Introduction

In the dynamic landscape of India’s financial services industry, few organizations have maintained a steadfast commitment to their founding principles while adapting to changing market conditions as successfully as Parag Parikh Financial Advisory Services (PPFAS). From its humble beginnings as a stock broking firm to its current status as a respected asset management company, PPFAS has carved a distinctive niche in the investment community through its value-oriented approach, transparent practices, and unwavering focus on investor education.

This comprehensive article explores the rich history, evolution, and unique investment philosophy of PPFAS, examining its transition from an advisory service to a full-fledged asset management company. We delve into the visionary leadership of its founder, the late Parag Parikh, whose principles continue to guide the organization, and analyze the distinctive features of its mutual fund offerings that have garnered attention from investors seeking a different approach to wealth creation.

By examining PPFAS’s journey through the lens of its corporate structure, investment strategies, fund performance, and future outlook, we aim to provide a holistic understanding of an organization that has consistently challenged conventional wisdom in the Indian mutual fund industry. Whether you are a seasoned investor familiar with PPFAS’s approach or someone new to the world of value investing, this exploration offers valuable insights into a company that has stayed true to its core beliefs while navigating the complexities of modern financial markets.

The Visionary Founder: Parag Parikh

The story of PPFAS is inextricably linked to the life and philosophy of its founder, Parag Parikh, whose vision and principles continue to influence the organization long after his untimely passing in 2015. Born into a family with business interests, Parag Parikh developed an early fascination with the stock market, leading him to establish his own stock broking firm in 1983 after completing his education.

Parag Parikh was not merely a successful businessman but also a thought leader who challenged the prevailing investment paradigms in India. His intellectual curiosity led him to explore behavioral finance long before it became a mainstream concept in Indian investment circles. Understanding the psychological biases that affect investment decisions became a cornerstone of his investment philosophy and later shaped the distinctive approach of PPFAS.

What set Parag Parikh apart from many of his contemporaries was his emphasis on ethical practices and transparent dealings in an industry often criticized for its opacity. He was a vocal advocate for investor education, believing that informed investors make better decisions. This commitment to education manifested in various forms throughout his career, from authoring books like “Stocks to Riches” and “Value Investing and Behavioral Finance” to conducting numerous workshops and seminars.

Parag Parikh’s investment philosophy was deeply influenced by value investing legends like Benjamin Graham and Warren Buffett, but he adapted these principles to the Indian context. He emphasized fundamental analysis, focusing on businesses with strong moats, capable management, and reasonable valuations. This approach often led him to take contrarian positions, avoiding market favorites and seeking undervalued opportunities that others overlooked.

Perhaps most notably, Parag Parikh practiced what he preached. When PPFAS launched its flagship mutual fund in 2013, he invested a significant portion of his personal wealth in it, aligning his interests with those of other investors. This “skin in the game” approach became a defining characteristic of PPFAS’s corporate culture and helped build trust with clients who appreciated that the company’s leadership shared both the risks and rewards of their investment decisions.

Tragically, Parag Parikh passed away in a car accident in Omaha, Nebraska, in May 2015, where he had gone to attend Berkshire Hathaway’s annual shareholder meeting—a pilgrimage he made regularly to learn from his investment idol, Warren Buffett. His death left a void in India’s investment community, but the principles he established continue to guide PPFAS, ensuring his legacy lives on through the organization he founded.

Origins and Foundation

PPFAS traces its origins to 1983 when Parag Parikh established Parag Parikh Financial Advisory Services Limited as a stock broking firm in Mumbai. The early 1980s marked a transformative period for Indian capital markets, with the gradual liberalization of the economy creating new opportunities for financial services companies. However, the industry was still largely unregulated, with practices that often favored intermediaries over investors.

Against this backdrop, Parag Parikh chose to differentiate his firm by emphasizing ethical business practices and transparent client relationships. From the outset, PPFAS positioned itself not merely as a transaction facilitator but as a trusted advisor committed to helping clients make informed investment decisions. This approach was revolutionary in an era when most broking firms focused primarily on generating commissions through frequent trading rather than guiding clients toward long-term wealth creation.

The foundation of PPFAS was built on several key principles that continue to define the organization today:

1. Value-oriented investing: Emphasizing fundamental analysis and seeking companies trading below their intrinsic value.
2. Long-term perspective: Focusing on sustainable wealth creation over extended periods rather than short-term market timing.
3. Rational decision-making: Recognizing and mitigating behavioral biases that lead to poor investment outcomes.
4. Ethical business practices: Maintaining transparency in all dealings and avoiding conflicts of interest.
5. Client education: Empowering investors with knowledge to make informed decisions independently.

During its formative years, PPFAS operated primarily as a stock broking firm while gradually expanding its service offerings to include portfolio management and financial planning. The firm quickly gained recognition for its principled approach and began attracting clients who appreciated its emphasis on fundamental research and value investing principles.

A significant milestone in the early history of PPFAS was the establishment of its Portfolio Management Service (PMS) in 1996, following SEBI’s introduction of formal regulations for this business. The PMS allowed PPFAS to manage discretionary portfolios for high-net-worth individuals, implementing the value investing philosophy that Parag Parikh had been advocating. This service became a testing ground for the investment strategies that would later form the basis of the company’s mutual fund offerings.

Throughout the 1990s and early 2000s, as India’s capital markets evolved rapidly following economic liberalization, PPFAS maintained its distinctive approach, often taking contrarian positions during periods of market euphoria. The firm’s resilience was particularly evident during the dot-com bubble of the late 1990s, when it avoided speculative technology investments despite criticism from clients seeking higher returns. This discipline protected clients from the subsequent market crash and reinforced the firm’s reputation for prudent risk management.

By the early 2000s, PPFAS had established itself as a respected name in India’s financial services landscape, known for its research-driven approach and commitment to client interests. The company’s evolution from a small broking firm to a comprehensive financial services provider set the stage for its eventual entry into the mutual fund industry, marking the beginning of a new chapter in its history.

Evolution from Advisory to Asset Management

The transformation of PPFAS from a financial advisory and portfolio management service to a full-fledged asset management company represents a pivotal phase in the organization’s evolution. This transition was not merely a business diversification but a strategic move to democratize access to the company’s investment philosophy, making it available to a broader spectrum of investors beyond the high-net-worth individuals who primarily utilized its portfolio management services.

The decision to enter the mutual fund industry came after careful deliberation and was influenced by several factors:

1. Regulatory changes: SEBI’s regulations were evolving to create a more level playing field for smaller, independent asset managers to compete with established players backed by financial conglomerates.
2. Market maturity: The Indian mutual fund industry had grown significantly, with increasing investor awareness about the benefits of professional money management.
3. Distribution reach: The mutual fund structure offered potential for wider distribution compared to the more restrictive portfolio management services.
4. Aligned interests: The mutual fund format allowed for greater transparency and alignment of interests between the fund house and investors.

In 2011, PPFAS began the rigorous process of obtaining necessary approvals from SEBI to establish an asset management company. This process involved meeting stringent capital adequacy requirements, establishing robust risk management systems, and demonstrating capacity for fund management operations. After receiving regulatory approval, PPFAS Asset Management Private Limited was incorporated in 2012 as a wholly-owned subsidiary of PPFAS Limited (the erstwhile Parag Parikh Financial Advisory Services Limited).

In May 2013, PPFAS launched its flagship scheme, initially called PPFAS Long Term Value Fund (later renamed Parag Parikh Flexi Cap Fund), marking its official entry into the mutual fund industry. The launch was notable for its departure from industry norms in several ways:

1. Single scheme approach: Unlike most new entrants who launch multiple funds across categories, PPFAS chose to focus on a single equity scheme, reflecting its belief in simplicity and specialization.
2. Flexible mandate: The fund adopted a go-anywhere approach, with the flexibility to invest across market capitalizations and geographies, including international equities—a relatively uncommon feature for Indian mutual funds at that time.
3. Skin in the game: The company announced that its directors and employees would invest their personal money in the fund, aligning their interests with those of external investors.
4. Low-key marketing: Instead of a high-decibel launch with aggressive marketing campaigns, PPFAS relied primarily on word-of-mouth and targeted communications with existing clients and like-minded investors.

The evolution to asset management necessitated significant organizational changes. PPFAS expanded its team, bringing in professionals with expertise in fund operations, compliance, and distribution while preserving its research-driven investment culture. The company also invested in technology infrastructure to support mutual fund operations, including systems for NAV calculation, investor servicing, and regulatory reporting.

Throughout this transition, PPFAS maintained its commitment to transparency and investor education. The company continued its tradition of regular investor meets where fund managers explained their investment decisions and answered questions directly from investors—a practice that was uncommon in the industry but consistent with PPFAS’s belief in open communication.

By 2015, the mutual fund had established a track record and begun attracting attention from investors and industry observers who appreciated its distinctive approach. The asset management transition was further solidified when PPFAS decided to focus exclusively on mutual funds, voluntarily surrendering its portfolio management services license to eliminate potential conflicts of interest—another move that underscored the company’s commitment to aligning with investor interests.

The evolution from advisory to asset management represented not just a business transformation but a fulfillment of Parag Parikh’s vision to democratize value investing in India and create an organization that would outlast its founder by adhering to enduring investment principles.

PPFAS as a Sponsor Company

As a sponsor company in the mutual fund industry, PPFAS Limited (formerly Parag Parikh Financial Advisory Services Limited) plays a crucial role in establishing and maintaining the asset management company that operates the actual mutual fund schemes. Understanding the sponsor structure provides important insights into the governance, commitment, and stability of PPFAS Mutual Fund.

In the Indian mutual fund regulatory framework, a sponsor is the entity that establishes the mutual fund and holds a minimum 40% stake in the asset management company. The sponsor must meet SEBI’s fit and proper criteria and demonstrate financial soundness, business reputation, and capacity to support the AMC operations. PPFAS Limited serves as the sponsor for PPFAS Mutual Fund, having established PPFAS Asset Management Private Limited as its wholly-owned subsidiary.

Several distinctive aspects characterize PPFAS’s role as a sponsor:

1. Ownership structure: Unlike many mutual fund sponsors in India that are part of larger financial conglomerates or have diverse shareholders including foreign entities, PPFAS Limited has maintained a concentrated ownership structure primarily held by the Parikh family and close associates. This stability in ownership has enabled consistent adherence to the founding principles and investment philosophy.
2. Financial commitment: As a sponsor, PPFAS Limited has consistently demonstrated its financial commitment to the asset management business, infusing capital as needed for growth and maintaining capital adequacy well above regulatory requirements. This financial backing has allowed the AMC to focus on long-term business building rather than short-term profitability.
3. Strategic direction: The sponsor has provided clear strategic direction to the asset management company, emphasizing sustainable growth through investment performance and client satisfaction rather than aggressive asset gathering. This approach is reflected in the measured pace of new fund launches and the focus on building a distinctive identity in the crowded mutual fund marketplace.
4. Governance oversight: Through its representation on the board of directors of the asset management company, the sponsor exercises governance oversight that ensures adherence to the founding principles. The sponsor has established robust governance mechanisms, including independent directors with strong credentials who provide objective perspectives on key decisions.
5. Brand stewardship: As the custodian of the Parag Parikh legacy, the sponsor company has carefully managed the brand to ensure it consistently represents the values of integrity, transparency, and rational investing that were championed by the founder.

Following the passing of Parag Parikh in 2015, the sponsor company faced the challenge of leadership transition. Neil Parikh, son of Parag Parikh, assumed leadership roles both at the sponsor level and within the asset management company, ensuring continuity in vision and values. The transition was managed smoothly, with key team members remaining in place and the investment philosophy continuing unchanged.

In 2018, as part of a corporate restructuring to streamline operations and enhance focus, the sponsor company changed its name from Parag Parikh Financial Advisory Services Limited to PPFAS Limited. This change reflected the evolution of the group’s business focus toward asset management while preserving the PPFAS identity that had built recognition in the investment community.

The sponsor’s commitment to the mutual fund business is also demonstrated through the significant personal investments that its directors and their families maintain in the mutual fund schemes. Regular disclosures of these investments provide transparency and reinforce the “skin in the game” philosophy that distinguishes PPFAS from many competitors.

As a sponsor, PPFAS Limited has demonstrated patience in building the asset management business, allowing it to develop organically rather than pushing for rapid expansion. This approach has enabled the AMC to establish a clear identity in the market and build a loyal investor base that appreciates its distinctive investment approach and client-centric orientation.

Through prudent capital allocation, governance oversight, and strategic guidance, PPFAS Limited has fulfilled its responsibilities as a sponsor while allowing the asset management company operational autonomy to implement its investment strategies and business plans. This balanced approach has contributed significantly to the credibility and success of PPFAS Mutual Fund in an industry dominated by much larger players.

PPFAS Mutual Fund: The AMC Structure

PPFAS Asset Management Private Limited, the asset management company (AMC) of PPFAS Mutual Fund, operates with a structure designed to support its distinctive investment philosophy while meeting regulatory requirements and operational needs. The AMC structure reflects the organization’s commitment to independence, alignment of interests, and focus on investment excellence.

Corporate Structure and Governance

The AMC is incorporated as a private limited company and is a wholly-owned subsidiary of PPFAS Limited, the sponsor. This ownership arrangement ensures stability and consistent adherence to the founding principles. The corporate governance structure includes:

1. Board of Directors: The board comprises a balanced mix of executive directors, non-executive directors, and independent directors. The independent directors, who include respected professionals with diverse expertise in finance, law, and business management, provide objective oversight and protect investor interests.
2. Key Management Personnel: The senior management team includes experienced professionals leading various functions such as investments, operations, compliance, sales, and investor relations. Many senior team members have been with the organization for extended periods, ensuring continuity in approach and institutional memory.
3. Compliance and Risk Management: A robust compliance department works independently to ensure adherence to all regulatory requirements and internal policies. The risk management function operates with clear separation from the investment team to provide objective assessment of portfolio risks.

Organizational Structure

The AMC is organized into several key functional areas:

1. Investment Team: The heart of the organization, comprising fund managers, research analysts, and investment strategists who implement the value-oriented investment approach. The team structure is relatively flat, encouraging open discussion and collaborative decision-making while still maintaining clear accountability.
2. Operations: Handles fund accounting, NAV calculation, reconciliations, and other operational aspects of running mutual fund schemes. This team ensures accurate processing of transactions and maintains data integrity.
3. Investor Services: Manages relationships with existing investors, handles queries and service requests, and provides support through various channels including phone, email, and in-person interactions.
4. Sales and Distribution: Responsible for building relationships with distribution partners, conducting investor awareness programs, and facilitating access to the funds through various channels.
5. Compliance and Legal: Ensures adherence to regulatory requirements, monitors changing regulations, and implements appropriate policies and procedures to maintain compliance.
6. Technology: Supports all business functions through appropriate systems and IT infrastructure, with increasing focus on digital capabilities to enhance investor experience.

Distinctive Features of the AMC Structure

Several aspects of PPFAS’s AMC structure distinguish it from many competitors:

1. Investment-Centric Culture: The organization is structured to prioritize investment research and portfolio management, with other functions designed to support the investment process rather than drive asset gathering.
2. Transparency: The AMC maintains unusual transparency about its operations, regularly disclosing not just statutory information but also insights into investment decisions, leadership perspectives, and organizational developments.
3. Aligned Compensation: The compensation structure for employees, particularly the investment team, includes significant weight to long-term performance and alignment with investor outcomes, rather than focusing primarily on asset growth or short-term results.
4. Skin in the Game: The AMC requires its directors and employees to invest in the mutual fund schemes, with regular disclosures of these investments. This practice ensures that decision-makers experience the same outcomes as external investors.
5. Focus and Simplicity: Unlike many AMCs that operate dozens of schemes across multiple categories, PPFAS has maintained a focused approach with a limited number of schemes, each with a clear mandate and purpose.
6. Cost Consciousness: The AMC operates with a lean structure, focusing resources on core functions that add value to investors rather than expansive facilities or large marketing budgets. This cost consciousness is reflected in the competitive expense ratios of its schemes.
7. Direct Investor Communication: The organizational structure facilitates direct communication between fund managers and investors through regular meetings, webinars, and interactive sessions – breaking down the typical barriers between investment professionals and end investors.

The AMC has evolved over time, gradually expanding its team and capabilities while maintaining its core principles. From its initial team of around 15 people in 2013, the organization has grown to accommodate increasing assets under management and operational requirements, but has done so thoughtfully to preserve its distinctive culture and approach.

The structure of PPFAS Asset Management reflects a deliberate choice to prioritize investment quality and investor interests over rapid business expansion. This approach has enabled the AMC to build a reputation for integrity and performance that has attracted a loyal investor base seeking an alternative to more commercially oriented fund houses.

Investment Philosophy

The investment philosophy of PPFAS Mutual Fund represents the core of its identity and distinguishes it from most other asset managers in the Indian mutual fund landscape. Deeply rooted in the principles of value investing but adapted to contemporary markets and the Indian context, this philosophy guides all investment decisions across the fund house’s offerings.

Foundations of the Philosophy

PPFAS’s investment philosophy rests on several foundational principles:

1. Value-oriented approach: At its core, PPFAS adopts a value investing mindset, focusing on the intrinsic worth of businesses rather than short-term market movements. This approach involves detailed fundamental analysis to identify companies trading below their intrinsic value, providing a margin of safety and potential for long-term appreciation.
2. Business-first thinking: The fund managers view themselves as part-owners of businesses rather than traders of stocks. This perspective leads to deep analysis of business models, competitive advantages, management quality, and long-term prospects rather than focusing merely on price movements or technical factors.
3. Patience and long-term orientation: PPFAS embraces a multi-year investment horizon, willing to wait for value recognition while businesses compound their intrinsic worth. This patience extends to holding cash when suitable opportunities are scarce and deploying it decisively when market dislocations create attractive entry points.
4. Contrarian mindset: The firm is willing to take positions that differ from consensus views and avoid popular investments when their valuations appear excessive. This contrarian approach has often led to underweighting overheated sectors and finding value in overlooked areas of the market.
5. Risk-conscious approach: Rather than defining risk through statistical measures like volatility, PPFAS views risk primarily as the permanent loss of capital. This perspective leads to a focus on business quality, balance sheet strength, and valuation discipline as the primary risk mitigation tools.

Key Elements of Implementation

The implementation of this philosophy involves several distinctive elements:

1. Bottom-up stock selection: Investment decisions are driven primarily by company-specific analysis rather than top-down sector allocations or macroeconomic forecasts. Each potential investment is evaluated on its individual merits, leading to portfolios that often look markedly different from benchmark indices.
2. Concentrated portfolios: Rather than excessive diversification, PPFAS maintains relatively concentrated portfolios of businesses it understands well and has high conviction in. This approach reflects the belief that a focused portfolio of well-researched investments offers better long-term results than broad market exposure.
3. Global opportunity set: Unlike most Indian mutual funds that invest exclusively or predominantly in domestic equities, PPFAS includes international equities as a core component of its strategy. This global approach expands the opportunity set and allows access to business models or sectors not well represented in the Indian markets.
4. Behavioral awareness: Recognizing that investor psychology often leads to suboptimal decisions, PPFAS incorporates behavioral finance insights into its investment process. This awareness helps the team identify market inefficiencies created by behavioral biases and avoid common psychological traps in their own decision-making.
5. Independent research: The investment team conducts original research rather than relying primarily on broker reports or consensus views. This independent approach includes company meetings, industry analysis, channel checks, and detailed financial modeling to form proprietary insights.
6. Valuation discipline: While emphasizing business quality, PPFAS maintains strict valuation discipline, recognizing that even excellent businesses can make poor investments if acquired at excessive prices. The valuation framework incorporates multiple methodologies appropriate to different business types rather than applying a one-size-fits-all approach.
7. Pragmatic flexibility: Despite its value orientation, PPFAS avoids dogmatic adherence to any single investment style. The approach has evolved to recognize various forms of value, including companies with intangible assets, network effects, or other characteristics that might not be immediately apparent in traditional financial metrics.

Communication and Education

A distinctive aspect of PPFAS’s investment philosophy is the emphasis on transparently communicating it to investors:

1. The fund house regularly explains its investment decisions, including both successes and mistakes, through investor communications, annual meetings, and fund manager interactions.
2. Rather than simply marketing products, PPFAS focuses on educating investors about its approach, helping them understand why patience and a long-term perspective are essential for successful investing.
3. By setting appropriate expectations about both the benefits and limitations of its investment philosophy, PPFAS aims to attract investors whose temperament and time horizon align with its approach.

The investment philosophy of PPFAS has remained remarkably consistent since its inception, even as the organization has grown and market conditions have evolved. This consistency reflects the deeply held convictions of its leadership and investment team about the enduring principles of successful investing.

While the philosophy has roots in classical value investing as articulated by Benjamin Graham and practiced by Warren Buffett, it has been thoughtfully adapted to contemporary markets and the Indian context. This adaptation recognizes the increasing importance of intangible assets, the global nature of business competition, and the unique characteristics of emerging markets like India.

The steadfast adherence to this philosophy, even during periods when it has been out of market favor, has defined PPFAS’s identity in the investment community and attracted a base of like-minded investors who appreciate its distinctive approach to wealth creation.

PPFAS Fund Management Team

Rajeev Thakkar

Chief Investment Officer and Equity Fund Manager

Having commenced his career in 1994, he possesses wide-ranging experience in the field of financial services. These include – Investment banking, managing fixed income portfolios, broking operations and Portfolio Management Services (PMS) operations.

He joined PPFAS Limited in 2001 and besides serving as a Fund Manager for its PMS, also earned the post of Chief Executive Officer, which he held until 2012. He currently serves as Chief Investment Officer of PPFAS Mutual Fund.

Educational Qualifications:

• B. Com (Bombay University)
• Chartered Accountant
• CFA Charter Holder
• Grad ICWA

Raunak Onkar

Dedicated Fund Manager for Overseas Investments and Co-Fund Manager

Raunak Onkar is a Fund Manager & Research Head at PPFAS Mutual Fund. He started his career with PPFAS in 2008 as an intern in the Research Team.

Educational Qualifications:

• B.SC (IT) Mumbai University
• MMS (Masters in Management Studies) in Finance (Mumbai University)

Raj Mehta

Debt Fund Manager

Beginning his career as an intern with PPFAS Mutual Fund in 2012, Raj swiftly moved up the ranks, and is currently part of the Fund Management team.

He is a Fellow Member of Institute of Chartered Accountants of India (ICAI) and a CFA Charter Holder. He is also featured as a regular participant on various TV channels and a columnist in select financial publications.

Educational Qualifications:

• B.Com, M.Com (Mumbai University)
• Chartered Accountant
• CFA Charter Holder

Rukun Tarachandani

Domestic Equity Fund Manager

Rukun is a Fund Manager at PPFAS Mutual Fund. He has more than a decade of experience in Equity Markets. He started his career in 2013 as an Equity Research analyst with Goldman Sachs Global Investment Research.

Prior to joining PPFAS, he worked with Kotak Mahindra Asset Management as an Equity Research analyst focusing on small and midcap stocks and special situations. He is an avid reader of books on Behavioral Finance, Value Investing and Quantitative Investing.

Educational Qualifications:

• MBA (Finance) from MDI Gurgaon
• M.S. in Data Science from Northwestern University
• B.Tech (Information Technology) from Nirma University
• CFA Charterholder
• CQF (Certificate in Quantitative Finance) certificate holder

Mansi Kariya

Co-Fund Manager Debt and Credit Research Analyst

Mansi Kariya joined PPFAS Mutual Fund in 2018 as a Debt Dealer. Gradually, she assumed the role of Credit Research Analyst within the Fixed Income Team and then eventually became a Co-Fund Manager Debt. In her previous roles, Mansi has worked as a research associate and senior executive – debt products for 3.5 years.

Educational Qualifications:

• B.Com Hons (Calcutta University)
• MS-Finance (ICFAI University)
• CFA Charter Holder

The fund management team is supported by a research team comprising analysts with specialized sector knowledge and a shared commitment to fundamental research. The team structure is relatively flat, encouraging open debate and collaborative decision-making while maintaining clear accountability.

Key aspects of the fund management approach include:

1. Collaborative Process: While individual fund managers have primary responsibility for specific schemes, investment decisions involve team discussion and debate to incorporate diverse perspectives.
2. Continuity and Stability: The core investment team has maintained remarkable stability, providing continuity in approach and institutional memory that benefits long-term investors.
3. Skin in the Game: All fund managers invest their personal funds in the schemes they manage, aligning their interests with those of external investors.
4. Research Integration: Fund managers are actively involved in research, maintaining direct contact with portfolio companies rather than relying solely on analyst recommendations.
5. Continuous Learning: The team maintains a culture of intellectual curiosity and continuous improvement, regularly reviewing both successful and unsuccessful investment decisions to refine their approach.

This combination of experienced fund managers, a stable team structure, and aligned interests has been instrumental in maintaining consistency in PPFAS’s investment approach as the organization has grown.

PPFAS Mutual Funds (Present List)

PPFAS Mutual Fund has maintained a focused product strategy, launching new schemes selectively rather than creating a proliferation of funds across categories. This approach reflects the organization’s philosophy of simplicity and specialization, focusing on areas where it believes it can add value through its distinctive investment approach. Each fund in the lineup has a clear mandate and purpose, addressing specific investor needs while maintaining consistency with the overall investment philosophy.

Parag Parikh Flexi Cap Fund

Fund Overview

• Type of Scheme: An open-ended dynamic equity scheme investing across large cap, mid cap, small cap stocks
• Date of Allotment: May 24, 2013
• NAV (Direct Plan): ₹85.8001 (as on 2025-03-31)
• Assets Under Management (AUM): ₹88,004.52 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹1,000
  • Additional Purchase: ₹1,000
  • Monthly SIP: ₹1,000
  • Quarterly SIP: ₹3,000

Fund Managers

• Rajeev Thakkar
• Raunak Onkar
• Raj Mehta
• Rukun Tarachandani
• Mansi Kariya

Additional Information

• Insider Holdings: ₹450.51 crores (as of Feb. 28, 2025)

Parag Parikh ELSS Tax Saver Fund

Fund Overview

• Type of Scheme: An open-ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit
• Date of Allotment: July 24, 2019
• NAV (Direct Plan): ₹32.2007 (as on 2025-03-31)
• Assets Under Management (AUM): ₹4,477.32 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹500
  • Additional Purchase: ₹500
  • Monthly SIP: ₹1,000

Fund Managers

• Rajeev Thakkar
• Raunak Onkar
• Raj Mehta
• Rukun Tarachandani
• Mansi Kariya

Additional Information

• Insider Holdings: ₹60.64 crores (as of Feb. 28, 2025)

Parag Parikh Conservative Hybrid Fund

Fund Overview

• Type of Scheme: An open-ended hybrid scheme investing predominantly in debt instruments
• Date of Allotment: May 28, 2021
• NAV (Direct Plan): ₹14.7605 (as on 2025-03-31)
• Assets Under Management (AUM): ₹2,409.19 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹5,000
  • Additional Purchase: ₹1,000
  • Monthly SIP: ₹1,000

Fund Managers

• Rajeev Thakkar
• Raunak Onkar
• Raj Mehta
• Rukun Tarachandani
• Mansi Kariya

Additional Information

• Insider Holdings: ₹9.53 crores (as of Feb. 28, 2025)

Parag Parikh Dynamic Asset Allocation Fund

Fund Overview

• Type of Scheme: An open-ended dynamic asset allocation fund
• Date of Allotment: February 27, 2024
• NAV (Direct Plan): ₹11.0560 (as on 2025-03-31)
• Assets Under Management (AUM): ₹1,647.82 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹5,000
  • Additional Purchase: ₹500
  • Monthly SIP: ₹1,000

Fund Managers

• Rajeev Thakkar
• Raunak Onkar
• Raj Mehta
• Rukun Tarachandani
• Mansi Kariya

Additional Information

• Insider Holdings: ₹9.89 crores (as of Feb. 28, 2025)

Parag Parikh Arbitrage Fund

Fund Overview

• Type of Scheme: An open-ended scheme investing in arbitrage opportunities
• Date of Allotment: November 03, 2023
• NAV (Direct Plan): ₹11.0951 (as on 2025-03-31)
• Assets Under Management (AUM): ₹1,285.51 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹1,000
  • Additional Purchase: ₹1,000
  • Monthly SIP: ₹1,000

Fund Managers

• Rajeev Thakkar
• Raunak Onkar
• Raj Mehta
• Rukun Tarachandani
• Mansi Kariya

Additional Information

• Insider Holdings: ₹52.82 crores (as of Feb. 28, 2025)

Parag Parikh Liquid Fund

Fund Overview

• Type of Scheme: An open-ended liquid scheme with relatively low interest rate risk and relatively low credit risk
• Date of Allotment: May 11, 2018
• NAV (Direct Plan): ₹1,435.9800 (as on 2025-03-31)
• Assets Under Management (AUM): ₹2,425.86 crores (as of Feb. 28, 2025)

Investment Details

• Minimum Application Amount:
  • New Purchase: ₹5,000
  • Additional Purchase: ₹1,000
  • Monthly SIP: ₹1,000

Fund Managers

• Raj Mehta
• Mansi Kariya

Additional Information

• Insider Holdings: ₹63.14 crores (as of Feb. 28, 2025)

Each addition to PPFAS’s fund lineup has been deliberate, addressing specific investor needs or portfolio construction requirements rather than following industry trends or filling product matrix gaps for completeness. This measured approach to product proliferation reflects PPFAS’s commitment to launching only funds where it believes it can add distinctive value through its investment approach.

Across all its offerings, PPFAS maintains several common elements:

• Emphasis on risk management and capital preservation
• Application of its value-oriented research process
• Transparent communication about strategy and positioning
• Alignment of interests through “skin in the game” investments by the fund house personnel
• Reasonable expense ratios compared to industry averages

This focused product strategy has enabled PPFAS to maintain consistency in its investment approach while gradually addressing a wider range of investor needs and asset allocation requirements.

Investment Approach and Strategy

The investment approach and strategy employed by PPFAS Mutual Fund across its equity offerings represent a practical implementation of its value-oriented philosophy, adapted to specific market conditions and opportunities. This approach combines quantitative analysis with qualitative assessments to identify businesses that offer attractive long-term value propositions.

Core Investment Process

PPFAS follows a structured yet flexible investment process that encompasses several key stages:

1. Idea Generation: Investment ideas come from various sources, including:
   • Systematic screening of financial databases using value parameters
   • Industry mapping to identify leaders in evolving sectors
   • Analysis of supply chains to find overlooked companies
   • Tracking of significant ownership changes or management actions
   • Study of successful business models in international markets that may have parallels in India
2. Preliminary Assessment: Ideas that emerge from the screening process undergo initial assessment focused on:
   • Business model sustainability and comprehensibility
   • Market opportunity size and growth potential
   • Competitive landscape and entry barriers
   • Preliminary valuation metrics to gauge attractiveness
3. Detailed Analysis: Promising candidates proceed to comprehensive analysis involving:
   • Detailed financial statement analysis covering at least 5-10 years of history
   • Assessment of capital allocation decisions and returns on capital
   • Evaluation of management quality through track record and governance practices
   • Competitive positioning analysis using frameworks like Porter’s Five Forces
   • Channel checks with suppliers, customers, and industry experts
   • Scenario analysis considering various growth and profitability outcomes
4. Valuation: Multiple valuation methodologies are applied depending on business characteristics:
   • Discounted Cash Flow (DCF) for businesses with predictable cash flows
   • Earnings multiple approaches calibrated to historical averages and peer comparisons
   • Sum-of-parts valuation for conglomerates or companies with distinct business segments
   • Asset-based valuation for companies with significant tangible assets
   • Replacement cost analysis where applicable
5. Portfolio Construction: Investment decisions consider portfolio fit and risk management:
   • Position sizing based on conviction level and risk assessment
   • Sector and thematic exposure monitoring to avoid excessive concentration
   • Liquidity considerations, particularly for smaller companies
   • Cash allocation decisions based on overall market valuation and opportunity set
6. Monitoring and Review: Continuous evaluation of existing holdings:
   • Regular reassessment of investment thesis validity
   • Tracking of key performance indicators specific to each business
   • Evaluation of capital allocation decisions by management
   • Reassessment of valuation in light of business performance and market conditions

Key Strategic Elements

Several strategic elements distinguish PPFAS’s investment approach:

1. Global Perspective: The willingness to invest internationally provides several advantages:
   • Access to world-class businesses in sectors underrepresented in India
   • Exposure to companies with global competitive advantages
   • Portfolio diversification benefits through different economic cycles
   • Opportunity to benefit from global trends that may eventually impact Indian markets
2. Cash as a Strategic Asset: Unlike many equity funds that remain fully invested regardless of market conditions, PPFAS views cash as a strategic asset:
   • Willing to hold significant cash positions when attractive investments are scarce
   • Using cash reserves opportunistically during market corrections
   • Approaching cash allocation as an active decision rather than a default position
3. Sector-Agnostic, Business-Focused: Rather than making top-down sector allocations, PPFAS focuses on business quality:
   • Willingness to have zero exposure to entire sectors if they don’t meet quality or valuation criteria
   • Potential for significant overweight in sectors with multiple attractive opportunities
   • Focus on business characteristics rather than sector classifications
4. Ownership Mentality: The investment team approaches analysis with an ownership perspective:
   • Evaluation of businesses as if purchasing the entire company
   • Focus on cash generation ability rather than accounting profits
   • Emphasis on long-term value creation rather than short-term catalysts
5. Contrarian Positioning: PPFAS is willing to take positions contrary to market consensus:
   • Avoiding “hot” sectors trading at premium valuations
   • Investigating sectors or companies facing temporary challenges
   • Maintaining independence from benchmark weightings
6. Risk Management Integration: Risk management is embedded throughout the investment process rather than treated as a separate function:
   • Business quality as the primary risk mitigator
   • Valuation discipline providing margin of safety
   • Position sizing reflecting conviction and risk assessment
   • Willingness to hold cash when appropriate opportunities are lacking

Strategy Adaptation Across Market Cycles

PPFAS’s investment strategy has shown adaptability across different market environments while maintaining its core principles:

1. Bull Market Approach: During periods of broad market optimism and elevated valuations:
   • Increased emphasis on quality and competitive moats
   • Greater selectivity in new purchases
   • Potentially higher cash allocations
   • Gradual trimming of positions approaching full valuation
2. Bear Market Approach: During market corrections or downturns:
   • Deployment of cash reserves into high-quality businesses at attractive valuations
   • Potential increase in position sizes of existing holdings trading at deeper discounts
   • Exploration of formerly expensive quality businesses that become reasonably valued
   • Focus on financial strength to endure challenging conditions
3. Sector Rotation Response: While not engaging in tactical sector rotation strategies, PPFAS responds to evolving sector dynamics:
   • Gradual repositioning as structural changes in industries become apparent
   • Avoidance of sectors facing fundamental disruption regardless of apparent valuation
   • Willingness to build positions in emerging sectors as business models mature and demonstrate sustainable economics

Summary

In summary, the investment approach and strategy of PPFAS reflect a disciplined implementation of its value philosophy while incorporating pragmatic adaptations to market realities. By maintaining flexibility within a consistent framework, the fund house seeks to deliver long-term returns while managing downside risks through changing market environments.