Net Asset Value(s)

RNS Number : 4498S

India Capital Growth Fund Limited

07 November 2013

 



7 November 2013

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

Net Asset Value statement as at 31 October 2013

Net Asset Value

The Company announces its Net Asset Value per share as at 31 October 2013 was 44.65 pence.

In October the Net Asset Value (NAV) was up 14.6% in Sterling terms, whilst the BSE Mid Cap Index was up 12.4%, delivering an outperformance against the notional benchmark of 2.2% in Sterling terms. Against Ocean Dial's Composite Index, the portfolio also delivered an outperformance of 2.2%.

Portfolio update

Positive contributors to the portfolio's performance came from Federal Bank (up 44.2%), Dewan Housing (up 46.8%) and Yes Bank (up 28.3%). Negative attribution came from IPCA Labs (down 4.1%), Max India (down 1.5%) and Kajaria Ceramics (down 1.0%).

Market and economic update

In October, equity markets continued to remain buoyant with the Sensex up 9.2%, making an all-time high, and the BSE Mid Cap Index up 8.9%, both in INR terms. Equity buying was largely driven by FII inflows which netted USD2.5bn for the month.

On monetary policy, the RBI continued to roll back the emergency tightening measures introduced in July after the collapse in the Rupee. With the currency showing stability, the Marginal Standing Facility (MSF) rate was cut by 50 bps in the first week of October and by another 25bps at the end of the month to bring it down to 8.75%.

In the RBI's Quarterly Review the Governor, Dr Rajan, stressed that managing inflation was his primary concern. Indeed, both September WPI inflation at 6.5% and CPI inflation at 9.8%, came in higher than consensus. As was largely expected as a result of the Review, the RBI raised the repo rate by 25bps to 7.75%. The Governor indicated that the interest rate stance is consistent with the current projections of the RBI's GDP growth forecast of 5% for this fiscal year. Alongside lowering the MSF rate, in order to infuse short term liquidity into the system, the RBI increased the amount available under the 7-day and 14-day term repos from 0.25% to 0.5% of net demand and time liabilities (NDTL).

On a wider macro level, if growth continues to disappoint from current levels, the RBI will be less inclined to raise rates given that deflationary forces would be heightened. On a positive note, the Rupee appreciated against the Sterling by 3.1% over the month on the back of the news that the September trade deficit contracted further to USD6.8bn for the fourth consecutive month. In the wake of the US Fed's tapering announcement in May, the data shows the Government's measures to bring the current account deficit down to a manageable level are starting to show results. At a corporate level, the Q2FY14 earnings reported so far have had more positive surprises than negative. IT services companies were the main outperformers and Banks have reported better than expected asset quality.

Portfolio analysis by sector as at 31 October 2013

Sector	No. of Companies	% of Portfolio
Financials	10	23.3%
Industrials	6	15.2%
Consumer Discretionary	4	13.4%
Consumer Staples	3	11.1%
IT	4	9.9%
Healthcare	3	9.9%
Energy	2	4.5%
Materials	1	2.2%
Telecommunications	1	3.8%
Total Equity Investment		93.3%
Net Cash		6.7%
Total Portfolio		100.0%

Top 20 holdings as at 31 October 2013

Holding	Sector	% of Portfolio
Jyothy Laboratories	Consumer Staples	5.9%
KPIT Cummins Infosystems	IT	5.0%
Federal Bank	Financials	4.7%
Lupin	Healthcare	4.2%
Motherson Sumi Systems	Consumer Discretionary	4.0%
Idea Cellular	Telecommunications	3.8%
Kajaria Ceramics	Consumer Discretionary	3.7%
Jammu & Kashmir Bank	Financials	3.5%
Eicher Motors	Industrials	3.4%
Emami	Consumer Staples	3.2%
IPCA Laboratories	Healthcare	3.2%
Larsen & Toubro	Industrials	3.1%
Yes Bank	Financials	3.0%
Indusind Bank	Financials	3.0%
Dish TV India	Consumer Discretionary	2.9%
Berger Paints India	Consumer Discretionary	2.8%
NIIT Technologies	IT	2.7%
Dewan Housing Finance Corp	Financials	2.6%
Divi's Laboratories	Healthcare	2.6%
Max India	Industrials	2.5%

Portfolio analysis by market capitalisation size as at 31 October 2013

Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR15bn)	3	3.8%
Mid Cap (INR15bn <M/Cap<INR100bn)	18	52.4%
Large Cap (M/Cap > INR100bn)	12	37.1%
Unlisted	1	0.0%
Total Equity Investment	34	93.3%
Net Cash		6.7%
Total Portfolio	34	100.0%

 

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