Sundaram Finance at PPFCF (historic)

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Sundaram Finance Limited was a periodic significant non-banking financial company (NBFC) holding of the Parag Parikh Flexi Cap Fund (PPFCF) in earlier years. The position is documented in PPFCF factsheet portfolio listings from the multi-cap years (when the scheme was named Parag Parikh Long Term Value Fund and later Parag Parikh Long Term Equity Fund) and into the early Flexi Cap phase before the position was reduced and eventually exited.

The Sundaram Finance thesis combined several elements of the broader PPFAS investment philosophy. First, conservative underwriting: Sundaram Finance has been among the most conservatively managed NBFCs in India, with one of the longest track records of consistent profitability and low credit losses. Second, auto-financing franchise: the company is one of India’s oldest and largest commercial-vehicle and car-financing NBFCs, with deep relationships with manufacturers and dealers. Third, disciplined valuation discipline: PPFAS built positions during periods of valuation compression. Fourth, the holding-company-like structure: Sundaram Finance holds significant stakes in group companies (Sundaram Asset Management, Sundaram Home Finance, Royal Sundaram General Insurance among others), providing some embedded value beyond the core lending franchise.

The eventual exit illustrates PPFAS Mutual Fund’s discipline on capital reallocation. When valuations re-rated or when fund-team views on the relative attractiveness of competing positions shifted, the team has historically been willing to exit even high-quality franchises. This is consistent with the broader PPFAS value investing doctrine of valuation discipline trumping franchise affection.

This article documents Sundaram Finance’s historic role in PPFCF: the company background, the investment thesis as articulated when the position was active, the position history including the exit, and the context within the broader pattern of Notable PPFAS exits.

Company background

Sundaram Finance Limited was incorporated on 11 August 1954 as a subsidiary of Madras Motor Insurance Co. (later merged with United India Insurance) by T. S. Santhanam, one of the founding family members of the broader TVS group. The company started as a hire-purchase NBFC focused on commercial-vehicle financing, particularly for Ashok Leyland trucks. Over seven decades the company has expanded into car financing, two-wheeler and three-wheeler financing, equipment financing and other lending lines.

Sundaram Finance is the listed flagship of the Sundaram group within the broader TVS family. The group operates Sundaram Finance (lending), Sundaram Asset Management Company (mutual funds, including Sundaram Mutual Fund), Sundaram Home Finance (housing finance), Royal Sundaram General Insurance Company (general insurance, in partnership with Royal & SunAlliance until reorganisation), Sundaram BNP Paribas (a previous joint venture) and various other businesses.

The company’s equity shares are listed on the National Stock Exchange and the Bombay Stock Exchange and are part of the Nifty 500 TRI. The official corporate website is sundaramfinance.in. The registered office is at Chennai. T. T. Srinivasaraghavan served as managing director for an extended period, followed by Harsha Viji.

For Indian retail investors, exposure to Sundaram Finance is available through direct equity purchase on the NSE/BSE or through diversified equity mutual fund schemes. PPFCF’s historic exposure delivered indirect ownership through a SEBI Mutual Funds Regulations 1996 registered scheme.

Investment thesis at PPFCF

The PPFAS thesis on Sundaram Finance, when the position was active, combined several pillars.

First, PPFAS margin of safety. Sundaram Finance’s price-to-book multiple varied through cycles, providing valuation-driven entry windows. The team has typically entered or added to the position during compression phases.

Second, conservative underwriting culture. Sundaram Finance has been among the most conservatively managed NBFCs in India, with low non-performing-asset ratios through multiple credit cycles. The combination of deep dealer relationships, regional concentration in southern India and disciplined underwriting standards supported through-cycle return on equity.

Third, auto-financing franchise. Sundaram Finance is among the largest commercial-vehicle and car-financing NBFCs in India, with established relationships with Ashok Leyland, Tata Motors, Mahindra, Maruti Suzuki and others. The deep customer-relationship channel and brand recognition supported volume sustainability.

Fourth, holding-company-like structure. Sundaram Finance’s stakes in group companies (Sundaram Asset Management, Sundaram Home Finance, Royal Sundaram General Insurance) provided embedded value beyond the core lending franchise. The team has highlighted this in factsheet commentary as a PPFAS value investing consideration.

Fifth, PPFAS focused portfolio discipline. Sundaram Finance met the team’s quality bar through its underwriting culture, group ecosystem and balance-sheet management.

Position history and exit

Sundaram Finance has appeared in PPFCF factsheet portfolio listings as one of the recurring Indian holdings during earlier periods of the fund’s history. The position has been mentioned in factsheets alongside other recurring Indian holdings such as ICICI Bank, Maruti Suzuki, Mahindra and Mahindra, Hero MotoCorp, Infosys, TCS, HCL Technologies, Persistent Systems, Cipla, Kotak Mahindra Bank, IPCA Laboratories, ICRA and Bajaj Holdings.

The position was reduced and eventually exited as part of capital reallocation. The fund team has not always disclosed specific exit timing, but the broader pattern is documented in the Notable PPFAS exits compilation. Reasons for exits across the PPFCF history have typically included valuation reaching reasonable-to-full territory, reallocation of capital to higher-conviction positions, deterioration of fundamentals in specific cases, and broader sector-allocation rebalancing.

By the April 2026 factsheet disclosure, when PPFCF AUM reached Rs 1,40,949 crore (up 9.29 per cent month-on-month from Rs 1,28,966 crore in March 2026), Sundaram Finance was not among the listed top-tier holdings. The top three at April 2026 were HDFC Bank at PPFCF 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.

Recent positioning

Sundaram Finance does not appear among the recurring top-tier PPFCF holdings in current 2025 to 2026 factsheets. The historic position is documented for completeness within the broader study of PPFAS’s portfolio evolution. The team continues to maintain banking and NBFC exposure through HDFC Bank at PPFCF, ICICI Bank at PPFCF, Kotak Mahindra Bank at PPFCF and (indirectly through Bajaj Finance) Bajaj Holdings at PPFCF.

Comparison with peer holdings (historic)

Within the historic PPFCF financial-services sleeve, Sundaram Finance sat alongside HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bajaj Holdings at PPFCF and ICRA at PPFCF. Compared with the private-sector-bank holdings, Sundaram Finance provided concentrated NBFC and auto-financing exposure with a different cyclical profile (more sensitive to commercial-vehicle and car-financing cycles).

Compared with Bajaj Holdings, Sundaram Finance offered a more direct lending franchise rather than holding-company exposure to a diversified financial-services group. Compared with ICRA, Sundaram Finance provided lending exposure rather than rating-agency-fee exposure.

Within the broader PPFAS focused portfolio framework, Sundaram Finance’s historic position complemented ITC at PPFCF, the technology cluster (Infosys at PPFCF, TCS at PPFCF, HCL Technologies at PPFCF), the consumer-discretionary cluster and other anchor Indian holdings.

Context within PPFCF

PPFCF was launched on 24 May 2013 as Parag Parikh Long Term Value Fund (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 a compound annual growth rate 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, making PPFCF the first active equity mutual fund scheme in India to do so, and rose to roughly Rs 1.6 lakh crore by 15 May 2026.

The fund is managed by Rajeev Thakkar along with Raunak Onkar, Raj Mehta, Rukun Tarachandani and other team members. Parag Parikh, the founder of the Parag Parikh Financial Advisory Services Limited sponsor entity, established the investing house in 1979 and incorporated PPFAS Ltd in December 1992. The mutual fund was set up with SEBI on 10 October 2012 under registration ID MF/069/12/01.

The Sundaram Finance position is part of the broader historic record discussed at successive editions of the PPFAS Annual Unitholders Meet. The 12th edition was held on 22 November 2025 at Birla Matushree Sabhaghar in Mumbai.

See also

External references

References

  1. PPFAS Mutual Fund, historical monthly factsheets, amc.ppfas.com.
  2. PPFAS Mutual Fund, October 2025 factsheet, amc.ppfas.com.
  3. PPFAS Mutual Fund, March 2026 factsheet, amc.ppfas.com.
  4. INDmoney, “PPFAS Flexi Cap April 2026 portfolio update,” indmoney.com.
  5. Angel One, “Parag Parikh Flexi Cap Fund crosses one lakh crore AUM,” angelone.in.
  6. Sundaram Finance Limited, Annual Report 2024-25, sundaramfinance.in.
  7. Reserve Bank of India NBFC sector statistics.

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