Last checked at 
7 Jun 2019 09:08
7 June 2019
India Capital Growth Fund Limited (the "Company" or "ICGF")
Net Asset Value statement at 31 May 2019
Net Asset Value
The Company announces its Net Asset Value per share as at 31 May 2019 was 102.24 pence.
In May the Net Asset Value (NAV) was up slightly (0.2%) in Sterling terms, whilst the BSE Mid Cap TR Index was up 4.1%, delivering under performance against the notional benchmark of 3.9%. In local currency terms, the NAV was down 2.4% for the month.
Portfolio update
Positive contribution to the portfolio's performance came from Federal Bank (up 15.7%), PI Industries (up 8.9%) and Sobha Developers (up 13.4%). Negative contribution came from Manpasand Beverages (down 52.9%), Motherson Sumi Systems (down 21.3%) and Aurobindo Pharma (down 17.9%).
Market and economic update
Indian equity markets saw a broad based rally in May with the BSE Sensex and BSE Midcap indices up 1.8% and 1.4% respectively (both total return in Indian Rupees) on the back of the BJP government increasing its seat share and winning an absolute majority for a second successive term. Exceeding expectations, this is the first time a party has returned to power with a majority since 1971. Over the month foreign institutional investors and domestic institutions were net buyers to the tune of (US$ 1.4bn) and (US$754m). The Indian Rupee depreciated by 0.2% against US Dollar and appreciated 2.6% against Pound Sterling.
India's real GDP growth moderated to 5.8% in 4QFY19 compared to 6.6% in 3QFY19 due to a contraction in agricultural activity and a slowdown in manufacturing and construction, whilst growth in services improved. On the demand side, even though private consumption slowed to 7.2%, government consumption expenditure, increased 13.1%. Investment growth (gross fixed capital formation) fell sharply to 3.6%. For the year FY19 GDP growth slowed to 6.8% from 7.2% in FY18. Nirmala Sitharaman, the newly appointed Finance Minister will present her first Union Budget for FY19/20 on 5th July.
India's benchmark 10 year bond yield slid to an 18-month low to 7.03% as falling oil prices (down 14.9% for the month) and tame inflation suggest market expectations of more interest cut rates driven by a policy shift from the RBI from neutral to accommodative.
Portfolio analysis by sector as at 31 May 2019 | ||
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Sector | No. of Companies | % of Portfolio |
Financials | 7 | 23.9% |
Materials | 8 | 20.9% |
Consumer Discretionary | 5 | 11.2% |
Information Technology | 3 | 10.2% |
Consumer Staples | 4 | 9.7% |
Industrials | 4 | 9.3% |
Health Care | 3 | 7.0% |
Real Estate | 2 | 3.0% |
Communication Services | 0 | 0.0% |
Energy | 0 | 0.0% |
Utilities | 0 | 0.0% |
Total Equity Investment | 36 | 95.2% |
Net Cash |
| 4.8% |
Total Portfolio | 36 | 100.0% |
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Top 20 holdings as at 31 May 2019 | ||
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Holding | Sector | % of Portfolio |
Federal Bank | Financials | 5.3% |
Tech Mahindra | Information Technology | 4.8% |
City Union Bank | Financials | 4.8% |
PI Industries | Materials | 4.3% |
Kajaria Ceramics | Industrials | 4.2% |
NIIT Technologies | Information Technology | 4.1% |
Jyothy Laboratories | Consumer Staples | 3.5% |
Divi's Laboratories | Health Care | 3.4% |
Ramkrishna Forgings | Materials | 3.3% |
Berger Paints India | Materials | 3.2% |
IDFC Bank | Financials | 3.1% |
Jammu & Kashmir Bank | Financials | 3.0% |
Indusind Bank | Financials | 3.0% |
Sobha Developers | Real Estate | 2.8% |
Aurobindo Pharma | Health Care | 2.8% |
Emami | Consumer Staples | 2.8% |
Welspun India | Consumer Discretionary | 2.7% |
Yes Bank | Financials | 2.6% |
The Ramco Cements | Materials | 2.6% |
Radico Khaitan | Consumer Staples | 2.6% |
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Portfolio analysis by market capitalisation size as 31 May 2019 | ||
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Market capitalisation size | No. of Companies | % of Portfolio |
Small Cap (M/Cap < US$2bn) | 21 | 45.3% |
Mid Cap (US$2bn < M/Cap < US$7bn) | 13 | 42.2% |
Large Cap (M/Cap > US$7bn) | 2 | 7.8% |
Total Equity Investment | 36 | 95.2% |
Net Cash |
| 4.8% |
Total Portfolio | 36 | 100.0% |