Can PPFAS Flexi Cap Fund handle Rs 1 lakh crore money? CEO Neil Parikh explains

Economic Times

22-07-2025

ETMarkets.com PPFAS Mutual Fund addresses concerns about managing a large AUM, emphasizing that stock limits apply at the fund level, not the scheme level.
One should always look at the fund-level Assets Under Management (AUM) and not the scheme-level AUM, as individual stock limits are applicable at the fund level, not at the scheme level, said Neil Parikh, Chairman and CEO of PPFAS Mutual Fund, while responding to questions on how the fund will handle a large AUM and whether they can continue delivering the same kind of returns.The CEO posted on social media platform X that, 'How will they handle such a large AUM?
Look at fund level AUM and not scheme level AUM as individual stock limits are at fund level, not scheme. So the best stock idea can have good allocation in one scheme instead of allocating the same idea in multiple schemes- basically dilute your best idea with multiple equity schemes. Our overall equity AUM is still less than 5% market share of total MF equity AUM. So this is not a concern. What will change is that there will be a longer tail of small cap stocks so the number of stocks may increase over time.
Can they continue delivering the same kind of returns with all this new money? - Only time will tell'
How will they handle such a large AUM?
- look at fund level AUM and not scheme level AUM as individual stock limits are at fund level, not scheme. So the best stock idea can have good allocation in one scheme instead of allocating the same idea in multiple schemes- basically… https://t.co/QKiEPFwpPD — NEIL PARIKH (@npparikh6) July 21, 2025
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Neil believes that the fund house's best stock ideas can be given adequate allocation in a single scheme, rather than spreading the same idea across multiple schemes—essentially diluting it with several equity offerings.The fund house also pointed out that its overall equity AUM remains under 5% of the total equity AUM of the mutual fund industry, indicating there is still significant room to grow and that this is not a concern.The CEO added that what will change is the inclusion of more small-cap stocks, leading to a higher number of holdings over time. As for whether the fund house can continue to deliver the same level of returns with this new influx of money, the response was: only time will tell.
This post by Neil Parikh came in response to a concern raised by an investor who has been investing in the PPFAS Flexi Cap Fund for the past five to six years. In response to another query regarding SEBI's new categorisation and rationalisation norms and whether PPFAS would consider launching a second scheme in the same category, Neil said, 'We will continue with one fund… not in favor of adding more complexities.'When asked how much the US exposure helped the Flexi Cap Fund, Parikh explained that foreign exposure helps lower portfolio volatility and provides downside protection. 'Overseas portfolio returns have been similar to or slightly lower than the Indian portfolio since inception,' he added.
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In May, the CEO informed the investors that the fund has crossed Rs 1 lakh AUM and is the first actively managed scheme to do so in India. Based on the last available portfolio (June 2025), it had an AUM of Rs 1.10 lakh crore from Rs 1.03 lakh crore in May.
According to June data, PPFAS Mutual Fund had Rs 23,598 crore cash in its kitty which was 21.62% of the total AUM. The fund house had an equity AUM of Rs 93,171 crore.
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