India Capital Growth Share Discussion Threads

[bigboyblue] 06/5/2024 10:57

This is copied from the ANII board, posted a couple of weeks ago:

Citywire today:
23 Apr, 2024
Martin Gilbert-linked India trust seeks Abrdn fund merger
India Capital Growth, whose Ocean Dial fund manager is part of Aberdeen Asset Management founder Martin Gilbert’s new group, has made merger approaches to Abrdn New India.

Abrdn New India (ANII) is under pressure to become the fifth Abrdn trust to merge in the past 13 months as rivals circle the serial underperformer.

India Capital Growth (IGC), a £159m better-performing mid-cap fund, is understood to have made several approaches to Abrdn New India this year about combining with the £439m listed large-cap fund.

A source with knowledge of the situation said that JP Morgan, whose £814m Indian (JII) investment trust is the sector’s largest but worst-performing fund, had also shown interest in a combination with New India, which marks its 20th anniversary this year. However, New India may also be looking at a merger with another JPM trust.

New India, chaired by Michael Hughes, the former Barclays Capital and BZW stockbroker, has not responded to Elisabeth Scott (pictured above), the chair of India Capital Growth. It is said to prefer a merger with stablemate Abrdn Asia Focus (AAS), a £486m smaller companies fund run by Hugh Young until last year.

If it were to happen, a merger with India Capital Growth would put the assets of New India back within the fold of Martin Gilbert, the co-founder of Aberdeen Asset Management in 1982 who established the company as a leading investment trust provider and oversaw the launch of the single country fund in 2004.

Since stepping down as chief executive of Aberdeen following its 2017 merger with Standard Life, Gilbert (pictured below) has led fund management consolidator AssetCo (ASTO). Last year it bought India Capital Growth’s investment adviser Ocean Dial Asset Management, putting it within the River and Mercantile business that Gilbert bought in 2022, which has recently rebranded as River Global.

Abrdn declined to comment specifically on New India but said: ‘In these volatile markets with a dearth of IPO activity, it is no surprise to see approaches across the investment company sector. Boards are often approached informally but we can’t comment on individual trusts and indeed the variability of market performance often means that any such thoughts quickly change.’

Corporate activity between investment companies has shot up in the past 18 months as boards respond to shareholder dissatisfaction at a sector-wide de-rating that has seen shares in many listed funds trade well below asset value.
India trusts

In the India sector, IGC stands on an 11% discount and ANII and JII trade on discounts of 18% and 20% below net asset value.

Ashoka India Equity (AIE) is the only one of the four to trade on a premium of 4% above NAV. This reflects the £357m mid-cap fund’s superior performance. Under Prashant Khemka of White Oak Capital Management, it has returned 155% to shareholders over three years, beating IGC’s 78%, although the latter’s 10-year return of 313% under Ocean Dial’s Gaurav Narain (pictured below) is the best in the sector.

JII, run by JPMorgan’s Amit Mehta and Sandip Patodia following the recent move off the trust by Ayaz Ebrahim, has returned 211% over 10 years, while ANII, managed by Kristy Fong and James Thom at Abrdn, has generated 224%. Both trail the 239% of the MSCI India index.

[hydrogen1] 29/4/2024 11:00

India growth accelerating - outstanding numbers last week. 6.8% GDP growth.

Every single metric pointing upwards... (bar USD treasury holdings and Gov Debt ;0 ).



According to the latest figures, nominal GDP increased by 10.1 per cent in the third quarter of 2023-24 (October-December). This translated into a real growth of 8.4 per cent, implying that the deflator was 1.7 per cent.

[hydrogen1] 23/4/2024 10:48

GLobal Macro indicates India has a long way to go. A true bull market unfolding here

[melody9999] 08/4/2024 10:42

Interesting that the BSE Small and Mid cap have now returned to their recent highs.

Our NAV still to fully recover but the move from a premium to the more normal discount is the reason the share price is so far from the highs.

[investingdad] 04/4/2024 08:08

I think it's benchmark is Mid cap. But it invests in small and mid cap.

[robertball] 04/4/2024 07:23

Is this small cap focused?

[pyemckay] 21/3/2024 17:01

i was fortunate to make an initial purchase at 145 having been watching from 180+. Happy to hold on to these and it goes to show why a decent watchlist can offer some rare opportunities.

[buoycat] 21/3/2024 15:46

Rarely does the market present such no-brainers as my Tuesday purchase at 144p!

[disc0dave46] 20/3/2024 11:16

That's one view I guess, but definitely don't agree with it. They are investing in IGC and maximising returns, nothing wrong with that.How many companys do you hold that are buying back their own shares?, and in most cases ignoring what the actual value and internal rate of return is.IGC obviously feel that they are going to get a much greater return by buying their own shares than investing elsewhere.

[melody9999] 20/3/2024 09:57

Disagree share price 224. Anyone listening to Gaurav Narain speak - as I did live and virtually - would hear his passion for India and understand some of the drivers behing the growth in Indian companies that ICG are invested.

And actually you would have done well to follow the company's treasury transactions. Selling at a premium to NAV a month ago when the share price was in the 180s. Now starting to buy at a 10%+ discount with the share price in the 140's.

[bigboyblue] 19/3/2024 22:46

I presume they just sell shares in the companies that they invest in, sufficient to cover the buyback. In the recent buyback they make a gain of 3%

[buoycat] 19/3/2024 21:48

I'm not sure how they fund the buyback

[buoycat] 19/3/2024 16:02

It's explained somewhere in an rns. Every two years the company will guarantee to buy back your shares at a set redemption price. Last time it was 3% below NAV. IGC shares have always tended to trade well below NAV, so as the redemption date approaches the gap closes. Unfortunately after the redemption and with all that trading activity, with weakness in the Indian market, and election uncertainty approaching the price has subsequently quickly sagged !

[elric3] 19/3/2024 14:26

This may be a silly question but what is redemption and how does it impact the share price. I am not a invested here but thinking about it.

[loss-leader] 19/3/2024 13:58

Is redemption only every two years?

[bigboyblue] 19/3/2024 13:19

The company seems to be managing the situation very well. By my reckoning they have sold 6m treasury shares back into the market since the end of Jan. I haven't worked out the exact price, but the average must be around 184p. Now they've started buying again in the 140s.

My own recent purchase at 162p isn't looking too clever right now, but I've always regarded this as an investment for the longer term and bought some more today. If they follow the same timetable as last time, we'll know the discount for the next redemption point in September, with the half year report.

[johndoe23] 18/3/2024 10:58

Some fund person selling down

[buoycat] 18/3/2024 10:40

I've owned these for many years. I initially bought at 100p but then bought some as low as 24p. They underperformed for many years and have traded substantially below NAV for most of that time, often 15 to 20%. The recent run up to 180+ was a surprise to me and the retrace was expected to be honest. I sold half my holding at 166 but might be tempted to buy some back. 11% below NAV feels about right historically, but the share buy back has been a clever way to support the share price.

[martincc] 15/3/2024 16:33

I've added a few more at 151.24p, disc to nav is now -11.58%, year average is -5.53%
nav is slightly up past 2 days too (edit)

[johndoe23] 15/3/2024 13:16

Buying opp around 145p maybe