Net Asset Value(s)

RNS Number : 8729E

India Capital Growth Fund Limited

06 November 2015

 



6 November 2015

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

Net Asset Value statement at 31 October 2015

Net Asset Value

The Company announces its Net Asset Value per share as at 31 October 2015 was 78.38 pence.

In October the Net Asset Value (NAV) was up 0.1% in Sterling terms, whilst the BSE Mid Cap Index was up 1.2%, delivering an under performance against the notional benchmark of 1.1%. Against Ocean Dial's Composite Index, ICGF under performed by 1.3%. In local currency terms, the NAV was up 0.4% for the month.

The Company also announces its fully diluted NAV per share as at 31 October 2015 was 72.59 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 Kajaria Ceramics (up 13.7%), Sobha (up 16.5%), NIIT Tech (up 19.7%) and KPIT Technologies (up 28.1%). Negative attribution came from Federal Bank (down 15.2%), Neuland Laboratories (down 23.2%) and Gujarat Pipavav Port (down 12.9%).

Market and economic update

Indian equity markets continued to claw back some of the value lost in August with the BSE Sensex up 1.9% and the BSE Mid Cap Index up 1.6% (local currency). Foreign Institutions were net buyers of US$765m whilst domestic institutions sold US$324m for the period. The Indian Rupee appreciated by 0.5% against the US Dollar but fell 0.4% against Sterling.

The country's fiscal deficit for the period April to September (H1FY16) reached 68% of full year target of 3.9% of GDP, a high number, but still 14% lower than last year. Tax receipts (mainly indirect) increased 25.7%, whilst expenditure rose 5.6%, reflecting the Government's determination to support growth. In time we expect this to trigger a revival in private sector capital commitment to the investment cycle.

Industrial production (IIP) grew to 6.4% in August (a three-year high), up from 4.1% in July. The rise was mainly on account of double digit growth in consumer durable spending and capital goods, both factors driven by restocking ahead of the annual festival season. Contrary to this better news, food price inflation hardened from 2.9% growth to 4.3% in September, chiefly driven by rising prices for proteins and pulses. Core inflation remains within the Reserve Bank of India's comfort zone.

Second quarter (FY15) corporate results started filtering in; in line on aggregate. The results to date suggest weak revenue growth, offset by firmer margins (due to lower input costs); unremarkable overall. Sector wise, the Consumer Discretionary stocks beat expectations in the main, whilst Health Care and IT were mixed. "Staples" disappointed on lower volume growth. Elsewhere the Industrials failed to reflect any improvement arising from increased Government spending and Financials reported weak credit growth and increased provisioning. The market remains range bound ahead of State elections in Bihar.

Portfolio analysis by sector as at 31 October 2015
Sector	No. of Companies	% of Portfolio
Financials	9	27.1%
Consumer Discretionary	5	14.6%
Industrials	6	14.4%
Materials	5	12.9%
Healthcare	4	10.9%
Consumer Staples	4	9.9%
IT	3	6.6%
Total Equity Investment	36	96.4%
Net Cash		3.6%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 October 2015
Holding	Sector	% of Portfolio
Dewan Housing	Financials	4.4%
Jyothy Laboratories	Consumer Staples	4.4%
Kajaria Ceramics	Industrials	4.2%
Federal Bank	Financials	3.9%
Yes Bank	Financials	3.9%
PI Industries	Materials	3.9%
Divis Laboratories	Healthcare	3.8%
Max India	Financials	3.6%
Dish TV India	Consumer Discretionary	3.5%
Indusind Bank	Financials	3.4%
City Union	Financials	3.1%
Exide Industries	Consumer Discretionary	3.0%
Sobha	Financials	2.9%
Motherson Sumi Systems	Consumer Discretionary	2.9%
Ajanta Pharma	Healthcare	2.9%
Tech Mahindra	IT	2.9%
Berger Paints India	Materials	2.9%
Balkrishna Industries	Consumer Discretionary	2.7%
Lupin	Healthcare	2.6%
Eicher Motors	Industrials	2.6%
Portfolio analysis by market capitalisation size as 31 October 2015
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	13	26.1%
Mid Cap (INR60bn <M/Cap<INR250bn)	15	46.4%
Large Cap (M/Cap > INR250bn)	8	23.9%
Total Equity Investment	36	96.4%
Net Cash		3.6%
Total Portfolio	36	100.0%

 

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