Mahindra Flexi Cap fund NFO launched


Mahindra Mutual Fund is coming out with a NFO in the form of Mahindra Flexi cap Fund.

Mahindra Flexi cap Fund would be a flexi cap fund with no restriction to any caps.

The fund would be open for subscription from July 30, 2021 to August 13, 2021.

mahindra mutual fund


NFO details for Mahindra Flexi Cap Fund

Scheme Opens


Scheme Closes


Fund Manager

Ms. Fatema Pacha

Mr Manish Lodha


Nifty 500 TRI

Minimum Investment


Fund Category

Flexi Cap

Exit Load

0.5% if redeemed/switched within 3 months.

Nil if redeemed/switched after 3 months


Mahindra Flexi Cap Fund would be an open – ended dynamic equity fund with freedom to invest across large, mid and small cap stocks with no restriction with respect to caps.

The scheme would reopen for investment from 25th August 2021.


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Mahindra Flexi Cap Fund Investment Objectives

The investment objective of the fund is to generate long term growth while identifying and investing in opportunities across market caps through an in house market cap model.

There is no guarantee that the investment objectives of the scheme would be achieved.



Mahindra Flexi Cap Fund Allocation

The asset allocation for the fund would be something like this

Asset Class

Minimum %

Maximum %

Equity and Equity Related instruments of large, mid and small cap companies



Debt and money market securities (including TREPS (Tri Party Repo), Reverse Repo)



Units issues by REITS and InvITs




The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.



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Features of Mahindra Flexi cap fund

The fund will implement a top down and bottom up approach.

The investing strategy will be based on an in house model.

The in house system of GCMV will be used to determine fair valuation of stocks.



Pricing power

Cost efficiency

ESG risks & opportunities


Cash flow generation

Cost & margins

Ability to finance growth

Overall financial strength



Management track record

Capital allocation



Fair value analysis

Value creation



Example of Top Down and Bottom up approach

Top Down

Bottom Up

Economic Indicators


Global factors



Historic return ratios

Future earnings potential



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Mahindra Flexi Cap Fund Investment style

As mentioned earlier, the fund would follow a top down and bottom up approach.

The fund would be actively managed.

The fund would have a core portfolio and a satellite portfolio.

Core portfolio would include medium to long term compounding stories whereas satellite portfolio would include tactical investment opportunities i.e. cyclical sector, commodities sector, etc.


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Multicap mutual fund

A multicap mutual fund is a mutual fund that would by mandate need to invest a minimum of

  1. 25% in large cap stocks
  2. 25% in mid cap stocks
  3. 25% in small cap stocks

The remaining 25% can either be invested in debt, international equity, cash or any of the above caps or all.

In order to qualify as a multi cap mutual fund, a mutual fund needs to invest a minimum of 75% in domestic equity divided as described above.


What is a flexi cap mutual fund?

A flexi cap mutual fund needs a minimum of 65% investment in equities at all times.

There is no restriction with regards to caps or sectors.

There is no restriction with regards the remaining 35% as well.

The fund manager can invest the remaining 35% as per her wish in any of the following:

  1. Domestic Equity
  2. International Equity
  3. Cash
  4. Debt

What is imperative is that 65% at all times is invested in equities to qualify as a flexi cap fund.

Basically, a flexi cap fund is exactly what a multi cap fund used to be earlier before the new rules set in, the only change is in the name.



Difference between multi cap and flexi cap mutual fund


A flexi cap fund needs a minimum of 65% investment in equity.

A multi cap fund needs a minimum of 75% investment in equity.



No compulsory investment in mid and small cap stocks

A multi cap fund needs to compulsorily invest a minimum of 25% each in mid and small cap stocks.



It can invest its complete portfolio into large cap stocks if needed.

It can invest only up to 50% of its complete portfolio in to large cap stocks at any given time.



Needs a lower minimum exposure to equity as compared to a multi cap fund.

Needs a higher minimum exposure to equity as compare to a flexi cap fund.



Why the need for flexi cap mutual funds?

The Securities and Exchange Board of India (SEBI) had on 11/09/2020 issued a circular bringing about changes to fundamental characteristics of Multicap mutual funds.

The regulator believed that most multicap mutual fund schemes were basically large cap schemes in terms of their asset allocation disguised as multi cap funds.


These multicap mutual fund schemes were therefore not true to their label.



"In order to give more flexibility to the mutual funds and taking into account the recommendations of Mutual Fund Advisory Committee (MFAC), a new category named 'Flexi Cap Fund' under equity schemes will be available,"



Most mutual fund houses had raised concern of the necessary investments in mid and small cap stocks.


With mandatory 25% investment into mid and small cap stocks (50 % overall) the new multicap fund structure would have become even more aggressive than a large & mid cap mutual fund scheme.


Mid and small cap stocks are more illiquid than large cap stocks and this would have created the risk of an unnecessary bubble.


Mutual fund houses had the option of converting an existing multicap mutual fund scheme into a flexi cap mutual fund.


SEBI has mentioned in the circular that "Mutual Funds have the option to convert an existing scheme into a Flexi Cap Fund subject to compliance with the requirement for change in fundamental attributes of the scheme in terms of Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996,".


Most mutual fund houses decided to convert their existing multi cap schemes into flexi cap schemes except a handful few which included Mahindra mutual fund.

Therefore now Mahindra mutual fund has decided to launch a flexi cap fund.


List of Multicap funds as on 1st March 2021

Baroda Multicap

BNP Paribas Multicap

ICICI Pru Multicap

Invesco Multicap

ITI Multicap

Mahindra Manulife Multicap

Nippon Multicap

Principal Multicap

Quant Active Multicap

Sundaram Equity Multicap



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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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