Description

PPFAS Mutual Fund introduces Income Distribution cum Capital Withdrawal (IDCW) option for Parag Parikh Flexi Cap Fund effective October 31, 2025.

Summary

PPFAS Asset Management Private Limited has announced changes to the fundamental attributes of Parag Parikh Flexi Cap Fund. The Trustees have approved the introduction of an Income Distribution cum Capital Withdrawal (IDCW) option for the scheme, effective October 31, 2025. This change is made in accordance with SEBI (Mutual Funds) Regulations, 1996, specifically Regulation 18(15A) and Regulation 25(26), and under enabling provisions of the Scheme Information Document (SID).

Key Points

  • New IDCW (Income Distribution cum Capital Withdrawal) option introduced for Parag Parikh Flexi Cap Fund
  • Change approved by PPFAS Trustee Company Private Limited
  • Modification made under SEBI regulations and existing SID provisions
  • Scheme continues as open-ended dynamic equity scheme investing across large cap, mid cap, and small cap stocks
  • Investment objective remains to generate long-term capital growth from actively managed equity portfolio
  • Scheme invests in Indian equities, foreign equities, and debt securities with value investing philosophy
  • Minimum 65% allocation to equity and equity related instruments, maximum 100%
  • Foreign equity exposure allowed up to 35% of net assets
  • Investment horizon recommended: 5 years and above

Regulatory Changes

The change involves modification of fundamental scheme attributes under:

  • SEBI (Mutual Funds) Regulations, 1996 - Regulation 18(15A) (fundamental attribute changes)
  • SEBI (Mutual Funds) Regulations, 1996 - Regulation 25(26) (trustee approval requirements)
  • Aligned with SEBI Master Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024

The scheme maintains compliance with:

  • Maximum cumulative gross exposure of 100% of net assets through equity, debt, derivatives, REITs, InvITs
  • Securitized debt investments capped at 25% of net assets

Compliance Requirements

For PPFAS Mutual Fund:

  • Update Scheme Information Document (SID) to reflect new IDCW option
  • Maintain compliance with asset allocation norms (minimum 65% equity)
  • Ensure gross exposure limits not exceeding 100% of net assets
  • Continue adherence to SEBI guidelines on derivative positions

For Investors:

  • Existing investors can opt for new IDCW option if desired
  • Investment horizon of minimum 5 years recommended
  • No mandatory action required for existing unitholders

Important Dates

  • October 31, 2025 (Friday): Effective date for introduction of IDCW option
  • October 30, 2025: Notice issued by PPFAS Mutual Fund

Impact Assessment

Market Impact: Minimal to none. This is an operational change specific to one mutual fund scheme and does not affect stock market trading or operations.

Investor Impact:

  • Provides additional flexibility to investors who prefer periodic income distribution over capital accumulation
  • Existing Growth option investors are not affected
  • New investors get choice between Growth and IDCW options
  • No change to underlying investment strategy or asset allocation

Operational Impact:

  • BSE StAR MF platform will list the new IDCW option alongside existing Growth option
  • Fund house needs to update documentation and systems for dividend processing
  • No impact on scheme’s core investment philosophy or portfolio management

Fund Characteristics Unchanged:

  • Open-ended dynamic equity flexi cap scheme structure maintained
  • Value investing philosophy continues
  • Asset allocation pattern remains same (65-100% equity)
  • Foreign equity exposure limit unchanged at 35%
  • Long-term investment horizon recommendation (5+ years) continues

Impact Justification

Addition of new dividend option to existing mutual fund scheme. Does not affect stock trading or market operations. Relevant only to existing and prospective investors of this specific mutual fund scheme.