PRIM mutual fund route explained: How the new PMS option works, ₹25 lakh minimum investment and contract renewal rules

If you invest in mutual funds and ETFs, there is a new route to access portfolio management services similar to those offered by Portfolio Management Services ( PMS ), but with a lower entry threshold. It is called the Portfolio Managers Route for Investing in Mutual Fund Units (PRIM).

Announced at SEBI ’s board meeting on 24 September 2026, PRIM will allow investors to access portfolio management services with a minimum investment of ₹ 25 lakh, compared with the ₹ 50 lakh minimum for conventional PMS.

Under PRIM, portfolio managers can invest your money only in direct plans of mutual funds, including ETFs, index funds and Specialised Investment Funds (SIFs) offered by Indian asset management companies (AMCs). Direct equity investments in individual stocks are not included under this route.

At its board meeting, SEBI approved the introduction of the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replacing the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020.

After this, SEBI notified the new Portfolio Managers Regulations on 12 October 2026, through a Gazette notification dated 7 October 2026. One provision that PRIM investors should pay attention to is the treatment of renewals.

The regulations mention, “Any renewal of portfolio on maturity of the initial period of agreement shall be deemed as a fresh investment.”

Does this mean investors need to invest another ₹ 25 lakh to continue? Here’s what the rule means for investors.

Niharika Tripathi, Head of Products & Research, Wealthy.in said, “In simple terms, renewing a PRIM agreement is treated as starting a new one, so the ₹ 25 lakh minimum applies again at that point. The portfolio has to meet the entry rules afresh, just as it did on day one.”

That does not mean investors have to bring in a fresh ₹ 25 lakh on top of what they already hold. An investor whose PRIM portfolio is worth, say, ₹ 28 lakh when the agreement matures should be able to renew without adding money. This isn't a new idea. The earlier PMS rules carried the same provision for the ₹ 50 lakh PMS minimum, she added.

If an investor initially invests ₹ 25 lakh under a PRIM-PMS agreement that expires in April 2028, the investment at renewal must meet the ₹ 25 lakh minimum requirement. This does not necessarily mean that the investor must bring in an additional ₹ 25 lakh. Rather, the capital contribution at the time of renewal must satisfy the prescribed minimum investment threshold, Sandeep Jethwani, Co-founder, Dezerv, added.

Jethwani said that if an investor’s portfolio value falls below ₹ 25 lakh due to market losses or a partial withdrawal, the renewal provision could create a challenge. Since renewal is treated as a fresh investment, the investor would need to meet the prescribed minimum investment requirement of ₹ 25 lakh at that time.

“We also expect that SEBI would issue further operational details on PRIM ahead of the 1 April 2027 implementation date,” he added.

Tripathi said the regulations don't spell out exactly how the portfolio is to be valued at renewal. That was also left open under the earlier PMS rules.