PPFCF's 3.73 Cr shares bet very few noticed | Rachana Ranade

[00:00:00] In April 2026, one fund made a move almost nobody noticed. While the entire market was debating IT allocations and PSU exits, crores of rupees quietly flowed into a city gas distribution company. The allocation shift was of just 0.44%, but with an AUM of almost 1.4 lakh crore, even a small

[00:00:23] allocation shift means hundreds of crores rupees moving in a single month. I hope you have guessed the fund that I'm talking about. It's Parag Parekh FlexiCap Fund. So in today's video, we'll talk about seven key points. Number one, we'll talk about a sector which has seen a sharp increase in the allocation. Then we'll talk about stocks where PPFCF has increased their allocation. Then we'll talk about sector where they've cut down their allocation. Then we'll talk about a stock where they have taken

[00:00:53] a complete exit. Next, we'll talk about a sector which has the highest allocation in that fund currently. Then we'll talk about the logic behind PPFCF's high cash position right now. And ultimately, we'll talk about their core investing philosophy. There's going to be a lot that can be learnt in today's video. So keep on watching the video till the end. Doing SIPs but not getting the desired results? Let's fix that. A lot of investors pick mutual funds because a friend suggested them or an app recommended it.

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[00:01:53] and make confident investment decisions, enroll now. So let's quickly talk about a sector which has seen a pretty much big jump in the allocation and also we'll talk about a stock which has seen a fresh big addition. Now sector is nothing but the IT sector where the allocation rose from 7.99% in March to 9.25%

[00:02:22] in April. That's 126 basis points jump in a single month. Now what have they bought? TCS, their portfolio weight rose from 2.27% to 2.79%. Infosys portfolio weightage rose from 2.61% to 3.03% and for HCL Tech, it moved from 3.11% to 3.43%. Now where everyone is talking about how AI can negatively impact the IT sector,

[00:02:47] this fund is actually taking a contra bet on the IT sector. Maybe they are of the opinion that yes, AI will impact IT sector but maybe it could be short-lived. Maybe it could be for a short term or maybe a medium term and then ultimately they might believe that things may get start betting for, may start getting better for the IT space and this is where they are trying to do value buying. Okay, so this is about the sector which is IT sector. Now moving on to one of the biggest bets of April

[00:03:17] 2026 for this fund which is about a specific stock and that stock is IGL or Indraprastha Gas Limited. Now this emerged as the largest fresh addition by this fund where they bought 3.73 crore shares of this company. Now when you or me buy stocks, we will buy 10 stocks, 100 stocks but they have bought how much 3.73 crore stocks, shares. Now this drove the gas sector allocation from near negligible which was

[00:03:44] 0.01% to 0.45% in April. Now those who believe that this came out of nowhere, that's not true. They had initiated a small position in IGL as well as Mahanagar Gas back in the month of February. So I feel that the logic behind this is again very simple and straightforward. Everyone knows about the geopolitical tensions, everyone knows about the state of Harmo's blockade and everything right.

[00:04:09] So as there is a shortage of supply of crude oil, so is there a shortage of supply with natural gas right. So if I'm talking about domestic household consumption, what is generally used? It is LPG correct. But instead of LPG, what could be an alternative for that? That is pipe natural gas or PNG and that is what is exactly supplied by IGL and MGL. Okay, or Mahanagar Gas oil. So I hope the thesis behind the

[00:04:35] investment, the logic behind the investment is also clear. In the next section we'll talk about which sector have they cut down their positions in and which stock have they completely exited. So rather than a sector, I may say that it's more of a theme and the theme is PSU where the trimming has happened. Among the PSU space, two names come up. One is Coal India where the allocation fell from 6.11% to 5.95%

[00:05:03] and the second one is Power Grid Corporation where the allocation fell from 7.16% to 6.99%. Now, honestly, I was a little bit surprised because right now everyone is talking about how power as a sector will come into focus and allocation being trimmed in this space comes up as a little surprise but I'm sure they might be looking at it from specific perspective and maybe it's more about whether they have the right evaluation currently or not. They might have their own hypothesis for that.

[00:05:32] But that's what it is and they have trimmed down the allocation in the PSU theme. Okay. Now, talking about a stock, which stock have they completely exited? The name is Balakrishna Industries and they have done a complete exit here selling entire holding of 22.74 lakh shares. Now, I also tried to understand the rationale behind this whether they have any, they have mentioned any reason behind this. At least I didn't find any news article or any interview where they have given the

[00:05:58] rationale behind that. Again, there might be some logic obviously, right? But with this exit, their total Indian equity portfolio in this fund has dropped from 33 stocks to 32 stocks in the month of April. Now, this again tells us a classic behavior of PPFCF. What is that? It's a concentrated portfolio that they believe in. It's a high conviction approach that they have. Why am I saying concentrated? Because 32 stocks, I must say it's only 32 stocks. It is concentrated portfolio because

[00:06:27] the AM number I told you was 1.4 lakh crores, right? So, with that and only 32 stocks, that's high conviction, that's high concentration. And here we have retail individual investors who have high conviction in 100 stocks. Well, I hope you are finding this video very useful. If you are, please don't forget to smash that like button and also subscribe to the channel if you have still not done that.

[00:06:55] Now, with that, let's move on to a sector which is at the highest allocation in this fund. But before we talk about that sector, we'll also talk about an allocation which is quietly rising and is extremely interesting. It's about the REIT allocation, okay? REITs is Real Estate Investment Trusts and their allocation has increased from 3.72% to 4.08%. And maybe this is a deliberate move to

[00:07:19] build in more and more stable cash flows in a current volatile market, right? In addition to this, also their international exposure is also increasing, not because of the actual fund outflows, because everyone knows again, fresh investments have been restricted since February 2022, since we have hit the overseas investment limit. But then why has the overall percentage moved? Just to give you

[00:07:44] some numbers, international equity allocation or the international equity exposure has rose from 10.59% in March to 11.82% in April, which was driven strongly by what? Performance of Alphabet, that is Google and Microsoft. So, this change from 10.59% to 11.82% is not because of fresh funds flowing out, but it's because of these shares which have given a nice run-up, okay? Now, with this interesting

[00:08:11] allocations, now let's move on to largest sectoral allocation. And again, it's an interesting one, which is banking. Now, as of April 2026, banks accounted for 19.88% of the total portfolio allocation. And it is like pretty much a dominant domestic sector by a wide margin in this fund. Now, what are they buying and how much is the weightage in their overall portfolio? HDFC Bank is the largest holding in

[00:08:41] the entire fund. So, it's not like highest in banking space, it's the highest weightage in the entire fund, which is HDFC. And it stands at a weightage of 7.94%. Again, I feel this is a classic PPFC style, which is a contrarian pick. When HDFC Bank was not doing well, that is where, again, same thought process. They might have believed that, okay, it may perform a little bit on a lower side, maybe in a short term or maybe somewhere in the medium term, but ultimately it will rise. So,

[00:09:07] maybe again, a contrarian pick, but still has been underperforming for the last two to three years as compared to its peers. Second one, let me talk about ICIC Bank, which is at 4.92% and it has the fifth largest position that has been added to in April. Kotak Mahindra Bank and Axis Bank stand at 4.03% and 2.99% respectively. So, overall, I believe that whatever overweight they have in banking,

[00:09:34] that's not like a passive outcome. It looks like a deliberate weightage given to the sector. And it's more of a value-driven weightage that has been given in this sector. And in fact, when I keep on talking to a lot of experts in this industry, many of them are of the opinion that if India's economy were to grow, then the backbone has to be very strong and the backbone is the banking sector. So, if banking sector performs well, ideally, our entire economy also can grow at a good pace.

[00:10:10] Now, let's talk about the cash deployment pointer and very important, their core investing philosophy. Well, whatever interviews I saw of CIO, Mr. Rajiv Tukkar, everyone has asked him the same question, what about your cash position? Because their cash position is pretty much on a higher side if we were to compare the cash position with other mutual funds. But finally, their cash position, combined cash, debt, arbitrage, all the buffer put together, that has dropped from 18.54% in March

[00:10:38] to 15.11% in April, which is a drop of 3.43 percentage points. But in spite of this drop, PPFCF remains India's most cash-heavy large fund. So, when I was also listening to one of his recent interviews, I quote him, he says, but look at the past 24 months headline indices like Nifty 50, they have not beaten commercial paper returns. We are not averse to deploying when opportunities come

[00:11:05] by. At the same time, just because we have cash, we will not forcefully deploy. So, I think that clearly tells us that they are not going to deploy cash just because they have it. They'll buy when they find value in certain stocks, right? Now, overall, let us come to a final conclusion that I have been talking about in the whole video. I am sure by now it has already been drilled into your mind. What is their key conviction? What is their key or core philosophy? Core philosophy is value buying without any doubt.

[00:11:35] That can also be proven with the fact that the PE of their fund PPFCF is currently at 15.98. Whereas, if I were to compare that with a PE of the overall FlexiCap category, that stands at 26.03, which is a discount of 38.6% to its peers. So, I feel this is not an accident. This is like the fund

[00:11:59] value investing DNA, which helps them to keep or keep them coming back to the whole thought process of finding undervalued stock and buying into them. So, if you're an existing investor in this fund, I feel this analysis should give you confidence that the fund managers are doing exactly the same thing that they have always been doing in the past. Which two things? Number one, value investing and number two, staying patient and disciplined. If you found value in today's video, please don't forget to smash

[00:12:27] the like button. Also, let me know in the comment section if you hold this particular mutual fund or not. And if you have loved this video, please don't forget to share this with your friends as well. I'll see you in the next one. Until then, take care. Bye-bye.