Investment

Caledonia Investments PLC
29 November 2005





Caledonia Investments plc



Investment in India Capital Growth Fund Limited



Caledonia Investments plc ('Caledonia') has agreed to subscribe for 20% (subject
to a maximum of £15m) of a new, closed ended investment company, India Capital
Growth Fund Limited ('ICGF' or 'the fund'), which will invest predominantly in
under-researched and attractively valued small and mid-cap listed and unlisted
companies in India.


The Board of ICGF met last week and approved the release through Arbuthnot
Securities Limited of the pathfinder admission document to launch the fund. The
statement issued by ICGF is attached below.


The fund plans to raise between £75m and £100m before expenses and intends to be
listed on AIM.  It will be managed by India Investment Partners Limited ('IIP'),
but initially (until IIP itself becomes FSA registered) by Polar Capital LLP
with staff seconded from IIP.  IIP brings together an experienced team with a
proven track record in investing in India and will be 43% owned by Caledonia and
57% by management.  The IIP team has a local perspective built up over a decade
of relevant experience in India.




Arbuthnot Securities Limited will act as nominated adviser and broker to the
fund.



Commenting on the proposed investment, Tim Ingram, Caledonia Chief Executive
said:



'We have worked with core of the team from India Investment Partners since
January 2004 and they have introduced us to some excellent Indian companies.  We
are delighted to be backing a strong team.'



29 November 2005


ENQUIRIES:

Caledonia Investments plc                                   Tel: [phone]
Tim Ingram, Chief Executive
Jamie Cayzer-Colvin, Executive Director
Tony Hambro, Associate Director

India Advisory Partners Limited                             Tel: [phone]
James Winterbotham

Arbuthnot Securities Limited                                Tel: [phone]
Rupert Stevenson
Alastair Moreton

College Hill                                                Tel: [phone]
Tony Friend
Richard Pearson
Paddy Blewer



Notes to Editors


Release by India Capital Growth Fund Ltd - Intention to List on AIM



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION INTO OR IN THE UNITED STATES,
CANADA, JAPAN OR AUSTRALIA



This announcement is not an offer to sell or a solicitation of any offer to buy
the securities or warrants of India Capital Growth Fund Limited ('ICGF', such
securities, the 'Securities', and such warrants, the 'Warrants') in the United
States, Canada, Japan or Australia.



The Securities and Warrants have not been and will not be registered under the
US Securities Act of 1933, as amended (the 'Securities Act') and may not be
offered or sold in the United States unless registered under the Securities Act
or an exemption from such registration is available.  No public offering of
Securities or Warrants of ICGF is being made in the United States.



This announcement contains forward looking statements, that involve unknown
risk, uncertainties and other factors which may cause the actual results,
financial condition, performance or achievement of ICGF, or industry results to
be materially different from any future results, performance or achievements
expressed or implied by such forward looking statements.  Factors that might
cause such a difference include, but are not limited to: whether the investment
objective of ICGF will be met; the value of the Indian equity securities and
Indian equity-linked securities in which ICGF invests; changes in economic
conditions in India; and any change in ICGF's tax status, or in taxation
legislation or in the interpretation or application of taxation legislation.
ICGF disclaims any obligation to update any such forward looking statements in
this document to reflect future events or developments.



India Capital Growth Fund Limited



Intention to list on AIM



The Board of India Capital Growth Fund Limited met formally for the first time
last week and agreed to release the pathfinder admission document to launch the
Fund.



Introduction



India Capital Growth Fund Limited ('the fund' or 'ICGF') will be a new, closed
ended investment company, intended to be quoted on AIM.  It is being established
to invest predominantly in under-researched and attractively valued, small and
mid-cap listed and unlisted companies in India, with the objective of generating
strong, absolute sterling returns.



ICGF plans to raise between £75m and £100m, before expenses, by way of a placing
with institutional and other investors of ordinary shares with separately traded
warrants attached on a one for five basis.  Arbuthnot Securities Limited will
act as nominated adviser and broker to the fund.



Caledonia Investments plc ('Caledonia') has agreed to subscribe for 20% of the
ordinary shares in the fund (subject to a maximum of £15m).  It is intended that
the fund will be managed by India Investment Partners ('IIP') which will be 43%
owned by Caledonia and 57% by management.



ICGF will have a Board with considerable relevant experience, with Micky Ingall
(formerly Chairman of Rathbone Brothers) as Chairman. Other members of the Board
will be Ashok Dayal (over 38 years experience in banking in India and Asia with
Grindlays Bank and Deutsche Bank), Robert Nicholson (extensive experience in
Asia as both a lawyer and Executive Director in Asian businesses), Robert King
(manager of Northern Trust Guernsey and a specialist in the administration of
closed and open ended emerging market funds) and Jamie Cayzer-Colvin (Executive
Director of Caledonia with in depth experience of new fund management companies
and funds).



The Team



The investment advisory team has an on the ground perspective built up over a
decade in India and comprises a strong combination of fund management and
corporate finance expertise in India:



Dileep Madgavkar was Chief Investment Officer of Prudential ICICI Asset
Management.  He has over 17 years of India investment experience and was
responsible for over US$3.5bn of funds in India.  The funds managed by him
outperformed their benchmark indices over many years.



James Winterbotham and Kai Taraporevala were previously with Lazard India and
formed India Advisory Partners ('IAP') in 1998 to provide corporate finance and
investment advice.  IAP has advised blue chip international clients in India on
a range of activities from setting up businesses (greenfield and acquisitions)
to operational advice and divestitures.  IAP (India) is a private Indian
registered limited company and provides corporate finance and investment
management services.  Past clients of IAP (India) include many substantial
listed companies in the UK and elsewhere.  IAP has been retained by Caledonia as
its adviser in India since January 2004 and has been instrumental in helping
Caledonia build up a successful portfolio of direct Indian investments.



There are a further five professionals based in Mumbai who will act as a support
team and who comprise a mix of Chartered Accountants and MBAs with many years of
experience.



The Indian Market



In 2004, India's GDP was approximately US $700bn and is growing rapidly. The
Asian Development Bank estimates India's growth to be approximately 7% in 2005.
India has many positive traits: attractive demographics, a well-educated,
low-cost, English-speaking workforce, continuing export strength in manufactured
goods and resultant rising domestic demand as income per capita continues to
increase. Continued strong growth is forecast.



Target Company Focus and Investment Parameters



The fund's objective is to provide strong absolute returns by investing
predominantly in the equity capital of small and mid cap listed and unlisted
Indian companies. There are many thousands of such companies in the Indian
market and it takes skill and experience to identify those that have the
opportunity to grow rapidly in value.



The IIP team intends to visit and evaluate the many potential target companies.
It has the extensive India experience necessary to make a judgement on the
credibility and track record of the owners and managers of the companies
concerned.



ICGF is intended to hold a core of major investments and to take board seats
where appropriate.  Initial investment in any one company will not be more than
10% of assets under management and no more than 25% will be invested in unquoted
companies.  No investments will be made in start-ups and the expected minimum
size of investments will be £2m.



Company Structure



The closed ended structure is well suited to the investment philosophy and
target companies of ICGF, while the AIM listing will provide liquidity to
investors. The structure also includes a tender mechanism for the shares of ICGF
that will help manage any traded discount to NAV, should a discount occur. It is
expected that ICGF will list in the middle of December 2005.  In the initial
phase, before IIP has received appropriate authorisation from the FSA, the fund
will be managed by Polar Capital LLP.





ICGF Chairman Micky Ingall said: 'The Board has now approved release of the
Pathfinder Admission Document to launch the fund.  The team has started
discussing plans with institutions and other potential investors and we are
heartened by the response.  We believe this is a unique opportunity to invest in
the growth of medium and smaller listed companies in India and to capture
attractive returns for investors.'



29 November 2005




ENQUIRIES:

India Advisory Partners Limited                      Tel: [phone]
James Winterbotham

Caledonia Investments plc                            Tel: [phone]
Jamie Cayzer-Colvin
Tony Hambro

Arbuthnot Securities Limited                         Tel: [phone]
Rupert Stevenson
Alastair Moreton

College Hill                                         Tel: [phone]
Tony Friend
Richard Pearson
Paddy Blewer



Arbuthnot Securities is only acting for the fund and for no one else in
connection with the placing and admission to AIM and will not be responsible to
anyone other than the fund for providing the protections afforded to its clients
or for providing advice in relation to the placing and admission to AIM or any
other matter referred to in this announcement.



This announcement is not an offer to sell or a solicitation of any offer to buy
the securities or warrants of India Capital Growth Fund Limited ('ICGF', such
securities, the 'Securities', and such warrants, the 'Warrants') in the United
States, Canada, Japan or Australia.



The Securities and Warrants have not been and will not be registered under the
US Securities Act of 1933, as amended (the 'Securities Act') and may not be
offered or sold in the United States unless registered under the Securities Act
or an exemption from such registration is available.  No public offering of
Securities or Warrants of ICGF is being made in the United States.



This announcement contains forward looking statements, that involve unknown
risk, uncertainties and other factors which may cause the actual results,
financial condition, performance or achievement of ICGF, or industry results to
be materially different from any future results, performance or achievements
expressed or implied by such forward looking statements.  Factors that might
cause such a difference include, but are not limited to: whether the investment
objective of ICGF will be met; the value of the Indian equity securities and
Indian equity-linked securities in which ICGF invests; changes in economic
conditions in India; and any change in ICGF's tax status, or in taxation
legislation or in the interpretation or application of taxation legislation.
ICGF disclaims any obligation to update any such forward looking statements in
this document


                      This information is provided by RNS
            The company news service from the London Stock Exchange   D

MSCKGMZMVLNGKZG