Net Asset Value(s)

RNS Number : 2604O

India Capital Growth Fund Limited

05 February 2016

 

5 February 2016

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

Net Asset Value statement at 31 January 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 31 January 2016 was 75.71 pence.

In January the Net Asset Value (NAV) was down 6.2% in Sterling terms, whilst the BSE Mid Cap Index was down 5.9%, delivering an underperformance against the notional benchmark of 0.3%. Against Ocean Dial's Composite Index, ICGF underperformed by 0.5%. In local currency terms, the NAV was down 6.8% for the month.

The Company also announces its fully diluted NAV per share as at 31 January 2016 was 70.81 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 Gujarat Pipavav Port (up 13.9%), Yes Bank (up 2.9%), Emami (up 0.8%) and PI Industries (up 0.3). Negative attribution came from Dewan Housing (down 21.9%), Federal Bank (down 17.6%) and Exide Industries (down 17.9%).

Market and economic update 

January was a weak month for Indian equity markets which declined in tandem with a global sell off. The BSE Sensex was down 4.8% and the BSE Mid Cap fell by 6.5% (both in Rupee terms), driven by selling pressure from overseas investors. Indeed, FIIs withdrew US$1.7bn from equities, but encouragingly domestic investors remained buyers, with net inflows of US$1.8bn for the month. The Rupee depreciated 2.4% against the US Dollar, whilst Sterling weakness led to an appreciation of 0.6% against the Pound.

Consumer Price inflation (CPI) for December rose to 5.6% (from 5.4% in November) driven by an increase in food prices. Whilst the RBI left interest rates unchanged in January, its commentary indicated it continues to remain accommodative as long as inflation remains on track to meet its 5% target by the end of March 2017 and the Government adheres to maintaining fiscal discipline. All eyes now turn to the Government's next budget which will be read to Parliament on 29 February.

India's industrial output (IIP) contracted by 3.2% in November 2015, its sharpest drop since October 2011. This was driven by an unfavourable base due to a shift in the festive calendar as well as severe flooding in South India. On a positive note, there was an improvement in both tax and non-tax revenue collection led by increases in excise duty on fuel on the back of weak crude prices. This has helped keep the fiscal deficit for the first three quarters (April-December) of FY16 at 87.9% of the full-year target of 3.9% of GDP.

Indian companies began reporting results for Q3FY16.  Earnings have been muted so far with the trend of weak revenue growth and relatively better margin performance continuing. IT, Healthcare, Energy and regulated Utilities have managed to meet expectations. Consumer Staples (weak volume growth) and Financials (higher NPAs) have reported weak results thus far as have Telecommunications and Industrials.

Portfolio analysis by sector as at 31 January 2016
Sector	No. of Companies	% of Portfolio
Financials	10	26.3%
Materials	7	17.2%
Consumer Discretionary	5	13.5%
Industrials	6	12.3%
Consumer Staples	4	10.6%
Healthcare	4	10.1%
IT	3	7.0%
Total Equity Investment	39	97.0%
Net Cash		3.0%
Total Portfolio	39	100.0%
Top 20 holdings as at 31 January 2016
Holding	Sector	% of Portfolio
Federal Bank	Financials	4.3%
Jyothy Laboratories	Consumer Staples	4.3%
Kajaria Ceramics	Industrials	4.2%
Yes Bank	Financials	4.0%
Divis Laboratories	Healthcare	4.0%
PI Industries	Materials	4.0%
Dewan Housing	Financials	3.8%
Indusind Bank	Financials	3.7%
Berger Paints India	Materials	3.6%
Motherson Sumi Systems	Consumer Discretionary	3.3%
Dish TV India	Consumer Discretionary	3.2%
City Union Bank	Financials	2.9%
The Ramco Cements	Materials	2.8%
Tech Mahindra	IT	2.8%
Sobha Developers	Financials	2.8%
Max Financial Services	Financials	2.7%
Emami	Consumer Staples	2.6%
Mahindra CIE Auto	Consumer Discretionary	2.5%
Ajanta Pharma	Healthcare	2.5%
Exide Industries	Consumer Discretionary	2.5%
Portfolio analysis by market capitalisation size as 31 January 2016
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	19	35.9%
Mid Cap (INR60bn <M/Cap<INR250bn)	13	39.0%
Large Cap (M/Cap > INR250bn)	7	22.1%
Total Equity Investment	39	97.0%
Net Cash		3.0%
Total Portfolio	39	100.0%

 

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