Net Asset Value(s)

RNS Number : 8442Y

India Capital Growth Fund Limited

04 December 2014

 



4 December 2014

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

Net Asset Value statement at 30 November 2014

Net Asset Value

The Company announces its Net Asset Value per share as at 30 November was 73.27 pence.

In November the Net Asset Value (NAV) was up 2.9% in Sterling terms, whilst the BSE Mid Cap Index was up 5.2%, delivering an underperformance against the notional benchmark of 2.3%. Against Ocean Dial's Composite Index, ICGF underperformed by 1.7%. In local currency terms, the NAV increased 2.2% for the month.

The Company also announces its fully diluted Net Asset Value per share as at 30 November 2014 was 69.18 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 Ajanta Pharma (up 24.4%), Finolex Cables (up 17.4%), Eicher Motors (up 13.7%) and Dewan Housing, (up 9.7%). Negative attribution came from Balkrishna Industries (down 18.3%), Divis Laboratories (down 7.9%) and Jyothy Laboratories (down 6.5%).

Market and economic update

Strong performance by the Indian equity markets continued for the month. The BSE Sensex was up 3.0% whilst the BSE Mid Cap Index rose 4.4%, both principally driven by dominant macro factors including the fall in oil prices and further positive policy-related news flow. Foreign Institutional Inflows remained strong (US$2.3bn in November), though overall domestic flows were negative. Over the period the Indian Rupee depreciated by 0.9% against the US Dollar but rose by 0.7% against UK Sterling.

India's FY15 Q2 GDP growth was 5.3% year on year; better-than-expected but lower than 5.7% in the previous quarter. Agriculture and Government spending contributed positively to growth, whilst manufacturing continued to drag the numbers lower as factory output grew just 0.1%. Credit demand, tax receipts and non-oil, non-gold imports remain weak, suggesting further time is required for the economy to cleanse itself. This was confirmed by disappointing corporate results for the second quarter, below expectations on sales and margins. Further downgrades are expected.

In October consumer price inflation (CPI) fell to 5.5%, the lowest number since Jan 2012. This was helped by the decline in crude oil and food prices. Consequently 10-year Government bond yields fell to a 16-month low at 7.97% as the market gravitated towards an imminent easing of monetary policy. Though the Reserve Bank of India kept rates unchanged, the outlook is unmistakably dovish, stating. "If the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle." The debate on rates is now just about timing.

The winter session of parliament started on an encouraging note. Five bills were passed in the lower house and three in the upper house. Specifically, the Labour law amendment bill, designed to ease regulatory filings for small companies, was approved by both houses.

We remain confident that in due course the much improved operating environment in India will lead to a powerful earnings recovery.

Portfolio analysis by sector as at 30 November 2014
Sector	No. of Companies	% of Portfolio
Industrials	10	26.7%
Financials	7	22.5%
Consumer Staples	4	9.8%
Healthcare	4	9.6%
Materials	3	8.6%
IT	3	8.4%
Consumer Discretionary	2	7.1%
Energy	1	1.8%
Total Equity Investment	34	94.5%
Net Cash		5.5%
Total Portfolio	34	100.0%
Top 20 holdings as at 30 November 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	5.7%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Dewan Housing	Financials	4.3%
Tech Mahindra	IT	3.9%
Jyothy Laboratories	Consumer Staples	3.9%
Yes Bank	Financials	3.6%
Emami	Consumer Staples	3.6%
Eicher Motors	Industrials	3.5%
Kajaria Ceramics	Industrials	3.2%
Exide	Industrials	3.1%
PI Industries	Materials	3.0%
Divi's Laboratories	Healthcare	3.0%
Indusind Bank	Financials	2.8%
Lupin	Healthcare	2.8%
Max India	Industrials	2.8%
Berger Paints India	Materials	2.8%
Finolex Cables	Industrials	2.8%
Gujarat Pipavav	Industrials	2.7%
Sobha Developers	Financials	2.6%
Dish TV India	Consumer Discretionary	2.6%
Portfolio analysis by market capitalisation size as 30 November 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	13	30.1%
Mid Cap (INR60bn <M/Cap<INR250bn)	13	38.6%
Large Cap (M/Cap > INR250bn)	8	25.8%
Total Equity Investment	34	94.5%
Net Cash		5.5%
Total Portfolio	34	100.0%

 

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