Net Asset Value(s)

RNS Number : 4295D

India Capital Growth Fund Limited

06 July 2016

 

6 July 2016

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

Net Asset Value statement at 30 June 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2016 was 94.48 pence.

In June the Net Asset Value (NAV) was up 15.6% in Sterling terms, whilst the BSE Mid Cap Total Return Index was up 12.4%, delivering an out performance against the notional benchmark of 3.2%.

The Company also announces its fully diluted NAV per share as at 30 June 2016 was 83.32 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.

Portfolio update

Positive attribution to the portfolio's performance came from Max Financial Services (up 49.6%), Indian Bank (up 55.4%), Kajaria Ceramics (up 10.6%) and The Ramco Cements (up 12.6%). Negative attribution came from Mahindra CIE Auto (down 16.8%), Tech Mahindra (down 6.4%) and Voltas (down 4.1%).

Market and economic update

Indian equity markets continued to rise; the BSE Sensex gained 1.2% whilst the BSE Mid Cap Index rallied 3.1%, both driven by expectations of a productive monsoon and a strengthening belief that the GST Bill will pass successfully through the Upper House in the coming parliament session. The market seemed to shrug off the disappointing announcement that the Governor of the Reserve Bank, Raghuram Rajan, will not receive an extension to his term of office. A shortlist of credible candidates has been drawn up and a decision on his replacement will be released before September and we are cautiously optimistic that his replacement will provide suitable policy continuity. Concurrently the Central Bank left benchmark rates unchanged citing short term inflationary concerns as India's annual consumer price inflation accelerated to 5.8%, driven by surging prices of products such as pulses and sugar. The tone remained hawkish, since inflation is above the March 2017 target of 5% but if, as expected, continued healthy rainfall reduces price pressure on basic food items, inflationary pressure will be eased; the next two months are crucial in this regard as the battle has not yet been won.

Foreign Institutions were net buyers of US$771m this month, while Domestic Institutions sold US$284m over the same period. Currency volatility against the US Dollar remained low with the Rupee slipping 0.4%, whilst Brexit drove the Rupee 8.2% higher against Sterling as the UK voted to leave the European Union, significantly increasing the value of the portfolio in Sterling terms.

The Government approved a 24% hike in wages for central government employees which will boost consumption, particularly in urban India; state governments are likely to follow suit. In a further move to open up the economy to foreign direct investment, the Government approved an "automatic approval process" easing preconditions for investment in sectors including defence, civil aviation, single brand retail, healthcare and media.

Portfolio analysis by sector as at 30 June 2016
Sector	No. of Companies	% of Portfolio
Financials	9	29.1%
Materials	7	17.3%
Consumer Discretionary	5	13.2%
Industrials	5	13.1%
Healthcare	5	9.2%
Consumer Staples	4	8.4%
IT	2	4.3%
Total Equity Investment	37	94.7%
Net Cash		5.3%
Total Portfolio	37	100.0%
Top 20 holdings as at 30 June 2016
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.2%
Kajaria Ceramics	Industrials	4.5%
Federal Bank	Financials	4.3%
Jyothy Laboratories	Consumer Staples	3.9%
Indusind Bank	Financials	3.8%
PI Industries	Materials	3.8%
Dish TV India	Consumer Discretionary	3.7%
Dewan Housing	Financials	3.7%
City Union	Financials	3.6%
The Ramco Cements	Materials	3.5%
Divis Laboratories	Healthcare	3.4%
Max Financial Services	Financials	3.3%
Exide Industries	Consumer Discretionary	3.2%
Finolex Cables	Industrials	3.2%
Motherson Sumi Systems	Consumer Discretionary	3.1%
Berger Paints India	Materials	3.0%
Sobha Developers	Financials	2.7%
Tech Mahindra	IT	2.5%
Essel Propack	Materials	2.4%
Emami	Consumer Staples	2.4%
Portfolio analysis by market capitalisation size as 30 June 2016
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < INR60bn)	15	29.1%
Mid Cap (INR60bn < M/Cap < INR250bn)	15	43.8%
Large Cap (M/Cap > INR250bn)	7	21.8%
Total Equity Investment	37	94.7%
Net Cash		5.3%
Total Portfolio	37	100.0%

 

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