Nearly a quarter of the portfolio sits in cash, waiting for the right moment.
In December, one of India's largest active equity funds made measured but meaningful moves — deepening its conviction in banking and infrastructure while quietly trimming its technology exposure and welcoming a shipping company into the fold. Parag Parikh Flexi Cap Fund, managing Rs 1.29 lakh crore in assets, is not rushing to put its capital to work; with nearly a quarter of its portfolio held in reserve, its managers are practicing the oldest discipline in investing — patience in the face of selective opportunity. The fund's December portfolio tells a story not just of where value is being found, but of how much restraint it takes to wait for it.
- The fund made bold, large-scale purchases in Power Grid and HDFC Bank, signaling genuine conviction in infrastructure and banking at a moment when many investors remain cautious.
- A quiet but telling trim of 12 lakh Infosys shares suggests the fund is recalibrating its technology exposure without abandoning the sector entirely.
- The arrival of Great Eastern Shipping as a new portfolio entrant hints at the fund's willingness to look beyond conventional large-cap narratives for long-term value.
- A 24% cash reserve — held across debt, money market, and arbitrage instruments — is the fund's loudest statement: opportunity exists, but not everywhere, and not yet urgently.
- With 17 holdings left untouched and the portfolio expanding from 29 to 30 stocks, the fund is navigating a market it reads as uneven — rewarding precision over momentum.
In December, Parag Parikh Flexi Cap Fund made a series of deliberate portfolio moves that reveal where its managers currently see durable value in the Indian market. The fund added nearly 40 lakh shares of ITC and made an even larger commitment to Power Grid Corporation, bringing its total stake in the infrastructure company to over 30 crore shares. These were not tentative positions — they were expressions of conviction.
Banking also received fresh capital. The fund purchased 52 lakh shares of HDFC Bank and 40 lakh shares of ICICI Bank, reinforcing what is already its largest sector allocation at just over 20 percent of the portfolio. Cipla, HCL Technologies, Kotak Mahindra Bank, Mahindra & Mahindra, TCS, and Zydus Lifesciences all saw their stakes increased as well.
On the other side of the ledger, the fund trimmed 12 lakh shares of Infosys — a reduction, not an exit — and introduced a new name entirely: The Great Eastern Shipping Company, with an initial purchase of 16.57 lakh shares. The portfolio grew from 29 stocks to 30, while 17 existing holdings were left unchanged.
Perhaps the most telling detail is what the fund is holding back. Despite active deployment, roughly 24 percent of its Rs 1.29 lakh crore in assets remains in cash, debt, and money market instruments. Led by Rajeev Thakkar, Raunak Onkar, and a team of seven, the fund's philosophy centers on individual company merit — management quality, business fundamentals, and valuation — rather than macroeconomic timing. That substantial cash reserve is not indecision; it is readiness, held in reserve for the moment the right opportunity arrives.
In December, Parag Parikh Flexi Cap Fund—the largest active flexicap fund by assets under management—made a series of deliberate moves that signal where its managers see value in the Indian market right now. The fund added nearly 40 lakh shares of ITC to its holdings. More significantly, it purchased 2.12 crore shares of Power Grid Corporation of India, bringing its total stake in the infrastructure company to 30.54 crore shares. These were not tentative bets. They were substantial commitments to two sectors the fund's managers believe warrant conviction.
The fund also deepened its presence in banking. It bought 52 lakh shares of HDFC Bank and 40 lakh shares of ICICI Bank during the month. Cipla, the pharmaceutical company, received an additional 2 lakh shares. Across the portfolio, the fund increased stakes in seven other holdings: EID Parry India, HCL Technologies, Kotak Mahindra Bank, Mahindra & Mahindra, TCS, and Zydus Lifesciences. The pattern is clear—the fund was actively buying where it saw opportunity.
But the fund was also willing to trim. It sold 12 lakh shares of Infosys, reducing its total holding from 1.76 crore shares in November to 1.64 crore in December. This was not a panic exit. The fund maintained its position in the IT services company; it simply decided to take some chips off the table. No stocks were completely abandoned during the month. Instead, the fund introduced a new name to its portfolio: The Great Eastern Shipping Company, purchasing 16.57 lakh shares in December.
The fund's portfolio grew from 29 stocks in November to 30 in December. Seventeen holdings saw no change in exposure, a list that includes Axis Bank, Bharti Airtel, Coal India, Maruti Suzuki India, and others—positions the fund deemed neither worthy of addition nor reduction. As of December 31, 2025, the fund managed Rs 1.29 lakh crore in assets, with banking stocks representing its largest sector allocation at just over 20 percent.
What stands out is what the fund is not doing with its capital. Despite having deployed significant sums into new and existing positions, the fund held roughly 24 percent of its assets in cash, debt, money market instruments, and arbitrage positions. This is a substantial dry powder reserve—a signal that the fund's managers, led by a team of seven including Rajeev Thakkar and Raunak Onkar, see the market as offering selective opportunities rather than a broad buying environment. The fund's stated philosophy is to evaluate each investment on its own merits: the quality of management, the strength of the sector, the business fundamentals like return on capital and growth prospects, and the valuation at which these assets trade. Macroeconomic conditions matter less than the individual company story. With nearly a quarter of the portfolio in cash, the managers are essentially saying they are ready to move when the right opportunities emerge—but they are not desperate to deploy capital today.
Notable Quotes
We continue to look at individual investments on their own merits and will not hesitate to invest if an opportunity looks attractive. Our investment stance does not depend much on the macroeconomic situation but is focused on individual companies.— Parag Parikh Flexi Cap Fund management
The Hearth Conversation Another angle on the story
Why would a fund manager hold a quarter of the portfolio in cash if they're confident about the market?
Because confidence in individual stocks doesn't require confidence in the overall market. They've found things worth buying—ITC, Power Grid, the banks—but they haven't found enough of them to deploy everything. The cash is optionality.
So the Infosys trim—is that a sign they've lost faith in IT services?
Not necessarily. They still own 1.64 crore shares. It's more likely they thought the valuation had moved ahead of the fundamentals, or they found better opportunities elsewhere. You trim winners sometimes just to rebalance.
The fund added Power Grid and HDFC Bank aggressively. What's the thesis there?
Infrastructure and banking are structural beneficiaries of India's growth. Power Grid especially—it's a regulated utility with steady cash flows. HDFC Bank is a quality franchise. Both are the kind of holdings you build over time.
Why introduce a shipping company now? That seems random.
Shipping is cyclical, but it's also tied to global trade and India's export growth. If the managers see a cycle turning, or a company trading below intrinsic value, they'll add it. It's not random—it's just not obvious from the outside.
The 24 percent in cash—how long can they sit on that?
As long as they need to. The fund's job isn't to be fully invested. It's to compound capital over time. If the best use of that cash today is to wait, they wait. When the right opportunity comes at the right price, they deploy it.