Description

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

Summary

PPFAS Asset Management Private Limited has announced the introduction of an IDCW (Income Distribution cum Capital Withdrawal) option in the Parag Parikh Flexi Cap Fund. This change has been approved by PPFAS Trustee Company Private Limited in accordance with SEBI (Mutual Funds) Regulations, 1996, specifically Regulation 18(15A) and Regulation 25(26). The change represents a modification to the fundamental attributes of the scheme and will be effective from October 31, 2025.

Key Points

  • New IDCW option being introduced for Parag Parikh Flexi Cap Fund
  • Change approved under SEBI (Mutual Funds) Regulations, 1996
  • Effective date: Friday, October 31, 2025
  • Fund is an open-ended dynamic equity scheme investing across large cap, mid cap, and small cap stocks
  • Investment objective: Generate long-term capital growth from actively managed portfolio of equity and equity-related securities
  • Fund invests in both Indian equities and foreign equities (up to 35% in foreign equity and debt securities)
  • Investment philosophy: Value investing - buying securities at discount to intrinsic value
  • Recommended investment horizon: 5 years and more
  • Minimum equity allocation: 65% of net assets
  • Maximum debt securities allocation: 35% of net assets

Regulatory Changes

The introduction of the IDCW option constitutes a change in fundamental attributes under SEBI regulations. The notice has been issued in compliance with:

  • Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996
  • Regulation 25(26) of SEBI (Mutual Funds) Regulations, 1996
  • Enabling provisions in the Scheme Information Document (SID)

The scheme continues to operate under SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, with cumulative gross exposure through various instruments not exceeding 100% of net assets.

Compliance Requirements

  • Scheme Information Document (SID) to be updated with provisions for the new IDCW option
  • Investors to be notified of the fundamental attribute changes
  • Fund to maintain compliance with asset allocation norms:
    • Equity and equity-related instruments: 65-100% (High/Medium/Low risk)
    • Debt Securities: 0-35% (Medium to High risk)
    • Foreign Equity and Debt Securities: 0-35% (Low to Medium risk)
    • Money Market Instruments: 0-10% (Medium to High risk)
    • REITs & InvITs units: 0-10% (Medium to High risk)
  • Securitized debt investments limited to 25% of net assets

Important Dates

  • Effective Date: Friday, October 31, 2025
  • Notice Date: October 30, 2025

Impact Assessment

This change provides investors with an additional option to receive income distributions along with capital withdrawal from the Parag Parikh Flexi Cap Fund. The IDCW option is particularly relevant for investors seeking periodic income from their mutual fund investments rather than pure capital appreciation.

Investor Impact: Existing investors can choose to switch to the IDCW option if they prefer income distribution, while new investors will have the choice between growth and IDCW options. The underlying investment strategy and asset allocation remain unchanged.

Market Impact: Minimal direct market impact as this is an operational change specific to one mutual fund scheme. However, it may attract a different investor segment interested in dividend/income distribution options.

Fund Operations: The fund management company will need to track and process dividend distributions for IDCW option holders while maintaining the same portfolio management strategy across all options.

Impact Justification

Introduces new investment option for existing mutual fund scheme affecting investor choices, but does not impact trading operations or compliance requirements broadly