Equity markets have remained range-bound for over 2 years: What PPFAS’ Rajeev Thakkar wants investors to know
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Rajeev Thakkar, CIO and director at PPFAS Mutual Fund, told unitholders that two years of range-bound equity markets is "neither unusual in duration nor in the magnitude of the decline from previous peaks"
- PPFAS let cash in the Parag Parikh Flexi Cap Fund peak at ~25% during 2024's exuberance; the level has since fallen to 14–15% as buying opportunities emerge and could move to single digits
- Thakkar framed the current IT services sell-off as an opportunity rather than an existential threat, likening it to past panics over Y2K, cloud computing and SaaS, and argued AI will shift — not eliminate — outsourced implementation work
- PPFAS holds no direct exposure to pure-play AI model companies such as OpenAI or Anthropic; Thakkar said model quality alone is no longer decisive, with sovereignty, cost per token, speed and data privacy also mattering
- HDFC Bank's recent issues are not "materially threatening" to its franchise, Thakkar said, citing RBI oversight, diversified ownership and governance; the fund's four private-sector bank holdings retain their outlook
- As of 4 August, the Nifty 100 traded at a P/E of 20.8 versus 30.7 for the Nifty Midcap 150 and 34.6 for the Nifty Smallcap 250 — a spread Thakkar cited to justify opportunity-led small- and mid-cap exposure over cap-label chasing
- Indian Energy Exchange (IEX) is a sub-1% position in the portfolio; Thakkar said there is no certainty over the timing, form or segment impact of market coupling and the investment thesis will be revisited as data emerges
Why it matters: For investors who endured the 2-year grind, Thakkar's message is that the pain was within historical norms and that the fund's accumulated ~25% cash buffer — now actively being spent down to 14–15% — reflects improving return prospects, with the Nifty 100 at 20.8x earnings versus smallcaps at 34.6x giving PPFAS room to add selectively while explicitly avoiding direct bets on OpenAI or Anthropic.
Ask SkimNews
