Initial Issue and Share Issuance Programme

RNS Number : 1143A

Ashoka India Equity Investment Tst

28 May 2021

 

28 May 2021

LEI: 213800KX5ZS1NGAR2J89

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO INDIA, THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE SECTION ENTITLED "DISCLAIMER" TOWARDS THE END OF THIS ANNOUNCEMENT.

The contents of this announcement do not constitute or form part of, and should not be construed as, an offer of or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities for sale or subscription in any jurisdiction nor shall they (or any part of them) or the fact of their distribution form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment to do so. This announcement is an advertisement and not a prospectus for the purposes of EU Regulation 2017/1129 as it forms part of the UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended (the "UK Prospectus Regulation") and Part VI of the Financial Services and Markets Act 2000, as amended, and shall not be relied upon in connection with or act as an inducement to enter into any contract or commitment whatsoever. A prospectus will be prepared and made available to the public in accordance with the UK Prospectus Regulation (the "Prospectus"). Recipients of this announcement who intend to purchase such securities are reminded that any such purchase or subscription must be made solely on the basis of the information contained in the Prospectus in its final form. Copies of the Prospectus will, following publication, be available from the Company's registered office and on the Company's website (https://ashokaindiaequity.com).

Ashoka India Equity Investment Trust plc 

(the "Company" or "Ashoka India Equity Investment Trust")

Initial Issue and Share Issuance Programme

Further to its announcement on 23 April 2021, the board of Directors (the "Board") of Ashoka India Equity Investment Trust (ticker: AIE), today announces the proposed issue of further ordinary shares ("New Ordinary Shares") in the Company by way of an initial placing, offer for subscription and intermediaries offer (the "Initial Issue"), as part of a proposed ongoing share issuance programme of New Ordinary Shares (the "Share Issuance Programme"). Details of the Share Issuance Programme (including the Initial Issue) will be set out in the summary document, registration document and securities note (together, the "Prospectus"), expected to be published by the Company later today.

This announcement has been released on behalf of the Company by order of the Board.

Commenting on today's announcement, Andrew Watkins, Chairman of Ashoka India Equity Investment Trust, said:

"I am pleased the Company is announcing the launch of the Initial Issue and Share Issuance Programme. The Board is very satisfied with the performance of the Company since its IPO in 2018, for which huge credit is due to the White Oak team. India is currently faced with the challenge of the second wave of the Covid-19 virus, and the thoughts of my fellow Directors and I are with the people of India. India remains an attractive, long-term investment, and the Board continues to believe that there is a compelling investment opportunity, which plays strongly to our manager's bottom-up approach to stock selection."

Applications will be made to the Financial Conduct Authority and the London Stock Exchange for all of the New Ordinary Shares to be issued pursuant to the Initial Issue and the Share Issuance Programme to be admitted to the premium listing segment of the Official List and to trading on the premium segment of the Main Market ("Admission"). It is expected that Admission in respect of the Initial Issue ("Initial Admission") will become effective and dealings in the New Ordinary Shares will commence on 18 June 2021.

Background to, and reasons for, the Prospectus and Share Issuance Programme including the Initial Issue

The Company has performed well since it listed on 6 July 2018, as detailed in the below table, and the Directors and the Investment Manager are encouraged by the investment performance of the Company and continue to see a compelling investment opportunity in Indian securities.

Performance

	6 July 2018 - 5 July 2019	6 July 2019 - 5 July 2020	6 July 2020 - 26 May 2021	6 July 2018 - 26 May 20213
Share price total return1,2 (%)	10.5%	-9.5%	56.0%	56.0%
NAV total return1,2 (%)	12.1%	-3.7%	44.3%	55.8%

Source: Datastream

¹ Figures referring to past performance are not a reliable indicator of future results.

² Returns may increase or decrease as a result of currency fluctuations.

³ Performance data shown covers the life of the fund from inception on 6 July 2018 to the Latest Practicable Date. Performance data does not exist for periods before 6 July 2018.

The Directors are keen to grow the Company through both underlying performance and the issue of further Ordinary Shares. The Directors believe that an increase in the size of the Company would improve liquidity and enhance the marketability of the Company, resulting in a broader investor base which should enable the Company to grow, thereby spreading fixed costs over a larger capital base and reducing ongoing charges per Ordinary Share.

The Board is therefore proposing to issue New Ordinary Shares through the Initial Issue and through Subsequent Issues (as defined below) under the Share Issuance Programme.

Pursuant to the shareholder resolutions passed at the general meeting of the Company held on 24 May 2021 (the "General Meeting"), the maximum number of New Ordinary Shares that may be issued pursuant to the Share Issuance Programme (including the Initial Issue) is 125,000,000.

Following the Initial Issue, the Share Issuance Programme may be implemented by way of a series of placings and, potentially, open offers, offers for subscription and/or intermediaries offers (each a "Subsequent Issue"). Any Subsequent Issues of New Ordinary Shares would be at the discretion of the Directors.

The Prospectus also caters for the admission of Ordinary Shares to trading in connection with the performance fee (if any) payable to the Investment Manager (in Ordinary Shares) in respect of the performance period ending on 30 June 2021 (as referred to in the Chairman's statement in the Company's half-yearly report for the six months ended 31 December 2020). The Investment Manager has agreed not to receive a fixed management fee from the Company in respect of its services provided under the Investment Management Agreement. The Investment Manager is entitled to receive a performance fee subject to meeting the relevant performance criteria. The performance fee is measured over consecutive, discrete performance periods of three years and is calculated as 30% of the outperformance of the Company compared to the MSCI India IMI Index (in Sterling) and is capped at 12 per cent. of the time weighted average Adjusted Net Assets. Investors should refer to Paragraph 6 of Part 3 of the Registration Document for further details on the performance fee.

Overview of the Initial Issue

The maximum numbers of Ordinary Shares available to be issued under the Initial Issue is 125,000,000 being the maximum number of shares available under the Share Issuance Programme.

The actual number of New Ordinary Shares to be issued pursuant to the Initial Issue, and therefore the gross proceeds of the Initial Issue (the "Gross Issue Proceeds"), is not known as at the date of this announcement but will be notified by the Company via a RIS prior to Initial Admission. The Directors intend to use the net proceeds of the Initial Issue to acquire investments in accordance with the Company's investment policy and objective, as will be more fully set out in the Prospectus.

The New Ordinary Shares issued pursuant to the Initial Issue will, following Initial Admission, rank pari passu in all respects with the existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid in respect of the Ordinary Shares by reference to a record date after Initial Admission.

The price at which New Ordinary Shares will be issued pursuant to the Initial Issue will be the Net Asset Value (cum-income) of the existing Ordinary Shares at the close of business on 15 June 2021 (or such other date to be determined and which will be announced via a Regulatory Information Service) together with a premium of 2 per cent.

Initial Placing

Peel Hunt has agreed to use its reasonable endeavours to procure subscribers for New Ordinary Shares pursuant to the Initial Placing. The terms and conditions that shall apply to any subscription for New Ordinary Shares pursuant to the Initial Placing will be set out in the Prospectus.

Offer for Subscription

The Directors are also proposing to offer New Ordinary Shares under the Offer for Subscription, subject to the terms and conditions to be set out in the Prospectus. The Offer for Subscription will be made available in the United Kingdom, Guernsey, Jersey and the Isle of Man. Individual applications must be for a minimum subscription of £1,000 and then in multiples of £1,000 thereafter, although the Board has discretion to accept applications below these minimum amounts. Multiple subscriptions under the Offer for Subscription by individual investors will not be accepted.

Intermediaries Offer

Prospective investors may also subscribe for New Ordinary Shares pursuant to the Intermediaries Offer. Only the Intermediaries' retail investor clients in the United Kingdom, Guernsey, Jersey and the Isle of Man are eligible to participate in the Intermediaries Offer. Investors may apply to any one of the Intermediaries to be accepted as their client.

No New Ordinary Shares allocated under the Intermediaries Offer will be registered in the name of any person whose registered address is outside the United Kingdom, the Channel Islands or the Isle of Man. A minimum application of £1,000 per Underlying Applicant will apply and thereafter an Underlying Applicant may apply for any higher amount. Allocations to Intermediaries will be determined solely by the Company (following consultation with Peel Hunt, in its capacity as intermediaries offer adviser).

Share Issuance Programme

Following the Initial Issue, the Company may raise additional capital pursuant to Subsequent Issues under the Share Issuance Programme in the 12 months following publication of the Prospectus for the purpose of investment in accordance with the investment policy and objective of the Company and with a view to delivering further value for Shareholders.

The Directors have gained authority at the General Meeting to allot up to 125,000,000 New Ordinary Shares pursuant to the Initial Issue and the Share Issuance Programme. Assuming 32,113,038 New Ordinary Shares are issued pursuant to the Initial Issue, the Directors will be authorised to issue a further 92,886,962 New Ordinary Shares pursuant to Subsequent Issues under the Share Issuance Programme. However, the number of New Ordinary Shares available under the Share Issuance Programme is intended to be flexible and should not be taken as an indication of the number of shares to be issued (which will depend on investor demand, the wider investment market, and the Company's ability to source attractive investment opportunities in this market).

Any New Ordinary Shares issued pursuant to the Share Issuance Programme will, following the relevant Admission, rank pari passu in all respects with the Ordinary Shares then in issue and will carry the right to receive all dividends and distributions declared, made or paid in respect of the Ordinary Shares by reference to a record date after the relevant Admission.

The Share Issuance Programme may be implemented by a series of placings, the terms and conditions of which will be set out in the Prospectus, and/or by way of open offers, offers for subscription and/or intermediaries offers, the terms of which will be published at the time of such open offers, offers for subscription or intermediaries offers . The issue of New Ordinary Shares pursuant to the Share Issuance Programme will be at the discretion of the Directors.

The price at which New Ordinary Shares will be issued pursuant to a Subsequent Issue under the Share Issuance Programme will be determined by the Company and will be not less than the prevailing Net Asset Value per Ordinary Share at the time of issue plus a premium to cover the costs and expenses of such issue. Further information on the Share Issuance Programme will be set out in the Prospectus.

Expected Timetable

Initial Issue	2021
Initial Issue opens	28 May
Latest time and date for receipt of completed Application Forms in respect of the Offer for Subscription	1.00 p.m. on 15 June
Latest time and date for receipt of completed applications from the Intermediaries in respect of the Intermediaries Offer	3.00 p.m. on 15 June
Latest time and date for commitments under the Initial Placing	5.00 p.m. on 15 June
Publication of results of the Initial Issue	16 June
Initial Admission and dealings in Ordinary Shares issued pursuant to the Initial Issue commence	8.00 a.m. on 18 June
CREST accounts credited with uncertificated Ordinary Shares issued pursuant to the Initial Issue	As soon as practicable after 8.00 a.m. on 18 June
Where applicable, definitive share certificates in respect of the Ordinary Shares issued pursuant to the Initial Issue despatched by post in the week commencing*	28 June
* Underlying Applicants who apply to Intermediaries for Ordinary Shares under the Intermediaries Offer will not receive share certificates.
Subsequent Issues under the Share Issuance Programme
Subsequent Issues under the Share Issuance Programme	between 21 June 2021 and  27 May 2022
Publication of Share Issuance Programme Price in respect of each Subsequent Issue	as soon as practicable in conjunction with a Subsequent Issue
Announcement of the results of each Subsequent Issue	as soon as practicable following the closing of a Subsequent Issue
Subsequent Admission and crediting of CREST accounts in respect of each Subsequent Issue	as soon as practicable following the allotment of Ordinary Shares pursuant to a Subsequent Issue
Definitive share certificates in respect of the Ordinary Shares issued pursuant to each Subsequent Issue despatched by post	approximately one week following the Subsequent Admission of any Ordinary Shares pursuant to a Subsequent Issue

Any changes to the expected timetable set out above will be notified by the Company through a Regulatory Information Service.

Terms not otherwise defined in this announcement have the meanings that will be given to them in the Prospectus.

Enquiries:

PraxisIFM Fund Services (UK) Limited

Brian Smith, Imogen Kerr

020 7653 9690

Peel Hunt LLP

Luke Simpson, Liz Yong, Huw Jeremy, Tom Pocock (Investment Banking)

Alex Howe, Chris Bunstead, Ed Welsby, Richard Harris (Sales)

Alistair Boyle (Intermediaries)

Sohail Akbar (Syndicate)

020 7418 8900

About the Investment Manager and the Investment Adviser

The Investment Manager

The Company has entered into an Investment Management Agreement with Acorn Asset Management Ltd, the Company's Investment Manager, under which the Investment Manager is responsible for the discretionary management of the Company's assets. The Investment Manager has also been appointed as the Company's AIFM for the purposes of the AIFM Rules.

The Investment Manager is a private company with limited liability incorporated under the laws of Mauritius whose principal objective is to conduct the business of an investment manager. The Investment Manager is authorised and regulated by the Financial Services Commission ("FSC") in Mauritius and holds a Category 1 Global Business licence, a CIS Manager Licence and an Investment Advisor (Unrestricted) Licence issued by the FSC. The Investment Manager has registered as a Category I FPI under the FPI Regulations. As at 30 April 2021, the Investment Manager had total assets under management of approximately US$458 million.

The Investment Manager is also the investment manager of India Acorn Fund, a private fund organised as a public limited company in Mauritius and authorised as an Expert Fund under the Mauritian Securities (Collective Investment Scheme and Closed-End Fund) Regulations 2008. India Acorn Fund's primary objective is to achieve long-term capital appreciation through investment in securities listed on any recognised stock exchange in India and listed equity shares of companies having a significant presence in India. As at 30 April 2021, India Acorn Fund had net assets of approximately US$289 million.

The Investment Manager has appointed the Investment Adviser to provide investment advisory services to it in relation to the Company and its portfolio as described under the heading "Investment Adviser" below.

The Investment Adviser

As permitted by the terms of the Investment Management Agreement, the Investment Manager has, with the consent of the Company, appointed the Investment Adviser, White Oak Capital Management Consultants LLP, a boutique investment advisory firm in India, to provide certain non-binding, non-exclusive and recommendatory investment advisory services to it.

The Investment Adviser is regulated by the Securities and Exchange Board of India (SEBI) and is registered as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations, 2020 and as an Investment Adviser under the SEBI (Investment Advisers) Regulations, 2013.

The key individuals at the Investment Adviser include:

Ramesh Mantri, CFA (Senior Investment Analyst)

Ramesh has 17 years of valuable experience of investing and financial analysis across sectors. Ramesh founded Ashoka Capital Advisers, which advised a fund and family offices on equity investments in South Asia. Prior to this, he was part of a two-member team that invested in South Asian equity and debt for Alden Global Capital, a US based hedge fund, for over 7 years. Prior to this he was an analyst at CRISIL, India's leading rating agency and majority-owned by Standard & Poor's, covering the financial sector.

Ramesh is a CFA charter holder, received an MBA from the Faculty of Management Studies, Delhi, and has passed the Chartered Accountancy course.

Parag Jariwala, CFA (Senior Investment Analyst)

Parag has over 13 years of rich experience of institutional equity research in the banking and financial services institutions (BFSI) sector. Prior to joining the Investment Adviser, he worked as a lead analyst with Religare Capital. Before that he worked with Macquarie and other brokerage firms covering the BFSI sector. He was highly rated by marquee institutional clients for his original thinking and primary research.

Parag is a Chartered Accountant under the Institute of Chartered Accountants of India (ICAI). He received his MBA from the K J Somaiya Institute of Management, Mumbai University. He also holds a CFA charter from the CFA Institute (AIMR).

Rishi Maheshwari (Senior Investment Analyst)

Rishi has 16 years of private equity and investment banking experience gained in the US, India and the Middle East. Prior to his current role, he served as a Managing Director of the Abraaj Group's deal execution team in South Asia. His responsibilities included investment strategy development, local relationship management (including regulators), deal sourcing & execution and portfolio monitoring (including board participation). Prior to joining Abraaj, he worked in the Investment Banking Division at Goldman Sachs in New York & Chicago before moving to India as a part of Goldman's start-up team. At Goldman Sachs, Mr. Maheshwari was a part of the Industrials Group and was involved in various transactions, including sell-side and buy-side M&A transactions, bank & bond financings and equity offerings. Additionally, he assisted the Executive Office in various capacities regarding India operations. Mr. Maheshwari holds a Bachelor of Science degree in Finance from Indiana University, Bloomington.

Rohit Chordia (Senior Investment Analyst)

Rohit has over 16 years of total experience with over 14 years in the investment industry, having covered the Indian Telecom, Consumers and IT services sectors as a sell-side analyst at Kotak Institutional Equities. Rohit was consistently ranked amongst the top analysts in both his lead coverage sectors in polls conducted by Institutional Investor and Asia Money. Prior to his sell-side stint, Rohit spent a couple of years working with Ameriprise Financial as a financial analyst on areas like competitive intelligence and cost reengineering.

Rohit holds a Post Graduate Diploma in Management from IIM Calcutta and a B.E. (Honours) degree from BITS, Pilani.

Directors of the Company

The Directors are as follows:

Andrew Watkins (Chairman)

Andrew has over 30 years' experience in the investment companies sector in senior sales and client relations positions with Robert Fleming, Jupiter and Invesco Perpetual, retiring from full-time employment in June 2017. He is a current non-executive director of BMO UK High Income Trust plc, Chelverton UK Dividend Trust plc, Baillie Gifford European Growth Trust plc and Consistent Unit Trust Management Company Limited.

Jamie Skinner (Chair of the Audit Committee)

Jamie Skinner is a qualified accountant and a fellow of the Chartered Institute for Securities and Investment. Jamie joined Cazenove & Co in 1989 as a corporate finance executive working principally on investment companies and also other sector IPO activity, and in 1995 he was appointed Managing Director of the Johannesburg office. In 1999 Jamie joined Martin Currie Investment Management limited as a director and in 2014 was appointed Head of Client Services. Jamie retired from Martin Currie at the end of July 2018. Jamie served as President and CEO of The China Fund, Inc. until 2012, President and CEO of The Taiwan Fund, Inc. until 2014 and President of the Martin Currie Business Trust until 2015. Jamie was appointed to the board of Martin Currie, Inc. in March 2013 and to the board of the Martin Currie Japan Absolute Return Fund in January 2016, retiring from these roles on 17 May 2018 and 10 May 2018 respectively. Jamie is currently a non-executive director of Ediston Property Investment Company plc, the Asian Opportunities Absolute Return Fund Limited and Baillie Gifford Shin Nippon plc.

Dr. Jerome Booth (Chair of the Nomination Committee)

Dr. Jerome Booth is a well-known economist and leading expert on emerging markets. Jerome has a D.Phil and an M.Phil in Economics from the University of Oxford as well as a B.Sc in Geography from the University of Bristol. In 2013, Jerome retired from Ashmore Group, a world leading emerging markets asset management group that he helped establish in 1999 in a management buyout from ANZ Bank. Prior to ANZ, he worked in the Strategic Planning unit of the Inter-American Development Bank from 1991 to 1994 in Washington, D.C. Prior to this, Jerome had appointments as a Lecturer in Economics at Christ Church, Oxford, a consultancy business advising on aid issues, and a position in the mid-1980s in Her Majesty's Department of Trade and Industry.

Jerome is Chairman of the Britten Sinfonia and sits on the board of the Royal Philharmonic Society. He also sits on the Board of Trustees of the Global Warming Policy Foundation. He previously served as Chairman of the Governing Board of Anglia Ruskin University, retiring from this position on 31 July 2020.

Rita Dhut (Chair of the Management Engagement Committee)

Rita Dhut has over 25 years of varied investment experience having gained industry recognition and multiple awards during her fund management career. In 1994 she joined M&G Investment Management as UK Equity Fund Manager before being appointed Director of European Equities. In 2001 she joined Aviva Investors, was appointed Head of European Equities in 2004 and in 2006 became Head of UK & European Equity for value based investment responsible for over £6 billion of equity funds. Rita left Aviva Investors in 2012 to set up her own company, Practical Dialogue Ltd, to work with investment boards and fund managers on oversight and risk management of funds. Rita is now an active investor in, and advisor to, early stage companies, holding several board positions. She is on the investment committee for Newable's range of Scale Up funds investing in this area. She also is a non-executive director of JP Morgan European Investment Trust plc.

Rita has pursued other personal interests close to her heart and is currently a Member of Council, a Member of the Investment and Audit committees for the Girls' Day School Trust and a Trustee of the charity All Change. She is an associate of the CFA Institute and a graduate of City University, London.

Key risks specific to the Company and Securities

The attention of investors is drawn to the key risks specific to the Company and an investment in the Ordinary Shares, which include the risks set out below. Further details of the material risks relating to the Company and an investment in the Ordinary Shares will be set out in the Prospectus. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of the information in the Prospectus. No reliance should be placed on this announcement. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested.

• There can be no guarantee that the Company will achieve its investment objective or that investors will get back the amount of their original investment. The Company has a limited operating history and investors have a limited basis on which to evaluate the Company's ability to achieve its investment objective. The past performance of the Company cannot be relied upon as an indicator of its future performance.

• The ongoing COVID-19 pandemic has created considerable uncertainty for the UK and Indian economies, and the companies in which the Company invests, and has contributed to significant volatility in global equity and debt markets. The long-term impacts of the outbreak are unknown and rapidly evolving. There is no assurance that the outbreak will not have a material adverse impact on the future results of the Company.

• The Company may use gearing to seek to enhance investment returns. Whilst the use of gearing should enhance the total return on the Ordinary Shares where the return on the Company's underlying assets is rising and exceeds the cost of gearing, it will have the opposite effect where the return on the Company's underlying assets is rising at a lower rate than the cost of gearing or where such return is falling.

• The Investment Manager is reliant on the services of the Investment Adviser. A failure by the Investment Adviser to perform in accordance with its appointment, or to retain key personnel, may have an impact on the Investment Manager's performance, which could have a material adverse effect on the Company's profitability, Net Asset Value and the price of the Ordinary Shares.

• The Company invests in India. Investments in India may include a higher element of risk compared to more developed markets and the value of the Company's investments may be adversely affected by potential political and social uncertainties in India. Certain developments, beyond the control of the Company, such as the possibility of nationalisation, expropriations, confiscatory taxation, political changes, government regulation, social and civil unrest, diplomatic disputes or other similar developments, could adversely affect the Company's investments.

• While the Company will typically invest no more than 40 per cent. of Gross Assets in any single sector (calculated at the time of investment), the Company has no hard limit on the amount it may invest in any sector and may have significant exposure to portfolio companies in certain business sectors from time to time. Greater concentration of investments in any one sector may result in greater volatility in the value of the Company's investments and may materially and adversely affect the performance of the Company.

• Certain governmental approvals in India (such as the Company's registration under the Foreign Portfolio Investor ("FPI") regime) must be maintained for the Company to continue to make portfolio investments in India. Although the Company expects to maintain these approvals, there can be no certainty of this. Should the Company be unable to make portfolio investments in India, this may adversely affect the Company's performance and value.

• As the Company invests predominantly in Indian securities, it invests in securities that are denominated in a currency other than Sterling, the Company's base currency, and in companies whose operations are conducted in currencies other than Sterling. The Company therefore has an exposure to foreign exchange rate risk (in particular the Sterling/Rupee exchange rate) which may increase the volatility of the NAV per Ordinary Share.

• The Company may utilise derivative instruments for gearing and investment purposes and may also use derivative instruments for efficient portfolio management. Such instruments inherently contain much greater leverage than a non-margined purchase of the underlying security or instrument. As a result, small changes in the value of the underlying assets may cause a relatively large change in the Net Asset Value of the Company. Derivative transactions may also expose the Company to the creditworthiness of counterparties and their ability to satisfy the terms of such contracts.

• Although it is intended that the Company's portfolio will continue to primarily comprise listed securities, the Company may invest up to 10 per cent. of Gross Assets (calculated at the time of investment) in unquoted securities. Such investments, by their nature, involve a higher degree of risk than investments in publicly traded securities. Unquoted securities are likely to be less liquid than publicly traded securities and can also be more difficult to value. In addition, the Company may become subject to regulatory lock-in periods under Indian law if any of its unquoted holdings go public, which would restrict the Company's ability to dispose of such investments during the regulatory lock-in period (being one year from the date of the IPO or three years in the case of 'promoters' of the IPO) and further increase the illiquidity of the Company's portfolio.

• Any change in the Company's tax status or in taxation legislation or practice generally could adversely affect the value of the investments held by the Company, or the Company's ability to provide returns to Shareholders, or alter the post-tax returns to Shareholders.

• The value of the Ordinary Shares can fluctuate and may go down as well as up and an investor may not get back the amount invested. The market price of the Ordinary Shares, like shares in all investment trusts, may fluctuate independently of their underlying Net Asset Value and may trade at a discount or premium at different times, depending on factors such as supply and demand for the Ordinary Shares, market conditions and general investor sentiment.

• There can be no guarantee that a liquid market in the Ordinary Shares will exist. Accordingly, Shareholders may be unable to realise their Ordinary Shares at the quoted market price or at all.

• Shareholders should be aware that the operation of the Company's redemption facility, which is entirely at the discretion of the Directors, may lead to a more concentrated and less liquid portfolio which may adversely affect the Company's performance and value. Further, redemptions may also adversely affect the secondary market liquidity of the Ordinary Shares.

• The Company may issue new equity in the future pursuant to the Share Issuance Programme or otherwise. Where statutory pre-emption rights are disapplied, any additional equity financing will be dilutive to those Shareholders who cannot, or choose not to, participate in such financing.

Disclaimer

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Peel Hunt LLP solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Approval of the Prospectus by the Financial Conduct Authority ("FCA") (if obtained) should not be understood as an endorsement of the securities that are the subject of the Prospectus. Potential investors are recommended to read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with a decision to invest in the New Ordinary Shares.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated by the Financial Conduct Authority, is acting for the Company only in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Peel Hunt or advice to any other person in relation to the matters contained herein.

The shares of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 (as amended) (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold into or within the United States, absent registration, except pursuant to an applicable exemption from, or in a transaction that is not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. Moreover, the shares of the Company have not been, nor will they be, registered under the applicable securities laws of India, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA. Further, the Company is not, and will not be, registered under the US Investment Company Act of 1940, as amended. The shares of the Company may be offered outside of the United States pursuant to the provisions of Regulation S of the Securities Act. Subject to certain exceptions, the shares of the Company may not be offered or sold in India, the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states for which marketing approval has been obtained) or to, or for the account or benefit of, any national, resident or citizen of India, the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states for which marketing approval has been obtained). The distribution of this announcement, in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

None of the Company, Acorn Asset Management Ltd (the "Investment Manager"), White Oak Capital Management Consultants LLP (the "Investment Adviser") or Peel Hunt, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, the Investment Manager, the Investment Adviser and Peel Hunt, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) the UK's implementation of EU Directive 2014/65/EU on markets in financial instruments, as amended ("UK MiFID II"); and (b) the UK's implementation of Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing UK MiFID II, and in particular Chapter 3 of the Product Intervention and Product Governance Sourcebook of the FCA (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in UK MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by UK MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors (such term to have the same meaning as in the MiFID II Product Governance Requirements) should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Share Issuance Programme (including the Initial Issue). Furthermore, it is noted that, notwithstanding the Target Market Assessment, Peel Hunt will only procure investors pursuant to the Share Issuance Programme (including the Initial Issue) who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of UK MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.

 

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