Net Asset Value Daily Estimate

RNS Number : 2820A

India Capital Growth Fund Limited

06 June 2016

 

6 June 2016

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

Net Asset Value statement at 31 May 2016

Net Asset Value

The Company announces its Net Asset Value per share as at 31 May 2016 was 81.75 pence.

The Net Asset Value (NAV) was up 3.4% in Sterling terms, whilst the BSE Mid Cap Index was up 1.6%, delivering an outperformance against the notional benchmark of 1.8%. Against Ocean Dial's Composite Index, ICGF outperformed by 1.7%. In local currency terms, the NAV was up 4.7% for the month.

The Company also announces its fully diluted NAV per share as at 31 May 2016 was 74.83 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 was driven predominantly in the industrials sector where Kajaria Ceramics, Finolex Cables and Voltas all contributed meaningfully to performance. Elsewhere Tech Mahindra and KIPT in the IT sector performed strongly as did Motherson Sumi and Exide both beneficiaries of momentum in the automotive sector. Lupin in healthcare, and Jyothy Laboratories in staples fell in absolute terms offsetting the rest.

Market and economic update

May was an impressive month for Indian equities, comfortably outperforming both emerging and global indices and recovering much of the underperformance suffered since the start of the year. The main board stocks (BSE Sensex) rose 4.1%, whilst mid caps (BSE Mid Cap) also rallied, but less so, up by 2.9%. Foreign Institutions continued to be net buyers of the market. Over the month the Indian currency fell 1.67% against the US Dollar and 1.35% against Sterling.

The market has had much to digest this month and with few exceptions the news has been equity supportive. The BJP Government won an unexpected victory in the NE state of Assam restoring confidence following losses in Delhi and Bihar, and establishing a presence in an arena hitherto considered unwinnable. These results, in conjunction with more misery for the Congress Party, suggest the "reform agenda" may meet fewer stumbling blocks looking forward. Indeed successful passage of the Bankruptcy Law affirms this, and we are optimistic of further progress in this session of Parliament. Profound changes to the double taxation treaty with Mauritius were announced, and whilst these are likely to impact investors' returns negatively at the margin from 2019, they were "responsibly" handled by the Government with no initial market impact.

Full year GDP growth for fiscal 2016 came in at 7.6%, a 0.4% improvement on FY15, boosted by a stronger than projected 4^th quarter. Better than expected manufacturing and consumption data delivered the incremental positive surprise, and although some scepticism over the quality of the data remains, there is irrefutable evidence of a recovery in an increasing range of economic data. Corporate results have also surprised positively led by domestic sectors, but supported by globally linked sectors where better commodity price performance has somewhat alleviated downward pressure on earnings. Public Sector Banks linger at the forefront of investors' worries but here too the mist is clearing. Sentiment remains globally correlated.

Portfolio analysis by sector as at 31 May 2016
Sector	No. of Companies	% of Portfolio
Financials	10	27.7%
Materials	7	17.2%
Consumer Discretionary	5	13.2%
Industrials	5	13.2%
Healthcare	5	9.1%
Consumer Staples	4	8.7%
IT	3	6.8%
Total Equity Investment	39	95.9%
Net Cash		4.1%
Total Portfolio	39	100.0%
Top 20 holdings as at 31 May 2016
Holding	Sector	% of Portfolio
Yes Bank	Financials	5.1%
Kajaria Ceramics	Industrials	4.3%
Federal Bank	Financials	4.2%
Indusind Bank	Financials	4.0%
Jyothy Laboratories	Consumer Staples	3.9%
Dewan Housing	Financials	3.8%
PI Industries	Materials	3.8%
Divis Laboratories	Healthcare	3.5%
City Union	Financials	3.5%
The Ramco Cements	Materials	3.3%
Exide Industries	Consumer Discretionary	3.3%
Berger Paints India	Materials	3.3%
Finolex Cables	Industrials	3.2%
Motherson Sumi Systems	Consumer Discretionary	3.2%
Dish TV India	Consumer Discretionary	2.9%
Tech Mahindra	IT	2.8%
Sobha Developers	Financials	2.7%
Essel Propack	Materials	2.5%
Emami	Consumer Staples	2.4%
Max Financial Services	Financials	2.4%
Portfolio analysis by market capitalisation size as 31 May 2016
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap < INR60bn)	17	30.6%
Mid Cap (INR60bn < M/Cap < INR250bn)	15	42.7%
Large Cap (M/Cap > INR250bn)	7	22.6%
Total Equity Investment	39	95.9%
Net Cash		4.1%
Total Portfolio	39	100.0%

 

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