Net Asset Value(s)

RNS Number : 2209P

India Capital Growth Fund Limited

04 June 2015

 



4 June 2015

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

Net Asset Value statement at 31 May 2015

Net Asset Value

The Company announces its Net Asset Value per share as at 31 May 2015 was 80.69 pence.

In May the Net Asset Value (NAV) was up 6.0% in Sterling terms, whilst the BSE Mid Cap Index was up 3.1%, delivering an out performance against the notional benchmark of 2.9%. Against Ocean Dial's Composite Index, ICGF out performed by 2.9%. In local currency terms, the NAV was up 5.8% for the month.

The Company also announces its fully diluted NAV per share as at 31 May 2015 was 74.13 pence. 

The above fully diluted NAV 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 Dish TV (up 34.6%), Eicher Motors (up 24.4%), Ajanta Pharma (up 25.1%) and Emami (up 20.4%). Negative attribution stemmed from Tech Mahindra (down 10.8%), Exide (down 10.4%) and Finolex Cables (down 7.8%).

Market and economic update

Indian equity markets bounced back after the previous month's correction; the BSE Sensex was up 3.0% whilst the BSE Mid Cap Index was up 2.9%. Foreign Institutional Investors turned net sellers (US$429m for the month), while domestic institutions continued to remain net buyers. The Rupee appreciated 0.2% against Sterling but depreciated a further 0.6% against the US Dollar. 

India's GDP grew at a rate of 7.3% for the year ending March 2015 according to the recently introduced new series of GDP calculation. The industrial sector grew 5.6%, buoyed by a surprising spurt in manufacturing growth of 8.4% in Q4FY15, whilst the services sector grew 9.2% in the final quarter. However agriculture's contribution fell 1.4%, following unseasonal rainfall in the sowing season.

Consumer Price Inflation (CPI) for April came in at 4.9%, lower than estimated, helped mainly by food inflation which remained contained despite the unseasonable rains. In its recent policy meeting the Reserve Bank of India lowered interest rates by a further 25bps for a third time this year to 7%. The outlook was more cautious than in prior statements, citing the risk to rising crude, the expectation of a weak monsoon as well as global volatility.

The Q4FY15 earnings were below expectations while the Sensex 30 net profit declined 11% year-on-year. However a bright spot was provided in the forward guidance given by Cummins India, a manufacturer of industrial engines, which indicated that there were signs of uptick in domestic industrial business, led by mining and construction sectors. This was further supported by Larsen & Toubro, a diversified engineering conglomerate, whose core order inflows grew 35% year-on-year in the last quarter.

Portfolio analysis by sector as at 31 May 2015
Sector	No. of Companies	% of Portfolio
Financials	8	23.8%
Industrials	7	19.1%
Consumer Discretionary	5	14.7%
Materials	4	10.2%
Consumer Staples	4	10.0%
Healthcare	4	9.7%
IT	3	5.8%
Energy	1	1.0%
Total Equity Investment	36	94.3%
Net Cash		5.7%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 May 2015
Holding	Sector	% of Portfolio
Federal Bank	Financials	4.9%
Kajaria Ceramics	Industrials	4.3%
Dewan Housing	Financials	4.0%
Jyothy Laboratories	Consumer Staples	3.9%
PI Industries	Materials	3.9%
Motherson Sumi Systems	Consumer Discretionary	3.8%
Yes Bank	Financials	3.8%
Dish TV India	Consumer Discretionary	3.6%
Emami	Consumer Staples	3.5%
Max India	Financials	3.4%
Indusind Bank	Financials	3.3%
Tech Mahindra	IT	3.2%
Eicher Motors	Industrials	3.2%
Balkrishna Industries	Consumer Discretionary	3.2%
Divi's Laboratories	Healthcare	3.0%
Lupin	Healthcare	2.9%
Ajanta Pharma	Healthcare	2.9%
Gujarat Pipavav Port	Industrials	2.8%
Berger Paints India	Materials	2.7%
Exide	Industrials	2.7%
Portfolio analysis by market capitalisation size as 31 May 2015
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	12	18.8%
Mid Cap (INR60bn <M/Cap<INR250bn)	17	53.5%
Large Cap (M/Cap > INR250bn)	7	22.0%
Total Equity Investment	36	94.3%
Net Cash		5.7%
Total Portfolio	36	100.0%

 

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