Net Asset Value(s)

RNS Number : 5634L

India Capital Growth Fund Limited

05 September 2012

 



5 September 2012

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

Net Asset Value statement as at 31 August 2012

Net Asset Value

The Company announces its Net Asset Value per share as at 31 August 2012 was 44.94 pence.

Portfolio update

The Net Asset Value (NAV) of the Company rose 0.2% in sterling terms this month and the portfolio outperformed its notional benchmark by 0.6%. Year to date the portfolio is 8.2% ahead of the BSE Sensex Index and 4.3% ahead of BSE Midcap Index. Further marginal weakening of the Rupee against Sterling resulted in a 0.6% rise in the NAV this month in Rupee terms.

Positive contributors to the performance came from the portfolio's largest holding Jyothy Laboratories Ltd (a manufacturer of household products) which rose 26% and Prime Focus (a provider of 2D to 3D conversion solutions for film and TV) which rose 16%. The relative strength in the stock price of Prime Focus has been used as an opportunity to reduce the portfolio's exposure to this stock. Elsewhere Motherson Sumi (an auto ancillary manufacturer) rose 14%. The portfolio was finally able to exit Bilcare, a legacy position which, due to poor liquidity and disappointing operations, has dogged the restructuring process and the performance of the portfolio since early 2010. The negative attribution arose from weakness in the financial sector, in particular Indian Bank which fell 13% and Yes Bank which fell 10%. Banks as a whole are under pressure as the market rightly frets about slowing demand for credit and increased stress in the loan books, particularly in the public sector.  This month an initial holding in Dabur (a midcap consumer staples company that manufactures soaps, detergents and hair oil predominately) was initiated.

Market and economic update

On the macro front the market was buoyant initially on expectations of further monetary easing in developed markets. Domestically there are small signs that the bottom may have been reached as WPI inflation data surprised positively at 6.9% year over year versus expectations of 7.3% and Q1 FY13 (Apr - Jun) GDP data reported 5.5% growth, a fraction higher than forecast. The market gave only two cheers simply because there is some scepticism over the quality of the inflation data, and although the GDP data showed an improvement, it is still anaemic in the Indian context. Genuinely pleasing however is the sharp pick up in rainfall across India which has reduced the "monsoon deficit" to 12%, removing fears of an official drought and easing concerns of an additional fiscal burden being placed on the government. Whilst the seasonal "wet" picked up weather wise, the structural "dry" in Parliament persevered as relentless in-fighting between all political parties ensured no legislative business will be achieved in the current session. India's policy paralysis rolls on.

Portfolio analysis by sector as at 31 August 2012

Sector	No. of Companies	% of Portfolio
Financials	10	27.3%
Industrials	6	13.6%
Health Care	3	10.2%
Consumer Discretionary	4	10.0%
Consumer Staples	3	8.2%
Utilities	2	6.3%
Energy	2	5.1%
Information Technology	3	5.1%
Materials	2	4.3%
Telecommunication Services	1	1.7%
Total Equity Investment	36	91.8%
Net Cash		8.2%
Total Portfolio		100.0%

Top 10 holdings as at 31 August 2012

Holding	Sector	% of Portfolio
Jyothy Laboratories Ltd	Consumer Staples	5.3%
Federal Bank Ltd	Financials	4.7%
Cesc Ltd	Utilities	3.7%
Dish TV India Ltd	Consumer Discretionary	3.7%
Lupin Ltd	Health Care	3.5%
Divi's Laboratories Ltd	Health Care	3.4%
IPCA Laboratories Ltd	Health Care	3.3%
Kpit Cummins Infosystems Ltd	IT	3.1%
Larsen & Toubro Ltd	Industrials	3.1%
Indian Bank Ltd	Financials	3.1%

Portfolio analysis by market capitalisation size as at 31 August 2012

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR 15bn)	5	11.7%
Mid Cap (INR 15bn <M/Cap<INR 100bn)	19	52.2%
Large Cap (M/Cap > INR 100bn)	11	27.9%
Unlisted	1	0.0%
Total Equity Investment	36	91.8%
Net Cash		8.2%
Total Portfolio		100.0%

 

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