Net Asset Value(s)

RNS Number : 1852X

India Capital Growth Fund Limited

08 January 2014

 



8 January 2014

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

Net Asset Value statement as at 31 December 2013

Net Asset Value

The Company announces its Net Asset Value per share as at 31 December 2013 was 46.47 pence.

In December the Net Asset Value (NAV) rose 4.9% in Sterling terms, whilst the BSE Mid Cap Index was up 6.1%, delivering an underperformance against the notional benchmark of 1.2%. Against Ocean Dial's Composite Index, the portfolio was flat. In local currency terms, the NAV increased 5.1% for the month.

In 2013 the NAV fell 9.2%, whilst the BSE Mid Cap Index fell 18.2%, delivering an outperformance of 9.0% in Sterling terms. Against Ocean Dial's Composite Index, the portfolio delivered an outperformance of 6.0% for the year. In local currency terms, the NAV rose 4.8% for the year.

Portfolio update

Positive contributors to the portfolio's performance came from Kajaria Ceramics (up 24.9%), KPIT Technologies (up 18.9%) and Dewan Housing (up 25.4%). Negative attribution came from Berger Paints (down 7.4%), Idea (down 4.9%) and Petronet LNG (down 7.8%). IT and Financial sectors contributed positively, whilst Telecoms and Energy lagged.

Market and economic update

December was not only another positive month for the Indian equity markets but also a further continuation of mid and small cap outperformance, enhancing ICGF's performance. Small and mid-cap stocks rose 7.4% and 6.1% respectively, whilst the main Board rose 1.9%. Foreign Institutional investors continued to support the equity market with total net buying of USD2.6bn as market sentiment improved further on the back of the main opposition party's showing in state elections, better macro-economic performance and contrary to market expectations, the RBI's decision not to increase benchmark interest rates, despite WPI inflation rising to 7.5% and CPI inflation to 11.2% in November. The RBI expects both inflation indicators to moderate somewhat since the currency has stabilised and vegetable prices have fallen as the winter crop is distributed.

India's current account deficit narrowed sharply in the quarter ended September 2013 to 1.2% of gross domestic product, the lowest level since March 2011. The key challenge remains the management of the fiscal deficit which is close to the full year target with just one fiscal quarter remaining. Another breach of this target will risk a potential Sovereign downgrade and thus we believe the Government will do its utmost to avert this eventuality, by raising further revenue through the sale of public sector assets as well as slashing planned expenditure in the last three months.

Politically, in a surprise outcome, the debutant AAP (Aam Admi Party) formed the new government in the State of Delhi with support from Congress. AAP are committed to eradicating political corruption and they are gaining popular momentum way beyond expectation. We are monitoring this closely as the General Election is only four to five months away.

Portfolio analysis by sector as at 31 December 2013
Sector	No. of Companies	% of Portfolio
Financials	9	22.8%
Industrials	6	18.3%
IT	5	12.5%
Healthcare	3	10.4%
Consumer Staples	3	10.2%
Consumer Discretionary	2	6.8%
Materials	3	5.5%
Energy	2	4.4%
Telecommunications	1	3.4%
Total Equity Investment	34	94.3%
Net Cash		5.7%
Total Portfolio	34	100.0%
Top 20 holdings as at 31 December 2013
Holding	Sector	% of Portfolio
Jyothy Laboratories	Consumer Staples	5.6%
KPIT Cummins Infosystems	IT	5.4%
Federal Bank	Financials	4.4%
Kajaria Ceramics	Industrials	4.4%
Lupin	Healthcare	4.0%
Motherson Sumi Systems	Consumer Discretionary	3.8%
Jammu & Kashmir Bank	Financials	3.5%
Idea Cellular	Telecommunications	3.4%
Dewan Housing	Financials	3.4%
Divi's Laboratories	Healthcare	3.4%
NIIT Technologies	IT	3.2%
Larsen & Toubro	Industrials	3.1%
IPCA Laboratories	Healthcare	3.1%
Eicher Motors	Industrials	3.1%
Dish TV India	Consumer Discretionary	3.0%
Voltas	Industrials	2.9%
Yes Bank	Financials	2.8%
Emami	Consumer Staples	2.8%
Tech Mahindra	IT	2.8%
Max India	Industrials	2.7%
Portfolio analysis by market capitalisation size as 31 December 2013
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR15bn)	2	1.8%
Mid Cap (INR15bn <M/Cap<INR100bn)	19	56.6%
Large Cap (M/Cap > INR100bn)	12	35.9%
Unlisted	1	0.0%
Total Equity Investment	34	94.3%
Net Cash		5.7%
Total Portfolio	34	100.0%

 

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