Net Asset Value(s)

RNS Number : 3248W

India Capital Growth Fund Limited

06 November 2014

 



6 November 2014

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

Net Asset Value statement at 31 October 2014

Net Asset Value

The Company announces its Net Asset Value per share as at 31 October 2014 was 71.18 pence.

In October the Net Asset Value (NAV) was up 7.7% in Sterling terms, whilst the BSE Mid Cap Index was up 5.5%, delivering an out performance against the notional benchmark of 2.2%. Against Ocean Dial's Composite Index, ICGF out performed by 1.9%. In local currency terms, the NAV increased 5.3% for the month.

The Company also announces its fully diluted Net Asset Value per share as at 31 October 2014 was 67.79 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 Yes Bank (up 22.5%), Federal Bank (up 12.9%), Emami (up 16.2%) and Indusind Bank (up 15.9%). Negative attribution came from Exide Industries (down 7.1%), Kajaria Ceramics (down 5.4%), IPCA Laboratories (down 7.7%) and NIIT Technologies (down 3.5%).

Market and economic update

The Indian equity markets performed strongly for the month. The BSE Sensex was up 4.6% whilst the BSE Mid Cap Index rose 3.2% as the new Government began policy reforms. Foreign Institutional Inflows remained positive for the month at US$145m, although domestic mutual funds drove the markets with positive flows of US$968m. INR was stronger by 2.2% against GBP and 0.3% against US$.

In October the Government ruling party, the BJP, won key state elections in Maharashtra and Haryana. These states represent 18.5% of GDP resulting in the BJP now governing 50% of India's GDP at the state level. With no more meaningful state elections for another year, the Government's political firepower has increased, highlighted by the announcement of long awaited policy reforms; the deregulation of the diesel price to help reduce the subsidy burden; a hike in the natural gas price; ordinance on coal block auctioning, paving the way for commercial participation; and easing of FDI limits in the real estate sector to accelerate investment in low cost housing.

Consumer Price Inflation for September was 6.5% due to the decline in crude oil prices and softening of vegetable prices, which is at its lowest level since January 2012. The target set by the RBI of 6% by January 2016 now looks more achievable, heightening expectation of an earlier rate cut than expected.

Q2 corporate results saw the Consumer and Telecom sectors faring better than expected while IT Services (excluding Infosys and Tech Mahindra), Financials and Health Care sectors reported inline results. The Industrials and Utilities sectors are yet to report improved forecast results, suggesting that while the policy environment has improved, real activity is picking up at a more modest pace.

Portfolio analysis by sector as at 31 October 2014
Sector	No. of Companies	% of Portfolio
Industrials	10	26.3%
Financials	7	21.1%
Consumer Staples	4	10.5%
Healthcare	5	11.3%
Materials	3	8.9%
IT	4	8.5%
Consumer Discretionary	2	6.9%
Energy	1	2.2%
Total Equity Investment	36	95.7%
Net Cash		4.3%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 October 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	5.5%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Tech Mahindra	IT	4.3%
Jyothy Laboratories	Consumer Staples	3.9%
Dewan Housing	Financials	3.9%
Emami	Consumer Staples	3.6%
Yes Bank	Financials	3.6%
Divi's Laboratories	Healthcare	3.5%
Kajaria Ceramics	Industrials	3.2%
Eicher Motors	Industrials	3.1%
PI Industries	Materials	3.0%
Indusind Bank	Financials	3.0%
Berger Paints India	Materials	2.8%
Max India	Industrials	2.8%
Lupin	Healthcare	2.8%
Gujarat Pipavav	Industrials	2.8%
Exide	Industrials	2.8%
Balkrishna	Industrials	2.8%
The Ramco Cements	Materials	2.7%
Finolex Cables	Industrials	2.6%
Portfolio analysis by market capitalisation size as 31 October 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < INR60bn)	13	29.4%
Mid Cap (INR60bn < M/Cap < INR250bn)	15	44.1%
Large Cap (M/Cap > INR250bn)	7	21.9%
Unlisted	1	0.3%
Total Equity Investment	36	95.7%
Net Cash		4.3%
Total Portfolio	36	100.0%

 

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