generally follows a fee model based on a percentage of your Assets Under Management (AUM). This means the more you invest, the more you pay. In addition:

• Some PMS providers apply a performance-linked fee, where charges are based on how well your portfolio performs beyond a pre-agreed benchmark.
• There could be entry loads at the time of investment and exit charges if you withdraw before a specified duration.
• Administrative or custodial fees may also be added separately.

Wealth management, being more holistic in nature, typically comes with a broader fee model:

• It may involve a flat advisory fee for comprehensive financial planning.
• Some firms follow a tiered pricing structure, where fees vary based on the range of services—such as tax planning, estate advice, and retirement solutions—being availed.
• High-net-worth individuals may also negotiate customised fee arrangements depending on complexity and relationship duration.

Choosing the Right Advisory Partner

Selecting the right advisory partner is one of the most important steps in your financial journey, whether you’re leaning toward PMS or a full-spectrum wealth management solution.
Here’s what you should look for:

• SEBI registration
  
• Experience in handling portfolios or complex wealth
  
• Transparent fee structure
  
• Regular reviews and reporting
  
• Compatibility with your goals
  

Choose someone who understands your short-term needs and long-term aspirations—be it wealth preservation, legacy creation, or passive income planning.

One such name in the Indian wealth advisory space is Equentis Wealth Advisory, which combines deep market insights with client-centric planning. Whether you’re exploring share market advisory or looking for guidance on long-term wealth goals, their balanced approach makes them a preferred choice for many Indian investors.

Conclusion

To sum it up, in the battle of portfolio management vs wealth management, it’s not about which one is better—it’s about which one suits you. If your main goal is to manage stocks or mutual funds, portfolio management will do. But if you want a 360-degree view of your money and life goals, wealth management is your answer.

Either way, don’t try to do it all alone. A trusted advisor makes a world of difference.

FAQs

What is the main difference between portfolio and wealth management?
Wealth management covers everything from tax to estate planning, while portfolio management only focuses on investments.

Is portfolio management part of wealth management?
Yes, portfolio management is one part of the broader wealth management service.

Which is better for long-term financial goals?
Wealth management is ideal if you’re looking for holistic financial planning beyond just investments.

Do I need both wealth and portfolio management services?
It depends on your financial complexity. High-net-worth individuals usually benefit from both.

How are the fee structures different?
Portfolio management charges are mostly performance-based, while wealth management may charge a flat advisory fee.

Who regulates these services in India?
SEBI regulates Portfolio Management Services (PMS). Wealth management may also be subject to RBI and tax regulations depending on the services offered.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.