Net Asset Value(s)

RNS Number : 5397T

India Capital Growth Fund Limited

06 October 2014

 



6 October 2014

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

Net Asset Values statement at 30 September 2014

Net Asset Values

The Company announces its undiluted Net Asset Value per share as at 30 September 2014 was 66.08 pence.

In September the undiluted Net Asset Value (NAV) was up 3.1% in Sterling terms, whilst the BSE Mid Cap Index was up 2.6%, delivering an out performance against the notional benchmark of 0.5%. Against Ocean Dial's Composite Index, ICGF out performed by 1.1%. In local currency terms, the NAV increased 3.0% for the month.

The Company also announces its fully diluted Net Asset Value per share as at 30 September 2014 was 64.39 pence. 

The above fully diluted Net Asset Value assumes that the 37,500,710 Subscription Shares rights will be exercised at their subscription price of 61 pence. The Subscription Shares have a subscription date of 6 August 2016. However, if at any time after 6 August 2015 the average middle market quotation for an Ordinary Share for at least 10 consecutive trading days is 5% or more above the subscription price, the Company has the right, (but not the obligation) by an announcement on a RIS to change the subscription date for exercise of the Subscription Shares to an earlier date (being a date not less than 30 days after the Company's announcement) that it is bringing forward the subscription date. In that event an announcement will be made on a RIS and a notice of the revised subscription date will be given to all holders of the Subscription Shares on the register at 5.00pm on the date falling three business days following the announcement of the revised subscription date.

Portfolio update

Positive attribution to the portfolio's performance came from Eicher Motors (up 22.7%), Divis Laboratories (up 15.1%), Gujarat Pipavav Port (up 18.2%) and Jyothy Laboratories (up 7.9%). Negative attribution came from Aban Offshore (down 16.3%), Sobha Developers (down 11.1%), Dewan Housing (down 6.4%) and Jain Irrigation (down 8.6%).

Market and economic update

Indian equity markets performance remained mixed in September; the BSE Sensex remained unchanged whilst the BSE Mid Cap Index rose 2.5%. Foreign Institutional Inflows remained strong (US$903.2m for the month), reinforced by further positive flows from domestic institutions.

India's August trade deficit narrowed to US$10.8bn from US$12.2bn in July, driven by softening oil prices. This trade deficit trend is likely to continue with oil prices softening further in September and the oil import bill typically reflecting price changes with a month's lag. The sharp fall in global crude oil prices is expected to contain the risk of higher-than-budgeted borrowing as the Government's subsidy burden has reduced substantially with a likelihood of diesel deregulation soon. As a consequence, the Government's fiscal situation also appears to be comfortably placed despite muted tax collection growth, supported by the clearance of the Government's divestment proposal on Coal India, ONGC and NHPC. If successfully carried out these sales are expected to raise INR430bn (approximately US$7bn).

S&P upgraded India's rating outlook to stable from negative whilst reaffirming its BBB- sovereign rating. This was on their belief that "the new Government has both the willingness and capacity to implement reforms necessary to restore some of India's lost growth potential, consolidate its fiscal accounts, and permit the Reserve Bank of India to carry out effective monetary policy."

Consumer Price Inflation (CPI) for August came down only marginally to 7.8% as food prices continue to rise due to lower than normal monsoon rain. However core inflation is falling, dipping to 6.9% in August from 7.4% in the previous month, as continued tight monetary policy is restricting pricing power. This provides a positive outlook to CPI inflation and the potential for rate cuts in the future.

Portfolio analysis by sector as at 30 September 2014
Sector	No. of Companies	% of Portfolio
Industrials	10	27.0%
Financials	7	19.7%
Healthcare	5	11.6%
Consumer Staples	4	10.1%
IT	4	9.9%
Materials	3	9.0%
Consumer Discretionary	2	6.8%
Energy	1	2.1%
Total Equity Investment	36	96.2%
Net Cash		3.8%
Total Portfolio	36	100.0%
Top 20 holdings as at 30 September 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	5.1%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Tech Mahindra	IT	4.3%
Jyothy Laboratories	Consumer Staples	3.9%
Kajaria Ceramics	Industrials	3.9%
Dewan Housing	Financials	3.6%
Divi's Laboratories	Healthcare	3.6%
PI Industries	Materials	3.5%
Eicher Motors	Industrials	3.2%
Emami	Consumer Staples	3.1%
Lupin	Healthcare	3.0%
KPIT Cummins Infosystems	IT	3.0%
Exide	Industrials	2.8%
Berger Paints India	Materials	2.8%
Yes Bank	Financials	2.8%
Gujarat Pipavav	Industrials	2.8%
Max India	Industrials	2.8%
Balkrishna	Industrials	2.8%
Indusind Bank	Financials	2.7%
NIIT Technologies	IT	2.6%

Portfolio analysis by market capitalisation size as 30 September 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	13	30.5%
Mid Cap (INR60bn <M/Cap<INR250bn)	15	43.9%
Large Cap (M/Cap > INR250bn)	7	21.8%
Unlisted	1	0.0%
Total Equity Investment	36	96.2%
Net Cash		3.8%
Total Portfolio	36	100.0%

 

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