Suppose I have a website with a home page PR-4... and I go on creating new pages and add more content in it.
Is the Pr of the home page going to get decreased? As far as I know, PR of a page is mainly determined by the no. of backlinks pointing to a page. But at the same time some of my clients have experienced a bad fall in Pr during the last update....is it due to addition of new pages in the site? or something else?
Most likely you will not experience a PageRank decrease by adding new content.
Link Equity is a renewable resource. If an external link points to your homepage your homepage will use that link's equity then divide and pass the link equity to the pages that the home page links to. There is probably a dampening, so it does not pass 100% of the original link's equity, but the link equity is not subtracted from the home page.
The only way your home page might loose PageRank is if the majority of your external link equity is pointed at one or more pages other than the home page, and that those pages distribute and dilute your link equity before that link equity reaches your homepage. Of course, if you are like 99.5% of websites out there, every page links back to the homepage, so there should be zero problem.