Net Asset Value Daily Estimate

RNS Number : 8982V

India Capital Growth Fund Limited

08 November 2017

 

8 November 2017

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

Net Asset Value statement at 31 October 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 October 2017 was 121.46 pence.

The Net Asset Value (NAV) was up 10.7% in Sterling terms, whilst the BSE Mid Cap TR Index was up 10.1%, delivering an out performance against the notional benchmark of 0.6%. In local currency terms, the NAV was up 8.0% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Dewan Housing Finance (up 16.9%), Ramkrishna Forgings (up 27.0%), Sobha Developers (up 30.9%) and NIIT Technologies (up 24.8%). Negative attribution came from Yes Bank (down 10.2%), Manpasand Beverages (down 6.2%) and Kajaria Ceramics (down 4.0%).

Market and economic update

India's equity markets rebounded strongly in October on the back of the Government's plan to recapitalise India's state owned banks. The BSE Sensex was up 6.2%, whilst the BSE Mid Cap TR Index was up 7.5% supported by Foreign Institutions, who were net buyers (US$296m) and Domestic Institutions who were also significant net buyers (US$1.5bn) for the month. On the currency front, INR appreciated 0.9% against USD and 2.4% against GBP in October.

The key announcement this month was the Government's US$33bn recapitalisation plan for India's state owned banks. The intention is to provide additional capital for the banks to further provision for bad loans, thereby boosting the credit cycle resolution process, and kick starting credit growth which has remained sluggish, largely due to the banks' weak capital position. Of the total commitment, US$21bn will come from the sale of recapitalisation bonds by the Government, the remaining US$12bn will be sourced via budgetary allocation and fundraising from equity markets. The Government also announced the "Mega Road Project", "Bharatmala", involving construction of more than 83,000km of roads, investing US$107bn over the next five years. This provides a medium term road map for the highway sector and is expected to create employment.

Elsewhere, India jumped into the Top 100 of the World Bank's 'Ease of Doing Business' rankings for the first time. The 2018 Report saw it move up about 30 places, driven by reforms in access to credit, power supplies and protection of minority investors.

Indian companies have begun reporting Q2 earnings which so far have been mainly in line with expectations. The telecom and cement sectors have outperformed expectations while the consumer staples, consumer discretionary, healthcare, IT and financials sectors have all reported in line, although asset quality remains weak.

Portfolio analysis by sector as at 31 October 2017
Sector	No. of Companies	% of Portfolio
Financials	8	26.6%
Materials	9	21.2%
Consumer Discretionary	8	16.9%
Industrials	4	9.4%
Consumer Staples	4	9.3%
IT	2	6.2%
Real Estate	2	3.0%
Healthcare	2	3.2%
Total Equity Investment	39	95.9%
Net Cash		4.1%
Total Portfolio	39	100.0%
Top 20 holdings as at 31 October 2017
Holding	Sector	% of Portfolio
Dewan Housing Finance	Financials	6.9%
Federal Bank	Financials	5.2%
Motherson Sumi Systems	Consumer Discretionary	4.6%
Ramkrishna Forgings	Materials	4.6%
NIIT Technologies	IT	3.5%
Jyothy Laboratories	Consumer Staples	3.5%
Yes Bank	Financials	3.4%
Kajaria Ceramics	Industrials	3.2%
Finolex Cables	Industrials	2.9%
City Union Bank	Financials	2.9%
Sobha Developers	Real Estate	2.8%
Skipper	Materials	2.7%
Tech Mahindra	IT	2.7%
Indusind Bank	Financials	2.6%
The Ramco Cements	Materials	2.5%
Sagar Cements	Materials	2.4%
PI Industries	Materials	2.4%
Manpasand Beverages	Consumer Staples	2.3%
Berger Paints India	Materials	2.2%
Balkrishna Industries	Consumer Discretionary	2.2%
Portfolio analysis by market capitalisation size as 31 October 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	26	55.4%
Mid Cap (US$2bn < M/Cap < US$7bn)	9	27.2%
Large Cap (M/Cap > US$7bn)	4	13.3%
Total Equity Investment	39	95.9%
Net Cash		4.1%
Total Portfolio	39	100.0%

 

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