Net Asset Value(s)

RNS Number : 4826L

India Capital Growth Fund Limited

04 July 2014

 



4 July 2014

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

Net Asset Value statement at 30 June 2014

Net Asset Value

The Company announces its Net Asset Value per share as at 30 June 2014 was 60.12 pence.

In June the Net Asset Value (NAV) was up 4.6% in Sterling terms, whilst the BSE Mid Cap Index was up 7.1%, delivering an under performance against the notional benchmark of 2.5%. Against Ocean Dial's Composite Index, ICGF underperformed by 1.1%. In local currency terms, the NAV increased 8.2% for the month.

Portfolio update

With the exception of Telecoms, all sectors contributed positively this month. Positive attribution to the portfolio's performance came from Dewan Housing (up 19.6%), Federal Bank (up 15%), Eicher Motors (up 19.8%) and Tech Mahindra (up 11.9%). Negative attribution came from Jyothy Labs (down 6.5%), Yes Bank (down 5%) and Gujarat Pipavav Port (down 7.3%).

Market and Economic Update

Indian equity markets continue to re-rate, led by expectations of a surge in reforms and the expectation of an economic recovery to follow. The BSE Sensex rose 4.9% in the month whilst the BSE Mid Cap Index rallied 10.8%. Foreign Institutional Inflows ("FII's") reached US$1.8bn reinforced by positive flows from domestic institutions. In spite of this the currency fell 3.5% against Sterling and 1.8% against the US Dollar on concerns that an upsurge in crude oil prices would hamper an improving current account deficit. In addition the Reserve Bank of India ("RBI") has been selling Rupees in order to increase foreign exchange reserves.

In its bi-monthly monetary policy review this month the RBI left monetary policy rates unchanged, but cut the banks' statutory liquidity requirements by 0.5%. This is intended to improve liquidity and ensure that banks have the capacity to expand credit to the corporate sector when the demand picks up. The Governor's dovish tone on inflation raised expectations that the RBI could even ease monetary policy as early as this year if CPI inflation continued to soften. However, an overdue monsoon, concerns over "El Nino", and heightened Middle East tension are all risks that may stymie this.

Prior to the Union Budget, which is expected in mid-July, the new Government has announced fare increases in passenger and freight rates and an extension of excise cuts in automobiles, consumer durables and capital goods. This is good news and suggests that the Government will use the budget to balance growth and fiscal consolidation. 

Market Capitalisation Definitions

The Directors have approved a change in the parameters which the Company uses to define Small, Mid and Large Cap companies in the context of Indian equity markets. Historically a mid-cap company has been defined as being capitalised at between INR15bn and INR100bn or approximately GBP150m and GBP1bn. The Directors now feel that it is more appropriate to define a mid-cap company as being capitalised at between INR60bn and INR250bn or approximately GBP600m and GBP2.5bn. The Directors will continue to monitor this on a regular basis.

Portfolio analysis by sector as at 30 June 2014
Sector	No. of Companies	% of Portfolio
Financials	9	26.8%
Industrials	10	24.5%
IT	5	12.0%
Healthcare	4	9.1%
Consumer Staples	4	8.8%
Materials	3	7.4%
Consumer Discretionary	2	6.7%
Energy	0	0.0%
Telecommunications	0	0.0%
Total Equity Investment	37	95.3%
Net Cash		4.7%
Total Portfolio	37	100.0%
Top 20 holdings as at 30 June 2014
Holding	Sector	% of Portfolio
Federal Bank	Financials	5.4%
Dewan Housing	Financials	4.5%
Tech Mahindra	IT	4.0%
Motherson Sumi Systems	Consumer Discretionary	4.0%
Kajaria Ceramics	Industrials	3.9%
KPIT Cummins Infosystems	IT	3.6%
Jyothy Laboratories	Consumer Staples	3.5%
Eicher Motors	Industrials	3.4%
Yes Bank	Financials	3.2%
Divi's Laboratories	Healthcare	3.1%
NIIT Technologies	IT	3.0%
Sobha Developers	Financials	3.0%
Jammu & Kashmir Bank	Financials	3.0%
IPCA Laboratories	Healthcare	2.9%
PI Industries	Materials	2.8%
Indusind Bank	Financials	2.8%
Max India	Industrials	2.7%
Indian Bank	Financials	2.7%
Dish TV India	Consumer Discretionary	2.7%
Emami	Consumer Staples	2.6%
Portfolio analysis by market capitalisation size as 30 June 2014
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	14	33.2%
Mid Cap (INR60bn <M/Cap<INR250bn)	16	43.1%
Large Cap (M/Cap > INR250bn)	7	19.0%
Unlisted	0	0.0%
Total Equity Investment	37	95.3%
Net Cash		4.7%
Total Portfolio	37	100.0%

 

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