India Capital Growth Fund Limited Net Asset Value(s) (1603D)
October 05 2018 - 6:28AM
UK Regulatory
TIDMIGC
RNS Number : 1603D
India Capital Growth Fund Limited
05 October 2018
5 October 2018
India Capital Growth Fund Limited (the "Company" or "ICGF")
Net Asset Value statement at 30 September 2018
Net Asset Value
The Company announces its Net Asset Value (NAV) per share as at
30 September 2018 was 92.55 pence.
In September the NAV was down 17.2% in Sterling terms, whilst
the BSE Mid Cap TR Index was down 14.8%, delivering an under
performance against the notional benchmark of 2.4%. In local
currency terms, the NAV was down 14.9% for the month.
Portfolio update
Positive contribution to the portfolio's performance came from
Aurobindo Pharma (up 4.5%) and Divi's Laboratories (up 0.4%).
Negative contribution came from Dewan Housing Finance (down 58.8%),
Yes Bank (down 46.5%) and Radico Khaitan (down 29.7%).
Market and economic update
Indian equity markets corrected sharply in September with the
BSE Sensex down 6.3% and BSE Mid Cap Index down 12.4%. Heavy
selling pressure was prompted by rising concerns over deteriorating
credit quality and tightening liquidity issues in the non-banking
finance segment. The initial fear that contagion would spread to
the broader financial sector was quelled, as both the Government
and the Reserve Bank of India (RBI) acted quickly to stem the
uncertainty, and a modicum of stability returned to markets.
However this, combined with Brent crude oil continuing its upward
path, alongside ongoing currency weakness (the Indian Rupee fell
2.1% against Sterling and 2.8% against the US Dollar), continues to
dent market sentiment. Foreign Institutions were net sellers
(US$1.3bn for the month) whilst Domestic Institutions were net
buyers (US$1.7bn for the month).
Two events triggered the equity selloff. The unlisted, quasi
Government owned, Infrastructure Leasing and Financials Services
(IL&FS), unexpectedly defaulted on its short term commercial
paper. This caused an immediate liquidity tightening in the
commercial paper market with the knock on effect spreading to other
borrowers. The Board of IL&FS was immediately sacked by the
Finance Ministry and replaced with a team of prominent "names" led
by Uday Kotak, whilst the Government committed to stand behind the
Company's outstanding liabilities until a liquidity injection
occurs. In the same week the RBI curtailed the extension of Rana
Kapoor's tenure as the CEO of Yes Bank (mkt cap US$6.5bn) owing to
deep rooted concerns that Yes Bank has been under stating asset
quality issues. This is the third instance of forced change in
senior management of a private sector bank as the Regulator takes a
tougher stance. In further moves, the RBI eased short term
liquidity requirements of the banks to infuse cash into system.
This, along with other monetary measures, has increased overall
liquidity and short term rates are stabilising across various
funding channels. Today the RBI announced rates were unchanged at
6.5%.
Portfolio analysis by sector as at 30 September 2018
Sector No. of Companies % of Portfolio
Financials 8 19.8%
Materials 8 19.3%
Consumer Discretionary 6 15.0%
Consumer Staples 4 9.9%
IT 2 8.5%
Industrials 4 8.4%
Healthcare 3 7.4%
Real Estate 2 2.7%
Communication Services 2 0.7%
Total Equity Investment 39 91.6%
Net Cash 8.4%
Total Portfolio 39 100.0%
Top 20 holdings as at 30 September 2018
Holding Sector % of Portfolio
Tech Mahindra IT 4.9%
Jyothy Laboratories Consumer Staples 4.1%
City Union Bank Financials 4.1%
Ramkrishna Forgings Materials 4.0%
Motherson Sumi Systems Consumer Discretionary 3.8%
Federal Bank Financials 3.6%
NIIT Technologies IT 3.6%
Exide Industries Consumer Discretionary 3.3%
Divi's Laboratories Healthcare 3.3%
Indusind Bank Financials 3.3%
Aurobindo Pharma Healthcare 3.2%
Welspun India Consumer Discretionary 3.0%
Berger Paints India Materials 2.9%
Kajaria Ceramics Industrials 2.9%
Balkrishna Industries Consumer Discretionary 2.8%
PI Industries Materials 2.7%
Radico Khaitan Consumer Staples 2.7%
Finolex Cables Industrials 2.7%
Capital First Financials 2.5%
Sobha Developers Real Estate 2.5%
Portfolio analysis by market capitalisation size as 30 September
Market capitalisation size No. of Companies % of Portfolio
Small Cap (M/Cap < US$2bn) 28 59.0%
Mid Cap (US$2bn < M/Cap < US$7bn) 8 20.7%
Large Cap (M/Cap > US$7bn) 3 12.0%
Total Equity Investment 39 91.6%
Net Cash 8.4%
Total Portfolio 39 100.0%
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END
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