PPFCF holdings HDFC Bank PPFCF holdings PPFAS Mutual Fund Banking sector Indian financials Rajeev Thakkar Private sector banks

HDFC Bank at PPFCF

From WebNotes, a public knowledge base. Last updated 16 May 2026. Reading time ~11 min.

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HDFC Bank Limited has been the most enduring domestic anchor holding of the Parag Parikh Flexi Cap Fund (PPFCF) and emerged as the single largest equity position in the April 2026 factsheet at 7.94 per cent of net assets. The position has been built over many years and through multiple cycles, including the July 2023 reverse-merger with parent company Housing Development Finance Corporation Limited (HDFC Ltd) and the subsequent integration period.

For PPFAS Mutual Fund and the fund management team led by Rajeev Thakkar , Raunak Onkar and Rukun Tarachandani , HDFC Bank represents one of the cleanest applications of the PPFAS value investing discipline within Indian financials. The bank’s combination of conservative underwriting, stable asset quality, branch and digital reach, and consistent return on assets has placed it among the highest-quality lenders in India for more than two decades.

This article documents HDFC Bank’s role in PPFCF: the company background, the original investment thesis under the PPFAS investment philosophy , the position history including the merger and re-rating cycles, and the contemporary positioning of the holding through the May 2026 factsheet, when the fund’s PPFCF AUM trajectory reached Rs 1,60,952 crore.

HDFC Bank is one of two large private-bank anchors in PPFCF, the other being ICICI Bank at PPFCF . Together the two banks constitute the spine of the fund’s exposure to the Indian banking-sector thesis.

Company background

HDFC Bank Limited is a private-sector commercial bank headquartered in Mumbai. It was incorporated in August 1994 as part of the financial-sector liberalisation that followed the 1991 economic reforms. The bank received its banking licence from the Reserve Bank of India in 1994 and commenced operations in January 1995 with its first branch at Sandoz House in Worli, Mumbai.

The bank’s parent until the July 2023 merger was Housing Development Finance Corporation Limited (HDFC Ltd), the housing-finance institution founded by H. T. Parekh and later led by Deepak Parekh and Keki Mistry. The reverse-merger of HDFC Ltd into HDFC Bank, announced on 4 April 2022 and completed on 1 July 2023, was at that time the largest M&A transaction in Indian corporate history. The combined entity emerged as one of the world’s largest banks by market capitalisation outside the United States, China, Japan and the United Kingdom.

HDFC Bank operates a comprehensive retail, wholesale and treasury franchise. Retail businesses include savings accounts, personal loans, credit cards, auto loans, home loans (post-merger), education loans, two-wheeler loans and gold loans. Wholesale banking serves large corporates, mid-market companies, government and PSU clients, multinational corporations, and small and medium enterprises. The treasury function manages the bank’s investments, foreign exchange, derivatives and balance-sheet asset-liability matching.

Sashidhar Jagdishan has been managing director and CEO since October 2020, succeeding Aditya Puri who built the franchise over two and a half decades. The official HDFC Bank website is hdfcbank.com and the bank’s shares are listed on the National Stock Exchange (ticker HDFCBANK) and the Bombay Stock Exchange (code 500180). HDFC Bank American Depositary Shares are listed on the New York Stock Exchange under ticker HDB.

Investment thesis at PPFCF

The HDFC Bank thesis at PPFCF rests on several pillars consistent with the PPFAS investment philosophy .

First, the highest-quality private-sector banking franchise in India. HDFC Bank’s history of disciplined underwriting, low slippage ratios, conservative provisioning and consistent return on assets (typically 1.8 to 2.0 per cent through cycles) is unmatched in the Indian banking system. For a value-investing team trained in moat analysis, the bank meets the textbook quality bar.

Second, the deposit franchise. HDFC Bank’s combination of branch reach (more than 9,000 branches by 2026), retail digital banking, salary-account capture and corporate cash-management relationships gives it one of the strongest current-account-savings-account (CASA) franchises in India. The low-cost deposit base provides a structural funding advantage.

Third, the post-merger asset-liability profile. The merger with HDFC Ltd brought a substantial home-loan portfolio into the bank’s books along with the parent’s debt liabilities. The integration period presented operational challenges but the combined entity now offers a more balanced retail-wholesale mix and cross-selling opportunities into HDFC Ltd’s existing customer base.

Fourth, valuation reset. The 2022 to 2024 period saw HDFC Bank’s price-to-book multiple compress to its lowest level in many years, partly because of merger-integration uncertainty and partly because of cyclical headwinds. This valuation reset within the PPFAS margin of safety framework was an opportunity for accumulation.

Fifth, PPFAS tax-aware portfolio management . HDFC Bank’s quality and the fund team’s conviction supported low-turnover ownership, deferring Section 112A long-term capital gains liability. The bank has also distributed dividends consistently.

Sixth, position-sizing discipline within the PPFAS focused portfolio of 25 to 35 stocks. HDFC Bank’s quality justified a top-tier position weight, but the fund team has balanced concentration risk through the parallel ICICI Bank position and complementary financial-sector holdings such as Bajaj Holdings at PPFCF .

Position history

HDFC Bank has been a portfolio holding of PPFAS schemes from the early years of PPLTVF after its May 2013 launch. Through the 2013 to 2020 period, the bank was typically among the top ten domestic positions, with weight varying by valuation cycle.

The 2018 SEBI scheme rationalisation, renaming PPLTVF as Parag Parikh Long Term Equity Fund on 16 February 2018, did not affect the position. The January 2021 transition to the flexi-cap mutual fund in India category preserved the multi-cap mandate within which the bank fits naturally as a large-cap anchor.

The April 2022 merger announcement and the July 2023 completion were the most consequential events in the recent history of the position. The combined HDFC Bank shares began trading on the merged basis from 13 July 2023. The integration cycle that followed brought a period of underperformance relative to the Nifty 50 and the Nifty 500 TRI benchmark, during which PPFAS continued to accumulate.

The February 2022 SEBI MF overseas investment cap freeze, which led PPFCF to suspend lump-sum and fresh SIP/STP registrations from 2 February 2022 and to compress foreign exposure as a percentage of growing domestic AUM, indirectly contributed to a higher domestic weight including in HDFC Bank.

By the disclosure period in 2025 when Amazon at PPFCF was 8.51 per cent, ITC at PPFCF was 7.99 per cent and Alphabet at PPFCF was 7.08 per cent, HDFC Bank was among the next tier of significant weights. Through the second half of 2025 and into early 2026 the position grew further. The April 2026 factsheet showed HDFC Bank at 7.94 per cent, the top equity holding in the fund.

Recent positioning

The April 2026 PPFCF factsheet, when AUM reached Rs 1,40,949 crore (up 9.29 per cent month-on-month from Rs 1,28,966 crore in March), showed HDFC Bank at 7.94 per cent, Power Grid Corporation at PPFCF at 6.99 per cent and Coal India at PPFCF at 5.95 per cent as the top three. The configuration reflected a portfolio increasingly anchored in high-quality private financials, regulated utilities and PSU dividend-payers.

The May 2026 commentary from Rajeev Thakkar on the fund’s 18 to 22 per cent PPFAS cash holdings position emphasised valuation caution across the broader market. HDFC Bank’s relative valuation, however, remained attractive in the team’s view, and the position was retained at top weight.

At the 12th annual unitholders’ meet on 22 November 2025 at Birla Matushree Sabhaghar, Mumbai, the team discussed HDFC Bank’s post-merger trajectory, including loan-deposit ratio normalisation, net-interest-margin recovery and the eventual normalisation of return on assets and return on equity towards historical norms.

Comparison with peer holdings

HDFC Bank sits alongside ICICI Bank as the two large private-sector bank anchors in PPFCF. Relative to ICICI Bank, HDFC Bank has historically operated with higher reported NIMs, lower slippage ratios and a more retail-skewed loan book. ICICI Bank has typically traded at lower price-to-book multiples and offered a stronger turnaround narrative.

Compared with Bajaj Holdings at PPFCF , which provides indirect exposure to Bajaj Finance, Bajaj Finserv and Bajaj Auto, HDFC Bank gives direct bank-franchise exposure. Within the financial-sector sleeve of PPFCF, HDFC Bank is the largest single position by weight.

Compared with foreign positions in Alphabet at PPFCF , Microsoft at PPFCF , Amazon at PPFCF and Meta Platforms at PPFCF , HDFC Bank offers rupee-revenue, India-economic-cycle and domestic-deposit-franchise exposure. The combination is consistent with PPFCF’s structural design of mixing global compounders with high-quality Indian businesses.

Context within PPFCF

PPFCF was launched on 24 May 2013 as PPLTVF, renamed Parag Parikh Long Term Equity Fund on 16 February 2018 and renamed Parag Parikh Flexi Cap Fund on 13 January 2021. The scheme is benchmarked against the Nifty 500 TRI and has delivered CAGR since inception of approximately 19.06 per cent against a category average of 15.22 per cent and the Nifty 500 TRI at 12.4 per cent. AUM crossed Rs 1 lakh crore in May 2025 and reached Rs 1,60,952 crore by 15 May 2026.

The fund is managed by Rajeev Thakkar , Raunak Onkar , Raj Mehta , Rukun Tarachandani and other team members. The mutual fund was set up with SEBI on 10 October 2012 under registration ID MF/069/12/01. Parag Parikh founded the underlying advisory firm in 1979.

External references

HDFC Bank: hdfcbank.com
HDFC Bank investor relations: hdfcbank.com/personal/about-us/investor-relations
PPFAS AMC factsheet archive: amc.ppfas.com/downloads/factsheet
PPFAS scheme page (PPFCF): amc.ppfas.com/schemes/parag-parikh-flexi-cap-fund
SEBI: www.sebi.gov.in

References

INDmoney, “PPFAS Flexi Cap April 2026 portfolio update,” indmoney.com .
PPFAS Mutual Fund, October 2025 factsheet, amc.ppfas.com .
PPFAS Mutual Fund, March 2026 factsheet, amc.ppfas.com .
Business Today, “Why PPFAS Flexi Cap fund is holding cash even after a 10 per cent fall,” businesstoday.in .
Angel One, “Parag Parikh Flexi Cap Fund crosses one lakh crore AUM,” angelone.in .
HDFC Bank, Annual Report 2024-25, hdfcbank.com .

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 16 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.