Net Asset Value(s)

RNS Number : 9065A

India Capital Growth Fund Limited

05 April 2012

 



5 April 2012

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

Net Asset Value statement as at 31 March 2012

Net Asset Value

The Company announces its Net Asset Value per share as at 31 March 2012 was 45.98 pence.

Portfolio update

In March 2012 the Net Asset Value (NAV) of India Capital Growth Fund Limited decreased 5.6% in Sterling terms driven by a 0.9% decline in the underlying value of the portfolio and a 4.9% deprecation of Rupee against Sterling. This can be compared to a 2.0% decline in the Sensex and a 0.6% decline in the BSE Midcap Index in local currency terms.

The healthcare and industrial sectors contributed to the positive performances of the portfolio this month. Lupin (a manufacturer of branded generics) rose 10.1%, whilst GlaxoSmithKline (a manufacturer of pharmaceutical drugs) rose 11.6%. The performance in the industrial space was driven by Eicher Motors (a manufacturer of light commercial vehicles) which rallied 14.7%. Other stocks which contributed to the positive performances included Sobha Developers (real estate development) up 17.3%, and Dish TV (a provider of Satellite TV subscription services) which rose 17.8%.

The main contribution to the negative performances in the portfolio arose from Manappuram Finance (a non-banking financial company), which fell 26.7%, Prime Focus (2D to 3D conversion and visual effects service provider), which dropped 20.3% and Jyothy Labs (manufacturer of household products) which fell 18.0%. In Manappuram's case, the stock price came under pressure as the Reserve Bank of India (RBI) announced tighter regulation in the sector which is expected to lower income and margins in the business. However, the move overall is positive for the financial health of the sector and now that the bad news is out of the way, we believe investor confidence will slowly start to return to the stock.

Mid-month saw the Budget, which forecast GDP growth of 7.6% for FY13 and a reduction in the fiscal deficit target from 5.8% to 5.1%. Both forecasts target an improvement on last year and although they are credible, given continued global uncertainties and a slowing domestic economy, the market remains sanguine on the government's ability to achieve these numbers.

Overall the Budget has left a bad taste in the mouth of most foreign investors. The move by the government to override a recent Supreme Court judgment not to tax Vodafone on its acquisition of Indian assets through an offshore vehicle has cast a shadow of doubt and concern over the government's ability to create a transparent and consistent environment for both foreign direct and portfolio investment into the country. The outcome is still not clear and the market waits nervously for the next announcement. Against this backdrop Foreign Institutional Investor (FII) money continued to inflow, although March saw a slowdown to USD1.7bn, bringing the year to date net inflow to USD8.8bn, still a sizeable figure. Domestic participants continue to sell, withdrawing USD280m this month making an overall outflow for the year to date of USD1.1bn.

Portfolio analysis by sector as at 31 March 2012

Sector	No. of Companies	% of Portfolio
Financials	10	25.6%
Industrials	6	15.1%
Health Care	5	9.8%
Consumer Discretionary	3	8.2%
Materials	4	7.5%
Energy	2	6.4%
IT	3	5.6%
Consumer Staples	2	5.0%
Utilities	1	3.5%
Total Equity Investment	36	86.7%
Net Cash		13.3%
Total Portfolio		100.0%

Top 10 holdings as at 31 March 2012

Holding	Sector	% of Portfolio
Federal Bank	Financials	4.2%
Cairn India	Energy	4.1%
Dish TV India	Consumer Discretionary	3.8%
Jain Irrigation Systems	Industrials	3.6%
CESC	Utility	3.5%
Indian Bank	Financials	3.4%
Lupin	Health Care	3.3%
Larsen & Toubro	Industrials	3.2%
KPIT Cummins Infosystems	IT	3.2%
Sobha Developers	Financials	3.1%

Portfolio analysis by market capitalisation size as at 31 March 2012

Market capitalisation size	No. of Companies		% of Portfolio
Small Cap (M/Cap <INR 15bn)	6		12.4%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	19		47.1%
Large Cap (M/Cap > INR 100bn)	10		27.2%
Unlisted	1		0.0%
Total Equity Investment	36		86.7%
Net Cash			13.3%
Total Portfolio			100.0%

 

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