The Indian market slid in September, extending its run of losses in 2018, and has seesawed since. The main culprit was the oil price, which feeds through into inflation concerns, rising interest rates, a falling rupee and what appears to have been, a liquidity squeeze. A sharp fall in the oil price since mid-October may now be heralding a recovery in Indian equities. Against that backdrop, India Capital Growth (IGC)’s manager and adviser (David Cornell and Gaurav Narain, respectively) see real value emerging in the portfolio.

They point out that company earnings are growing once again and, while volatility may persist in the run up to elections in April/May 2019, they have been able to raise cash for redeployment into attractive opportunities. We think that this could prove to be the buying opportunity that some investors have been waiting for. The interest in this trust is illustrated by the resilience in its discount over this period, which is currently narrower than its peers.

Mid-and-small-cap listed investments in India

IGC’s investment objective is to provide long-term capital appreciation by investing (directly or indirectly) in companies based in India. The investment policy permits the company to make investments in a range of Indian equity securities and Indian equity-linked securities. The company’s investments are predominantly in listed mid-and-small-cap Indian companies.