Net Asset Value(s)

RNS Number : 2716E

India Capital Growth Fund Limited

06 February 2015

 



6 February 2015

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

Net Asset Value statement at 31 January 2015

Net Asset Value

The Company announces its Net Asset Value per share as at 31 January 2015 was 82.99 pence.

In January the Net Asset Value (NAV) was up 11.6%, whilst the BSE Mid Cap Index was up 9.6%, delivering an out performance against the notional benchmark of 2.0%, all in Sterling terms. Against Ocean Dial's Composite Index, ICGF out performed by 1.4%. In local currency terms, the NAV increased 5.4% for the month.

The Company also announces its fully diluted NAV per share as at 31 January 2015 was 75.66 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 to the portfolio's performance came from Dewan Housing (up 19.3%), Kajaria Ceramics (up 22.7%), Max India (up 19.8%) and Emami (up 16.9%). Negative attribution came from Indian Bank (down 14.8%), Federal Bank (down 6.5%) and NIIT Tech (down 5.5%).

Market and economic update

January was a strong month for the Indian equity markets. In Rupee terms, the BSE Sensex was up 6.1% whilst the BSE Mid Cap Index rose 3.5% primarily driven by an earlier than expected rate cut of 25bps by the Reserve Bank of India (RBI), three weeks before a scheduled policy meeting.

The positive impact this had on sentiment was reflected in the performance of the currency which appreciated 5.5% against Sterling and 1.9% against the US Dollar. Since July 2014, inflation has been below its expected trajectory to the extent that in December it breached the RBI's January 2016 CPI target of 6%, coming in at 5.0%. This has primarily been driven by falling global commodity prices, weak demand across multiple sectors, muted industrial activity and lower food and vegetable prices.

The RBI's February monetary policy kept the rate unchanged but reduced the Statutory Liquidity Ratio by 50bps to 21.5% to encourage banks to expand credit. It stated that the "key to further easing is data that confirms continuing disinflationary pressures. Also critical would be sustained high quality fiscal consolidation". Although the RBI will be measured in its approach to cutting rates, and moreover this will take time to feed through to a significant drop in borrowing costs for individuals and companies, it has however signalled an important directional shift in the monetary policy.

In the results announced thus far for the third quarter of FY15, Financials (predominantly public sector banks) disappointed on asset quality, large cap IT Services companies beat expectations, whilst mid cap companies were in line with expectations. Consumer Staples companies reported slowing revenue growth but improved margin performance.

Portfolio analysis by sector as at 31 January 2015
Sector	No. of Companies	% of Portfolio
Industrials	10	28.1%
Financials	7	22.0%
Consumer Staples	4	10.4%
Materials	4	9.5%
Healthcare	4	9.4%
Consumer Discretionary	3	9.1%
IT	3	8.4%
Energy	1	1.2%
Total Equity Investment	36	98.1%
Net Cash		1.9%
Total Portfolio	36	100.0%
Top 20 holdings as at 31 January 2015
Holding	Sector	% of Portfolio
Federal Bank	Financials	4.9%
Dewan Housing	Financials	4.3%
Motherson Sumi Systems	Consumer Discretionary	4.3%
Jyothy Laboratories	Consumer Staples	3.9%
Tech Mahindra	IT	3.9%
Yes Bank	Financials	3.6%
Kajaria Ceramics	Industrials	3.6%
Max India	Industrials	3.5%
Emami	Consumer Staples	3.2%
Eicher Motors	Industrials	3.1%
Indusind Bank	Financials	3.0%
Exide	Industrials	3.0%
PI Industries	Materials	2.8%
Gujarat Pipavav	Industrials	2.8%
Lupin	Healthcare	2.8%
Berger Paints India	Materials	2.8%
Divi's Laboratories	Healthcare	2.8%
Dish TV India	Consumer Discretionary	2.7%
Balkrishna	Industrials	2.6%
Finolex Cables	Industrials	2.6%
Portfolio analysis by market capitalisation size as 31 January 2015
Market capitalisation size	No. of Companies	% of Portfolio
Small Cap (M/Cap <INR60bn)	10	23.0%
Mid Cap (INR60bn <M/Cap<INR250bn)	16	48.8%
Large Cap (M/Cap > INR250bn)	8	26.3%
Total Equity Investment	34	98.1%
Net Cash		1.9%
Total Portfolio	34	100.0%

 

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