Net Asset Value(s)

RNS Number : 8064B

India Capital Growth Fund Limited

06 April 2017

 

6 April 2017

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

Net Asset Value statement at 31 March 2017

Net Asset Value

The Company announces its Net Asset Value per share as at 31 March 2017 was 109.89 pence.

In March the Net Asset Value (NAV) was up 8.1% in Sterling terms, whilst the BSE Mid Cap Total Return Index was up 7.1%, delivering an outperformance against the notional benchmark of 1.0%. In local currency terms, the NAV was up 5.2% for the month.

Portfolio update

Positive attribution to the portfolio's performance came from Neuland Laboratories (up 63.7%), Ramkrishna Forgings (up 20.1%), Skipper (up 25.4%) and Sobha Developers (up 18.0%). Negative attribution came from Divis Laboratories (down 17.8%), Jyothy Laboratories (down 6.0%) and Tech Mahindra (down 8.1%).

Market and economic update

Buoyed by a landslide victory in key State elections for Prime Minister Modi's ruling party, India's equity markets hit all-time highs, at least in local currency terms. Thus, the BSE Sensex rose 3.1%, whilst the BSE Mid Cap TR continued to outperform, rising 4.3%. Foreign Institutions were net buyers for the second month running (US$5.1bn of net inflows) although Domestic Institutions turned net sellers (US$654m of net outflows). The surge in foreign fund flows, combined with a weak-ish US Dollar, forced the Indian Rupee up 2.8% against it and 2.6% against Sterling. This is the biggest quarterly gain for the currency against the US Dollar in the last four years.

Alongside the Uttar Pradesh victory, the party also won comfortably in Uttarakhand whilst also managing to form local governments in Goa and Manipur, the latter two in collaboration with smaller regional parties. The dominant nature of the BJP victory in the State elections shows well for the party's prospects in the next National Elections scheduled for 2019, and hence for sentiment on policy continuity.

Consumer price inflation continued to rise to 3.7% in February from 3.2% in January, mainly driven by food prices and firming global commodity prices, forcing yields higher; 10 year Government yields rose from December lows of 6.2% to 6.7% by March month end. Prospects of the Reserve Bank cutting interest rates in the near term look bleak.

The Lower House cleared four remaining bills required for the implementation of Goods and Services Tax, scheduled to rollout in July this year. We continue to believe that there is potential for market disappointment in relation to the timely and efficient application of the new tax as companies indicate that the time needed to adopt the new process has been insufficient. What this means for reported earnings in the short term, however, is unclear.

Portfolio analysis by sector as at 31 March 2017
Sector	No. of Companies	% of Portfolio
Financials	7	25.9%
Materials	9	21.2%
Consumer Discretionary	7	18.6%
Consumer Staples	5	10.5%
Industrials	4	9.5%
IT	2	4.6%
Healthcare	2	3.7%
Real Estate	2	3.4%
Total Equity Investment	38	97.4%
Net Cash		2.6%
Total Portfolio	38	100.0%
Top 20 holdings as at 31 March 2017
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.7%
Dewan Housing	Financials	5.0%
Federal Bank	Financials	4.6%
Jyothy Laboratories	Consumer Staples	3.7%
Motherson Sumi Systems	Consumer Discretionary	3.7%
Ramkrishna Forgings	Materials	3.4%
Dish TV India	Consumer Discretionary	3.2%
Kajaria Ceramics	Industrials	3.2%
Welspun India	Consumer Discretionary	3.2%
Indusind Bank	Financials	3.2%
Sobha Developers	Real Estate	3.1%
City Union Bank	Financials	2.9%
Finolex Cables	Industrials	2.9%
PI Industries	Materials	2.9%
The Ramco Cements	Materials	2.7%
Exide Industries	Consumer Discretionary	2.7%
Sagar Cements	Materials	2.6%
NIIT Technologies	IT	2.5%
Max Financial Services	Financials	2.5%
Skipper	Materials	2.4%
Portfolio analysis by market capitalisation size as 31 March 2017
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < US$2bn)	23	57.0%
Mid Cap (US$2bn < M/Cap < US$7bn)	11	26.2%
Large Cap (M/Cap > US$7bn)	4	14.2%
Total Equity Investment	38	97.4%
Net Cash		2.6%
Total Portfolio	38	100.0%

 

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