Half Yearly Report

RNS Number : 1709O

India Capital Growth Fund Limited

13 September 2011

 



13 September 2011

INDIA CAPITAL GROWTH FUND LIMITED

INTERIM RESULTS FOR THE PERIOD FROM 1 JANUARY 2011 TO 30 JUNE 2011

CHAIRMAN'S STATEMENT

The year 2011 so far has, to say the least, been an eventful one for investors, and this is particularly so for investors in India. The year started with the Indian market reacting to the corruption scandals affecting politicians and businessmen and to the threat of increasing inflation. Both knocked investor confidence, and foreign investors started withdrawing capital from the Indian market. The political unrest in North Africa and the Middle East then created further uncertainty, and this was followed by worries over the financial stability of certain European countries and the downgrading of the credit status of the USA. With its domestic dominated economy and established democratic process these external events should serve to strengthen the investment case for India. However, a combination of fears over continuing impact of inflation and a lack of real progress in getting infrastructure development moving continues to hold markets back. At the same time, international investors are becoming increasingly risk averse and are tending to transfer investments from the (perceived riskier) emerging markets to their (at least known) domestic markets.

It is against that background that we have seen a fall in the net asset value of the Company of 19 per cent in the six month period, with a 15.9 per cent decline in Rupee terms exacerbated by a 3.9 per cent fall in the value of the Rupee against Sterling. After a solid year of progress in 2010, this is disappointing, not least since the portfolio underperformed the BSE Midcap index by three percentage points. The portfolio restructuring initiated in 2010 is largely complete, but there remain a small number of investments which significantly influence the portfolio performance, and it is these that have been the major contributors to the underperformance. The size of these holdings has been gradually reduced, but there is still further work to be done.

One of the major thrusts of the restructuring of the portfolio has been to improve the underlying liquidity. In this context, having an unlisted investment as the largest single holding has been something of an anomaly. Although completed after the period end, our holding in Marwadi Shares and Finance Limited, a Gujarat based stockbroker, has now been sold in full and the proceeds are being reinvested in the listed market. The purchaser was a subsidiary of Caledonia Investments PLC, which already held a parallel stake in the company. As this was a related party transaction the price was based on an independent appraisal of value commissioned jointly by the parties, and the independent directors, having consulted the nominated advisor, are satisfied that the terms were fair and reasonable as regards shareholders in India Capital Growth Fund Limited.

Also since the period end there have been some changes in the composition of the Board. Robin Nicholson had been a director of the Company since its launch in 2005 and acted as Chairman for a period in 2009 after the tragic death of my predecessor, Micky Ingall. Increasing pressures from other commitments had become such that it had become difficult to give the necessary attention to the Company, and he felt it right to resign. The Board is most grateful to him for his service over the years. The Board has appointed Peter Niven to replace him. Peter is a resident of Guernsey with a successful career in banking behind him from which he retired in 2004. Since then he has acted as Chief Executive of Guernsey Finance, promoting the island as a financial services destination. He serves on the boards of a number of listed companies and investment funds including Resolution Limited, the FTSE 100 insurance and financial services company. Peter has been appointed as Chairman of the Audit Committee of the Company.

The major advantage of a closed-ended structure is that the Company can ride out turmoil in the markets (however caused) without being forced to sell assets at distressed prices. We remain firmly of the view that India remains an attractive area for investment. Although its growth rate has slowed somewhat recently it remains at above 7 per cent in real terms - a far cry from the near zero rates in much of the western world. Its economy is predominantly domestic focussed, and is thus not dependent on exports requiring booming economies elsewhere in the world. Perhaps most importantly, it has control over its own fiscal and monetary policies.

Uncertainty will inevitably continue for the time being, based more on external than internal events. If the government can push forward on getting infrastructure development moving, and inflation can be brought back under control (and a good monsoon will help in this regard) the medium-term outlook remains positive.

Fred Carr

Chairman

13 September 2011

SUMMARY INVESTMENT MANAGER'S REPORT

Economic Update

The economic climate in India during the first half of the year has been tough but some positives are starting to emerge. The predominant factor remains the disappointing performance of inflation which has shown no sign of easing to the extent that was expected. The upward revisions to previously reported data are also adding to the now seemingly entrenched view that a higher level of inflation is here to stay. The thinking behind this is that the dynamic driving the inflation "miss" has shifted from a supply side phenomenon, caused by structural and cyclical issues (mainly food), to a demand side problem which can only be solved in the short term by slower economic growth. The recent rise in fuel and cooking gas prices, whilst a positive development for the fiscal burden, will have a pass through effect which will keep inflation at "elevated" levels in the months ahead.

The Reserve Bank of India as good as acknowledged this by switching its strategy away from raising the reverse repo rate in "baby steps" of 25 basis points at a time to a surprise 50 basis point increase in early April, stating publicly that they were committed to "bringing down inflation at the cost of growth." This was followed up in June with a further 25 basis point increase taking the benchmark rate to 7.5 per cent. We expect 50 - 75 basis points of further increases this financial year. Negative news on the inflation front has been relentless for over a year now but we are starting to believe there could be positive surprises in the months ahead. The "base effect" (India measures inflation on a point to point basis rather than a moving average basis) will create the effect of cooling inflation. Food prices are already moderating and a good monsoon will ease supply constraints. India is also a beneficiary of cooling global oil and commodity prices. The recent announcement of a decision to release oil from the strategic reserve, the end of QE2 and softer PMI data across the world, are all reasons to suggest the tide maybe moving back in India's favour in this regard.

What is yet unknown is the extent of the lag effects of 325 basis points of collective tightening since early 2010. GDP growth of 7.8 per cent was reported for the quarter ended 31 March 2011, down from a peak of 9.4 per cent and below the expected figure of 8.1 per cent.

There is clear evidence of a slowdown both in private sector investment and public spending. The June 2011 seasonally adjusted HSBC Purchasing Managers' Index data, whilst still showing expansionary mode, has shown a further decline in the rate of growth. The consumer is also starting to retrench, though not meaningfully. Consumer spending has certainly become sensitive to higher interest rates particularly for higher value purchases such as cars and two wheelers. Banks have seen a marked slowdown in loan demand in this sector and we now expect auto sales growth at 10-12 per cent rather than 18-20 per cent. We see this not so much as a consequence of an income squeeze or a leverage problem, but more the tendency of the Indian consumer to be highly sensitive to interest costs. Wages have, in general, been keeping pace with inflation and more so in some cases. However, consumers in India tend to delay a purchase decision if they believe the servicing costs are likely to be lower if the purchase is deferred. Once again therefore the key to more sustained performance from the market will be conviction that inflation has peaked and interest rates can stop rising.

The reasons for the slowdown are well documented. Political paralysis has thwarted project approval of both public and private sector projects, whilst rising interest costs are altering the equity IRRs and making projects financially unviable. Herein lies the real challenge for India, as a failure to deliver on infrastructure reform will condemn the economy longer term to higher levels of inflation which in turn will cause a permanent market de-rating. We are decidedly not of this view and are starting to believe that "the fear that nothing will ever be done" appears over exaggerated. The government has no choice but to try and implement change in order to meet the aspirations of a rapidly changing society. If it fails it can kiss goodbye to winning the 2014 election.

There are also some encouraging signs that the situation is improving. After an agonisingly painful eleven month wait, the government's approval of the Cairn-Vedanta deal has finally arrived, subject to final shareholder agreement. The outcome of this has been watched very closely by global companies contemplating capital investment into India. While no one can accuse politicians in India of rushing through a decision, compromises were necessary on both sides to secure a deal. Equally, the hugely unpopular decision to raise fuel and cooking oil prices to the average Indian was a much needed decision the government did not duck. In addition Jairam Ramesh, the environment minister, has backed off earlier diktats to stifle coal production and has granted environmental clearance for nine new coal mines with a further six expected.

The ruling alliance's (UPA) 3-2 win in the State elections puts the Opposition firmly on the back foot, and it is they who have been the major stumbling block to reform. It has also put Congress back in the driving seat with its so called "allies". The result is by no means a sign of support for the UPA, rather more a message that they need to deliver on reform or suffer the consequences as has been the case in West Bengal. With regard to ongoing concerns about corruption, the large number of young people entering the workforce is not only boosting economic growth but is also starting a groundswell demanding change from the political leadership and an end to corruption in high places. The recent jailing of the ex-Chief Minister of Tamil Nadu's daughter is an unprecedented event that must surely send a message to politicians and businessmen alike. The deluge of scandals is only likely to move off the radar if they heed the warnings.

Our belief is that there will be a recovery in government spending and private sector capital expenditure in the second half of the calendar year 2011, which alongside a resilient consumer should ensure a recovery in sentiment, a "bottoming" of earnings downgrades and a recovery in liquidity. A good monsoon (which has now started) is critical to the view that consumption, particularly in rural areas, will be sustained. Should this continue to be accompanied by weaker commodity and oil prices as a result of broader issues, it would be a specific boon for India.

Recent quarterly numbers for the infrastructure sector have been disappointing but conversely we are picking up indications that the order books of these companies are beginning to look up, albeit selectively. A pick up in investment spending is essential to the bullish investment case for India. Medium to longer term, the problem of "inflationary growth" will only be solved by developing the country's infrastructure in a way that allows a "productive growth" without causing such pressure on costs through the lack of available resources.

Performance 

The Company's NAV fell by 19.1 per cent in Sterling terms in the six month period, with an underlying decline in the portfolio in Rupee terms of 15.95 per cent after a 3.9 per cent decline in the value of the Rupee against Sterling. This compared to a fall in the BSE Midcap index (in INR terms) of 12.2 per cent. Once again, it was the portfolio heavyweights that contributed most to the underperformance. S Kumars Nationwide was down 38 per cent in the period. On a fundamental level the business has been doing well as seen from recent quarterly numbers, but the share price has suffered as two announced initiatives to unlock value (the proposed IPO of the Reid and Taylor subsidiary and the proposal to bring private equity investment into the Belmonte subsidiary) have been deferred. While the holding in the company has been reduced by almost 30 per cent over the period its average weighting in the portfolio in the period was 6 per cent. Bilcare (5 per cent average weighting for the period) was also down 38 per cent in the period. This was due primarily to the unsatisfactory performance of the recently acquired plastic film-making unit of petrochemical company INEOS (in Germany). In addition, the consolidated operating margin fell sharply as a result of the increased prices of crude oil based raw materials which the company was unable immediately to pass on to its customers. The share price of Prime Focus (7.5 per cent average weighting for the period) has been particularly volatile. The Company has in the last six months posted very strong results on the back of increasing revenue contribution from 2D to 3D conversion orders. The share price declined by some 19 per cent in the period, but bounced back sharply in July 2011. The holding was reduced by just over 10 per cent in the period, and top-slicing continues.

Elsewhere within the portfolio, positive contribution during the period came from the energy, telecom and information technology sectors while the industrials, consumer discretionary, healthcare and financials sectors contributed negatively. The cash position, together with the unlisted component of the portfolio for which the valuations were unchanged, averaged 16 per cent over the period and this to some extent cushioned the Company from the overall decline in midcap stocks.

In the energy sector, Cairn India performed well on the back of the open offer by Sesa Goa (part of the Vedanta group) for 20 per cent of the total share capital. We sold out of the stock in May post the open offer at a 6 per cent profit over cost. Hindustan Petroleum Corporation, an oil marketing company, benefitted from the hike in diesel, kerosene and cooking gas prices by the government. Here also we disposed of our holding in June post the price change at an 8 per cent profit over cost. In the telecom sector Bharti Airtel (1.9 per cent average weighting for the period) was up 10 per cent on the back of improving business outlook both in India and Africa. In information technology, KPIT Cummins (2.2 per cent average weighting for the period) was up 19.6 per cent on account of good earnings growth and improved orders from its key customer, Cummins. KPIT derives over 65 per cent of its earnings from enterprise solutions for manufacturing clients. The full integration effect of the acquisition of In2Soft and CPG Solutions added to the healthy revenue performance. KPIT has guided for a healthy growth of around 25 per cent in revenue and profits for the financial year to 31 March 2012 and appears likely to achieve this.

In other areas of the economy, the portfolio benefitted from Yes Bank, a private sector bank, which outperformed as it has managed to control pressure on its margins even though interest rates have been rising. Also, unlike the public sector banks, Yes Bank has not faced any negative pressure on its earnings because of its asset quality or employee expenses (pension and gratuity). Indusind Bank, a medium sized public sector bank, up 8 per cent since the stake was acquired, has been consistently delivering on various key parameters including growth, margins and asset quality. Unlike its peers in the public sector, the bank has maintained healthy earnings and asset quality. The management seems to be on track to achieve its growth and profitability targets for the current financial year. In the healthcare sector, Opto Circuits performed well and was up 11.3 per cent on good performance in various business segments (invasive and non-invasive medical devices) and better cost management at Cardiac Science (a USA subsidiary, acquired in 2010) as evidenced by the quarterly results.

The area of the portfolio which continued to disappoint was the industrial sector.

Hindustan Dorr Oliver was down 56 per cent, IVRCL down 46 per cent and Jyoti Structures down 36 per cent. Continued high inflation in India has compelled the central bank to increase interest rates which is making new projects unviable and hence reducing the flow of new orders for the infrastructure companies. In addition to this, a lack of liquidity and the higher cost of funding working capital is causing customers to defer or slow the pace of ongoing projects. The infrastructure sector in India as a whole has suffered a market de-rating on the back of the decline in near term revenues and profitability and medium term order book growth.  

We continue to stay invested in this sector as we believe that the sector has been oversold with Hindustan Dorr Oliver trading at a one year forward PE of 5.5x, IVRCL 7.3x and Jyoti Structures at 5.0x based on the Bloomberg consensus estimates. Infrastructure development is one of the most interesting structural themes in India and even though the government has delayed its spending there is no way for them to escape spending going forward if India's GDP has to grow above 8 per cent. We believe that the situation will improve in the near future, and the government will start to award an increasing number of new orders providing the necessary fillip to the sector.

Conclusion

Inflation continues to have a negative impact on India but the Reserve Bank of India is sailing the correct course and tackling it head on. The recent, aggressive rate rises can be seen as a significant positive but their lag effect has not really been felt as yet. The fact that India is in total control of its monetary policy and is not concerned about an appreciating Rupee (it is not dependent on competitive exports) gives it the flexibility in its own destiny that many other Asian and European economies crave. Inflation could well trend down as monetary policy is starting to reduce demand driven inflation whilst a good monsoon is helping to reduce supply side. Added to this commodity prices are declining which should also help. In short it is our view that the outlook for inflation is trending positive.

Political paralysis has put the dampeners on infrastructure reform that is so dearly needed but the 2014 election brings the need for change to the forefront of the politicians minds and the ruling alliance's win in the State elections puts them in the driving seat to push through projects. The mood is positive, international joint ventures are being signed and the paralysis is slowly ebbing away. Political leaders are also starting to tackle corruption as demanded by the populous/international investors and an example is being made of those who abuse their position. This can only be good for the markets and India's standing as a nation.

The insatiable appetite for consumption, driven by the booming and growing workforce, in addition to rebounding government spending and private sector capital expenditure in an environment where monetary policy is close to the top of its interest rate cycle, gives us great food for thought. It is a very positive environment in which to be investing. This coupled with anaemic growth in the West, companies' order books improving, reasonable valuations and the mid-caps trading at a significant discount to large-caps puts the Company in a strong position moving forwards.

Investors are in "risk-off" mode at the moment, but India will become very attractive again when "risk-on" is back in vogue. When this happens, those who are already invested will have first mover advantage and in the meantime can be comforted by very sound social, political and economic drivers backed up by sensible valuations.

India Investment Partners Limited

13 September 2011

INVESTING POLICY

The Group's investment objective is to provide long-term capital appreciation by investing (directly and indirectly) in companies based in India. The investment policy permits the Group to make investments in a range of Indian equity and equity linked securities and predominantly in listed mid and small cap Indian companies with a smaller proportion in unlisted Indian companies. Investment may also be made in large-cap listed Indian companies and in companies incorporated outside India which have significant operations or markets in India. While the principal focus is on investment in listed or unlisted equity securities or equity linked securities, the Group has the flexibility to invest in bonds (including non-investment grade bonds), convertibles and other types of securities. The Group may, for the purposes of hedging and investing, use derivative instruments such as financial futures, options and warrants. The Group may, from time to time, use borrowings to provide short-term liquidity and, if the Directors deem it prudent, for longer term purposes. The Directors intend to restrict borrowings on a longer term basis to a maximum amount equal to 25 per cent of the net assets of the Group at the time of the drawdown. It is the Group's declared policy not to hedge the exposure to the Indian Rupee.

PRINCIPAL GROUP INVESTMENTS

AS AT 30 JUNE 2011
HOLDING	TYPE	SECTOR	VALUE £000'S	% of PORTFOLIO
Marwadi Shares and Finance Limited	Unlisted	Financials	4,458	9.93
Prime Focus Limited	Small Cap	Consumer discretionary	3,087	6.88
United Phosphorus Limited	Mid Cap	Materials	1,892	4.22
Bilcare Limited	Small Cap	Healthcare	1,889	4.21
S Kumars Nationwide Limited	Mid Cap	Consumer discretionary	1,822	4.06
Sintex Industries Limited	Mid Cap	Industrials	1,684	3.75
Jain Irrigation Systems Limited	Mid Cap	Industrials	1,468	3.27
Federal Bank	Mid Cap	Financials	1,428	3.18
Yes Bank Limited	Large Cap	Financials	1,336	2.98
Indian Bank	Mid Cap	Financials	1,276	2.85
Total top 10 equity investments			20,340	45.33
Other Small Cap (9 companies)			6,010	13.39
Other Mid Cap (15 companies)			12,152	27.08
Other Large Cap (4 companies)			2,949	6.57
Other Unlisted (1 company)			-	-
Total equity investments			41,451	92.37
Cash less other net current liabilities			3,422	7.63
Total Portfolio			44,873	100.00

Large Cap comprises companies with a market capitalisation above INR 100 billion (£1.4 billion)

Mid Cap comprises companies with a market capitalisation between INR 15 billion and INR 100 billion (£215 million - £1.4 billion)

Small Cap comprises companies with a market capitalisation below INR 15 billion (£215 million)

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS TO 30 JUNE 2011

						Unaudited	Unaudited	Audited
						Six months to	Six months to	Year to
						30.06.11	30.06.10	31.12.10
				Revenue £000	Capital £000	Total £000	Total £000	Total £000
Income
Interest income				-	-	-	-	1
Investment income				152	-	152	68	232
				152	-	152	68	233
Net (losses)/gains on financial assets at fair value through profit or loss
Market movements				-	(8,055)	(8,055)	2,653	7,180
Foreign exchange movements				-	(1,892)	(1,892)	4,457	4,838
				-	(9,947)	(9,947)	7,110	12,018
Total (expense)/income				152	(9,947)	(9,795)	7,178	12,251
Expenses
Management fee				(333)	-	(333)	(369)	(787)
Cost of acquisition and disposal of investments				-	(97)	(97)	(147)	(277)
Foreign exchange (losses)/gains				(86)	(2)	(88)	(22)	39
Other expenses				(258)	-	(258)	(244)	(469)
Total expenses				(677)	(99)	(776)	(782)	(1,494)
(Loss)/profit for the period/year before taxation				(525)	(10,046)	(10,571)	6,396	10,757
Taxation				-	-	-	3	-
(Loss)/profit for the period/year after taxation				(525)	(10,046)	(10,571)	6,399	10,757
(Loss)/earnings per Ordinary Share (pence)						(14.09)	8.53	14.34

The total column of this statement represents the Group's statement of comprehensive income, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

The profit after tax is the "total comprehensive income" as defined by IAS 1. There is no other comprehensive income as defined by IFRS.

All the items in the above statement derive from continuing operations.

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS TO 30 JUNE 2011

							Other Distributable Reserve £000
			Share Capital £000	Capital Reserve		Revenue Reserve £000
				Realised £000	Unrealised £000			Total   £000
Balance as at 1 January 2011			750	(19,312)	4,027	(2,899)	72,878	55,444
Loss on investments			-	(1,956)	(6,099)	-	-	(8,055)
Revenue loss for the period after taxation (excluding foreign
exchange losses)			-	-	-	(525)	-	(525)
Cost of acquisition and disposal of investments			-	(49)	(48)	-	-	(97)
Loss on foreign currency			-	(240)	(1,654)	-	-	(1,894)
Balance as at 30 June 2011			750	(21,557)	(3,774)	(3,424)	72,878	44,873

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS TO 30 JUNE 2010

											Other Distributable Reserve £000
					Share Capital £000	Capital Reserve				Revenue Reserve £000
						Realised £000		Unrealised £000				Total   £000
Balance as at 1 January 2010					750	(13,187)		(13,818)		(1,936)	72,877	44,686
Issue of ordinary shares					-	-		-		-	1	1
(Loss)/gain on investments					-	(9,435)		12,088		-	-	2,653
Revenue loss for the period after taxation
(excluding foreign exchange losses)					-	-		-		(534)	-	(534)
Cost of acquisition and disposal of investments					-	(62)		(85)		-	-	(147)
Gain/(loss) on foreign currency				-			5,440		(1,013)	-	-	4,427
Balance as at 30 June 2010					750	(17,244)		(2,828)		(2,470)	72,878	51,086

AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2010

							Other Distributable Reserve £000
			Share Capital £000	Capital Reserve		Revenue Reserve £000
				Realised £000	Unrealised £000			Total   £000
Balance as at 1 January 2010			750	(13,187)	(13,818)	(1,936)	72,877	44,686
Issue of ordinary shares			-	-	-	-	1	1
(Loss)/gain on investments			-	(12,826)	20,006	-	-	7,180
Revenue loss for the year after taxation (excluding foreign
exchange losses)			-	-	-	(963)	-	(963)
Cost of acquisition and disposal of investments			-	(119)	(158)	-	-	(277)
Gain/(loss) on foreign currency			-	6,820	(2,003)	-	-	4,817
Balance as at 31 December 2010			750	(19,312)	4,027	(2,899)	72,878	55,444

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011

			Unaudited		Unaudited		Audited
			30.06.11		30.06.10		31.12.10
			£000		£000		£000
Non-current assets
Financial assets designated at fair value through profit or loss			41,451		46,733		52,172
Current assets
Cash and cash equivalents			3,804		4,131		3,429
Receivables			927		381		10
			4,731		4,512		3,439
Current liabilities
Payables			(1,309)		(159)		(167)
Net current assets			3,422		4,353		3,272
Total assets less current liabilities			44,873		51,086		55,444
Equity
Ordinary share capital			750		750		750
Reserves			44,123		50,336		54,694
Total equity			44,873		51,086		55,444
Number of Ordinary Shares in issue			75,001,463		75,001,463		75,001,463
Net Asset Value per Ordinary Share (pence)			59.83		68.11		73.92

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS TO 30 JUNE 2011

				Unaudited		Unaudited		Audited
				Six months to		Six months to		Year to
				30.06.11		30.06.10		31.12.10
				£000		£000		£000
Cash flows from operating activities
Investment income				27		45		232
Bank interest				-		-		1
Management fee				(349)		(363)		(773)
Other cash payments				(288)		(291)		(488)
Net cash outflow from operating activities				(610)		(609)		(1,028)
Cash flows from investing activities
Purchase of investments				(11,281)		(27,351)		(46,617)
Sale of investments				12,449		30,795		49,856
Transaction charges relating to the purchase and sale of investments				(97)		(147)		(277)
Net cash inflow from investing activities				1,071		3,297		2,962
Cash flows from financing activities
Proceeds from issue of shares				-		1		1
Net cash inflow from financing activities				-		1		1
Net increase in cash and
cash equivalents during the period/year				461		2,689		1,935
Cash and cash equivalents at the start of the period/year				3,429		1,434		1,434
Exchange (losses)/gains on cash and cash equivalents				(86)		8		60
Cash and cash equivalents at the end of the period/year				3,804		4,131		3,429

This announcement was approved by the Board on 13 September 2011. It is not the Company's interim accounts, but has been prepared on the same basis as those accounts.

The full Interim Report together with the unaudited accounts for the period is expected to be mailed to shareholders on 22 September 2011 and a copy will be posted on the Company's website www.indiacapitalgrowth.com in accordance with AIM Rule 26.

Disclaimer: Neither the contents of the Company's website, nor the contents of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

Enquiries:

India Capital Growth Fund Limited

Northern Trust International Fund Administration Services (Guernsey) Limited (Secretary)

Andrew Maiden              01481 745368

India Investment Partners Limited (Manager)

David Brunner                  020 7802 8907

Grant Thornton UK LLP (NOMAD)

Philip Secrett                   020 7728 2578

Numis Securities Limited (Broker)

Hugh Jonathan               020 7260 1263

Nathan Brown                020 7260 1426

 

END

 

 

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