Big change for Parag Parikh Flexi Cap: new IDCW option, exit route for investors

Parag Parikh Flexi Cap Fund, the flagship equity scheme from PPFAS Mutual Fund, will undergo a change in its fundamental attributes effective October 31, 2025. The fund will now include an IDCW (Income Distribution cum Capital Withdrawal) option alongside the existing growth plan, according to a notice issued by the fund house.

The update marks a shift in the fund’s structure, offering more flexibility to investors who prefer periodic payouts. Until now, the scheme only offered growth options under both direct and regular plans. The IDCW facility will now include both payout and reinvestment options, while the default remains growth, with payout as the default IDCW facility.

Net Asset Values (NAVs) for IDCW and growth options will be declared separately, although the underlying investment portfolio remains the same. Investors subscribing to the scheme will need to clearly indicate their preference during application.

The new framework aligns with SEBI’s revised mutual fund guidelines issued in June 2024. The fund house noted that under normal conditions, IDCW payments will be released within seven working days of the record date. In exceptional cases, the timeframe may extend to nine working days, as per SEBI and AMFI guidelines.

The IDCW distribution process, as laid out by the AMC, involves the scheme’s Trustee determining the dividend quantum and record date, followed by a public notice within one calendar day. Only after this public notice is issued can the dividend be formally declared. For IDCW frequencies up to one month, no prior notice is required.

Unitholders not in agreement with the change have been provided a 30-day exit window—from October 1 to October 30, 2025—to either redeem their investments or switch to another scheme of PPFAS Mutual Fund without incurring any exit load. After the effective date, redemptions will attract the standard load, if applicable.

Investors can submit redemption or switch requests online, at official service centres, or through their Depository Participant if units are held in demat form. Tax implications, including capital gains and TDS for NRI investors, will apply as outlined in the scheme’s offer documents.

PPFAS clarified that the cost of implementing the changes will not be passed on to unitholders.