Net Asset Value Daily Estimate

RNS Number : 8553G

India Capital Growth Fund Limited

06 March 2018

 

6 March 2018

India Capital Growth Fund Limited (the "Company" or "ICGF")

Net Asset Value statement at 28 February 2018

Net Asset Value

The Company announces its Net Asset Value (NAV) per share as at 28 February 2018 was 113.50 pence.

In February the NAV was down 5.0% in Sterling terms, whilst the BSE Mid Cap TR Index was down 4.6%, delivering an under performance against the notional benchmark of 0.4%. In local currency terms, the NAV was down 4.8% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from City Union Bank (up 10.1%), JK Lakshmi (up 3.2%) and Manpasand Beverages (up 0.6%). Negative attribution came from Motherson Sumi Systems (down 9.8%), Jain Irrigation (down 16.4%) and Dewan Housing Finance (down 6.2%).

Market and economic update

India's equity markets weakened during the month with the BSE Sensex down 5.0% and BSE Mid Cap TR Index down 4.5%, partially due to fears over the repercussions of the US$1.9bn fraud at Punjab National Bank and also over tighter provisioning requirements for banks to address impaired corporate loans. Foreign Institutions were net sellers (US$1.9bn for the month) whilst Domestic Institutions were net buyers (US$2.7bn for the month). The Rupee depreciated 2.5% against US Dollar and 0.1% against Sterling in the month.

GDP growth for the quarter ended December 2017 grew by 7.2% yoy compared to 6.5% in the previous quarter. The improvement in GDP growth was broad based with all three segments contributing; Agriculture up 4.1%, Industry up 6.8% and Services up 7.7%, which marks a turnaround in the country's economic growth momentum. The other positive economic news in the month was the uptick in capital expenditure (Gross Fixed Capital Formation) which rose 12% yoy from 7% in the previous quarter. This was partly driven by higher infrastructure and construction spending by the Government, but also by a positive base effect on account of demonetisation in the same quarter last year.

In the monetary policy meeting the Reserve Bank of India (RBI) left the benchmark repo rate unchanged at 6.0% and the policy stance neutral. However the RBI raised inflation estimates on the back of rising commodity prices, especially crude, the Government's proposal to increase Minimum Support Prices for Monsoon crops and the impact of fiscal slippage. CPI inflation for H1 FY19 is now estimated at 5.1% to 5.6% and for H2 FY19 at 4.5% to 4.6%. Bond yields continued to rise to 7.8%, up 30bps on fiscal and inflation pressures.

Portfolio analysis by sector as at 28 February 2018
Sector	No. of Companies	% of Portfolio
Financials	8	24.3%
Materials	8	21.1%
Consumer Discretionary	8	17.4%
Industrials	4	9.6%
Consumer Staples	4	9.2%
IT	2	7.9%
Real Estate	2	3.2%
Healthcare	2	3.1%
Total Equity Investment	38	95.7%
Net Cash		4.3%
Total Portfolio	38	100.0%
Top 20 holdings as at 28 February 2018
Holding	Sector	% of Portfolio
Dewan Housing Finance	Financials	5.4%
NIIT Technologies	IT	4.4%
Ramkrishna Forgings	Materials	4.3%
Motherson Sumi Systems	Consumer Discretionary	4.2%
Federal Bank	Financials	4.1%
Tech Mahindra	IT	3.5%
City Union Bank	Financials	3.1%
Jyothy Laboratories	Consumer Staples	3.1%
Finolex Cables	Industrials	3.1%
Sobha Developers	Real Estate	2.9%
Capital First	Financials	2.9%
Balkrishna Industries	Consumer Discretionary	2.9%
Sagar Cements	Materials	2.8%
Indusind Bank	Financials	2.8%
Kajaria Ceramics	Industrials	2.7%
Skipper	Materials	2.7%
The Ramco Cements	Materials	2.7%
PI Industries	Materials	2.6%
Welspun India	Consumer Discretionary	2.3%
Radico Khaitan	Consumer Staples	2.3%
Portfolio analysis by market capitalisation size as at 28 February 2018
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	25	57.9%
Mid Cap (US$2bn < M/Cap < US$7bn)	9	25.5%
Large Cap (M/Cap > US$7bn)	4	12.4%
Total Equity Investment	38	95.7%
Net Cash		4.3%
Total Portfolio	38	100.0%

 

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