Net Asset Value(s)

RNS Number : 2246O

India Capital Growth Fund Limited

05 August 2014

 



5 August 2014

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

Net Asset Value statement at 31 July 2014

Net Asset Value

The Company announces its Net Asset Value per share as at 31 July 2014 was 60.76 pence.

In July the Net Asset Value (NAV) was up 1.1% in Sterling terms, whilst the BSE Mid Cap Index was down 1.3%, delivering an out performance against the notional benchmark of 2.4%. Against Ocean Dial's Composite Index, ICGF out performed by 1.7%. In local currency terms, the NAV increased 0.3% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Kajaria Ceramics (up 18.1%), Gujarat Pipavav Port (up 24.6%), PI Industries (up 18.8%) and Motherson Sumi (up 12.6%). Negative attribution came from IPCA Laboratories (down 19.5%), Indian Bank (down 19.2%) and Federal Bank (down 10.2%).

Market and economic update

Indian equity markets put in a varied performance in July, as the BSE Sensex rose 1.9% whilst the BSE Mid Cap Index fell 2.0%. Foreign Institutional Inflows remained strong (US$1.9bn for the month), reinforced by positive flows from domestic institutions.

The Government announced its first budget in July which broadly met elevated investor expectations; after such a limited period since taking office there was little time to affect meaningful policy reform. The budget focus was fiscal consolidation and a re-iteration of the fiscal deficit target of 4.1% for FY16 (ending March 2015). There remains scepticism around this target, particularly as the announcement lacked detail on tax revenue assumptions. The positive surprise was initiatives to revise business sentiment and in particular on providing improved long term funding opportunities in the Infrastructure & Real Estate sectors. Foreign direct investment (FDI) limits in Insurance and Defence sectors were raised to 49% from 26%. The Government expressly retained the right to retrospective tax legislation, but assurance was provided that they are "committed to provide a stable and predictable taxation regime that would be investor friendly and spur growth".

The economy is showing signs of revival. Car sales were up 14.8% in June (a 10 month high) and medium and heavy commercial vehicle sales turned positive. Industrial production (IIP) for the month of May rose 4.7% year on year, which is a 19 month high. The monsoon rains continue to fall short of averages, though the deficit has reduced substantially in recent weeks and thus fears of food shortages are reducing.

Companies began reporting the Q1FY15 results. Consumer Staples, Telecom, Auto and Auto Ancillaries reported good numbers while large cap IT reported in line results, mid-sized IT, Financials and Capital Goods companies disappointed.

Portfolio analysis by sector as at 31 July 2014
Sector	No. of Companies	% of Portfolio
Industrials	10	26.1%
Financials	8	23.3%
IT	4	9.8%
Healthcare	4	9.3%
Consumer Staples	4	9.2%
Materials	3	7.9%
Consumer Discretionary	2	7.2%
Energy	1	3.0%
Total Equity Investment	36	95.8%
Net Cash		4.2%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 July 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	4.8%
Kajaria Ceramics	Industrials	4.6%
Motherson Sumi Systems	Consumer Discretionary	4.5%
Dewan Housing	Financials	4.4%
Tech Mahindra	IT	4.0%
Jyothy Laboratories	Consumer Staples	3.7%
Eicher Motors	Industrials	3.6%
PI Industries	Materials	3.3%
KPIT Cummins Infosystems	IT	3.2%
Yes Bank	Financials	3.1%
Divi's Laboratories	Healthcare	3.1%
Jammu & Kashmir Bank	Financials	3.0%
Aban Offshore	Energy	3.0%
Max India	Industrials	2.9%
Emami	Consumer Staples	2.8%
Lupin	Healthcare	2.8%
Gujarat Pipavav	Industrials	2.7%
Sobha Developers	Financials	2.7%
Dish TV India	Consumer Discretionary	2.7%
Indusind Bank	Financials	2.7%
Portfolio analysis by market capitalisation size as 31 July 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	13	34.8%
Mid Cap (INR60bn <M/Cap<INR250bn)	16	43.1%
Large Cap (M/Cap > INR250bn)	6	17.9%
Unlisted	1	0.0%
Total Equity Investment	36	95.8%
Net Cash		4.2%
Total Portfolio	36	100.0%

 

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