Forget Google & Microsoft: This one Indian giant now rules Parag Parikh Flexi-Cap Fund’s portfolio

The 1.3 lakh crore elephant in the room has a favourite stock. The latest portfolio statement for November 2025 tells a story that would surprise many. 

This elephant in the room, which you rightfully guessed as PPFAS Flexicap Fund, has for some time now chosen to play favourites with a stock that is otherwise considered boring, disappointing even. The stock in question? Indian private lender HDFC Bank. PPFAS Flexicap’s holding in HDFC Bank is now over 8% of the entire scheme. 

PPFAS Flexciap measures itself against the Nifty 500 (TRI) as its Tier 1 benchmark and the Nifty 50 (TRI) as an additional yardstick. Since its launch in May 2013, the Regular Plan has delivered a CAGR of 18.85%, ahead of the Nifty 500’s 15.20% and the Nifty 50’s 13.92%. 

The fund has a beta of 0.57, which suggests far less market volatility, along with a standard deviation of 8.41% that points to controlled price movement. It also carries a Sharpe ratio of 1.66, indicating that returns have comfortably exceeded the risk taken. Portfolio turnover remains low at 12.67% when arbitrage is excluded.  In all, the fund has turned in an exemplary performance over the years. 

The 8% Bet: HDFC Bank takes the throne

The biggest piece of the puzzle is HDFC Bank. The fund currently holds 10.34 crore shares of the bank, valued at Rs 10,427 crore. At 8.03% of the net assets, HDFC Bank isn’t just another holding; it is the cornerstone of the domestic portfolio.

To put this in perspective, this single domestic bet is nearly double the weight of the fund’s largest foreign holding, Alphabet. The investment team led by Rajeev Thakkar has a massive concentration in the Banking sector, which occupies 20.14% of the entire portfolio. This isn’t just about domestic banks; it includes a tiered approach where ICICI Bank and Kotak Mahindra Bank provide a secondary layer of support to the HDFC Bank fortress.

Another striking pattern is the fund’s appetite for Power and Consumable Fuels. Power Grid and Coal India act as high-yield, stable pillars within the equity portion.

 Here is how the heavyweights stack up in the current hierarchy:

What’s Happening with the Global Giants?

The “Flexi” in the name used to mean a diversification. But regulatory caps on foreign investments have turned those global holdings into a stagnant pool. While the fund has the flexibility to invest up to 35% in overseas securities, the current factsheet shows that foreign holdings have stayed at 11.51%

• Alphabet (Google): 4.17%
• Meta (Facebook): 2.64%
• Microsoft: 2.49%
• Amazon: 2.21%

The 24% “Waiting Room”: Cash and Debt Breakdown

Perhaps the most interesting data point is the over 24.% of funds currently sitting in cash, debt, money market instruments, and arbitrage positions. The fund is explicitly waiting for possibly attractive opportunities to deploy the capital. This massive cash horde of Rs 30,000 crores is parked across very specific instruments.

The arbitrage and special situations buffer

A specific 3.04% of the fund is currently allocated to arbitrage and special situations. This segment is not about long-term business growth but about capturing the price difference between the cash and futures markets. These positions ensure this portion of capital remains productive without exposure to broader market swings. These situations also include corporate events like mergers, delisting announcements, or open offers where a predictable price gap exists.

The 21% cash wall and the debt ladder

The core of the fund’s defensive posture is the 21.00% held in debt and money market instruments. This is a calculated “debt ladder” designed for maximum liquidity and safety. The fund holds a long list of Certificates of Deposit (CDs) from India’s primary banking institutions, almost all carrying the highest credit ratings like CRISIL A1+ or IND A1+.

The fund holds Certificates of Deposit from top-tier institutions, almost all carrying the highest short-term ratings.

Key holdings include:

• Axis Bank: 0.48%
  
• Bank of Baroda: 0.48%
  
• Canara Bank: 0.45%
  
• Punjab National Bank: 0.42%
  
• NABARD: 0.37%
  
• SIDBI: 0.36%
  

These instruments mature across different points between December 2025 and September 2026, ensuring that cash is constantly becoming available if equity opportunities arise. Spread across multiple issuers, the fund avoids concentration risk while earning a reasonable yield on parked capital.

Sovereign safety and Treasury Bills

To further fortify the portfolio, the fund holds various Sovereign Treasury Bills (T-Bills). These represent the highest level of safety in the Indian financial system. The fund has distributed its T-Bill holdings across different time horizons, including 364-day bills maturing in December 2025 (0.23%), January 2026 (0.15%), July 2026 (0.08%), and October 2026 (0.26%). This sovereign cushion ensures that the fund can meet redemptions or pivot back into stocks instantly if a market correction provides an entry point.

REITs and real assets

The portfolio also includes a small but intentional 1.09% allocation to Real Estate Investment Trusts. This adds a layer of yield-backed real estate exposure without taking direct property risk.

The REIT holdings are:

• Embassy Office Parks REIT: 0.57%
  
• Brookfield India Real Estate Trust: 0.11%
  
• Mindspace Business Parks REIT: 0.03%
  

This is not a return-chasing move; it is diversification with income.

‘Skin in the Game’ approach

The ultimate vote of confidence comes from the fund house itself. The “Insiders” including designated employees and AMC directors, have Rs 612.80 crores of their own money invested in this specific Flexi Cap scheme. This “skin in the game” aligns the managers’ interests directly with the retail unit-holders.

Investor’s takeaway

The Parag Parikh Flexi Cap Fund today looks like a dual-speed machine. About 75.25% of the portfolio is deployed in high-conviction equities, including the investments in international stocks doing the heavy lifting. Another 24.04% sits quietly in reserve, earning modest returns and waiting for the right moment. It refuses to pounce on overpriced global tech stocks until they wander into a more favourable “margin-of-safety” territory. The presence of over Rs 30,000 crores in non-equity instruments indicates that the managers are adhering strictly to value-investing principles. However, the current breakdown suggests they find many current market valuations do not offer the necessary margin of safety.

The fund is effectively a patient observer with a loaded gun. While the equity portion does the heavy lifting, the cash and arbitrage wall ensures that when the market finally falters, the fund has the dry powder to strike.

Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.