Mumbai, Nov 11
The fund famous for holding cash is now famous for spending it.
Parag Parikh Flexi Cap factsheet Oct 31, 2026 shows cash + debt + money-market + arbitrage at 8.78% vs 9.77% in Sept, 11.58% in Aug, 18.94% in March, 21.34% in Jan and 25.31% in Oct 2025. That is 16.53 ppt down, a 65% relative fall. In rupee terms, the reserve fell from Rs 24,426 cr in March to Rs 14,173 cr in Sept — Rs 10,253 cr deployed in just 6 months.
Where did the money go? The shift is clear in the buckets. Indian core equities rose from 66.75% in March 2026 to 75.25% in Oct 2026, up 8.5 ppt, which translates to about Rs 18,453 cr added to take Indian equities to Rs 1.05 lakh cr. REITs and InvITs increased from 3.72% to 5.90%, after peaking at 6.27% in Sept, adding 2.18 ppt. Overseas equities slipped slightly from 10.59% to 10.07%, down 0.52 ppt, while cash, debt and arbitrage fell from 18.94% to 8.78%, down 10.16 ppt.
Stock specifics tell the same story. DLF was the biggest add at 1.81% of AUM, or Rs 3,554 cr in Sept, with further addition in Oct. In autos, Mahindra & Mahindra and Maruti Suzuki were added. In telecom infra, Indus Towers and Bharti Airtel were added. In gas, Petronet LNG was up 0.14%, along with Indraprastha Gas, Mahanagar Gas and Coal India. REIT exposure now stands at Embassy REIT 2.49%, Knowledge Realty Trust 2.18% and Brookfield India REIT 1.60%. Overseas portfolio was reshuffled in Oct — the fund exited Meta Platforms which was 2.30% in Sept, added Netflix at 3.06% as the largest new holding, trimmed Microsoft from 2.48% to 1.42%, Alphabet from 4.29% to 3.42% and Amazon from 2.30% to 2.17%, citing AI capex bubble fears after the Oct tech rout.
Performance context: Regular plan delivered -6.06% over 1 year, Direct -3.54% vs Nifty 500 TRI -2.03%, while 3-year stands at 12.21% vs 9.50% benchmark, so short-term underperformance persists.
Fund manager Raj Mehta reiterated that cash is a function of opportunities, not market levels. Rajeev Thakkar in his Aug letter had promised single-digit cash and has now delivered.
Analytical View:
Why did PPFAS deploy now? Its value philosophy is to hold cash when no bargains exist, not as a market top call. Since Nifty 500 fell 15% from its Sept 2024 peak, a two-year time correction plus price correction in realty and gas utilities offered margin of safety. Second, inflow slowdown forced action — monthly inflows fell 77% from Rs 3,950 cr in March to Rs 900 cr in Sept after underperformance. With less fresh cash coming in, holding 25% cash increased cash drag. Deployment reduces that drag.
For retail, PPFAS moving from 25% to 8% acts as a contrarian indicator — when the best value managers find bargains, a market bottom is often near. But note, they did not chase mid and small-cap frenzy — the portfolio remains 64.85% large cap — buying HDFC Bank at 7.49% as top holding plus DLF, ITC, TCS, Infosys, all businesses with visible cash flows.
Cash is no longer king — patience is.
*Tags:* #ParagParikhFlexiCap #PPFAS #CashHoldings #MutualFunds #DLF #REIT #RajeevThakkar #AUM