REG - India CapitalGrwthFd - Interim Results for six months ended 30 June 2025
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RNS Number : 7092A India Capital Growth Fund Limited 25 September 2025
LEI: 213800TPOS9AM7INH846
INDIA CAPITAL GROWTH FUND LIMITED
Interim Results for the six months ended 30 June 2025
25 September 2025, London - India Capital Growth Fund ("ICGF" or "the
Company"), the LSE premium listed investment company established to take
advantage of long-term investment opportunities in companies based in India,
today reports results for the six months ended 30 June 2025.
Financial Highlights Unaudited Audited 12 months 31 Dec 2024 % change Unaudited 6 months 30 June 2024
6 months 30 June 2025
Net Asset Value (NAV) total return -9.3% 16.0% 10.6%
Share price total return -9.6% 11.3% 4.3%
Share price discount to NAV (Discount) 8.2% 7.9% 9.4%
Average month end Discount for the period 7.9% 7.7% 5.4%
Per Ordinary Share
Net Asset Value (NAV) 189.58p 209.01p -9.3% 199.18p
Share price 174.00p 192.50p -9.6% 180.50p
FX impact
Indian Rupee (INR) / Sterling (GBP) 117.47 107.46 -9.3% 105.46
· The NAV per share finished the six-month period down 9.3% and the
share price similarly was down 9.6%.
· The Discount has been relatively stable over the six-month period
ranging from a month end Discount between 11.6% and 4.3% and an average of
7.9%.
· INR weakened 9.3% against GBP over the six months to 30 June
2025, being the main contributing factor to the negative GBP NAV fall in the
period.
· The Board monitors the discount closely and has the necessary
permissions to repurchase stock if the Board decides it is in the best
interests of the Company and its shareholders. 395,000 shares at an average
cost of 169.72p per share were purchased in the six month period to 30 June
2025.
· The third Redemption Facility will take place on 28 November 2025
for eligible shareholders on the register on 29 August 2025.
Elisabeth Scott, Chair of India Capital Growth Fund, said:
"The Board is optimistic about the prospects for the Indian economy and for
the stock market in India. While there are legitimate concerns about
valuations and the speculation taking place in some sectors of the stock
market, India's weighting in the emerging markets indices is increasing and
foreign investors are, for the most part, underweight.
"Shareholders may have seen the announcement of the upcoming Redemption
Facility, which will take place on 28 November 2025. The Board will retain
their shares and recommends that all shareholders do the same."
ENQUIRIES
River Global, Investment Manager +44 7702 799 117
Lucy Draper, Robin Sellers
Shore Capital, Financial Adviser and Broker +44 2074 084 050
Gillian Martin, Daphne Zhang (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Apex Fund and Corporate Services (Guernsey) Limited +44 2035 303 687
indiacapitalbox@apexgroup.com
(Company Secretary)
Matt Lihou
About India Capital Growth Fund
India Capital Growth Fund Limited the London Stock Exchange's Main Market
listed investment company registered and incorporated in Guernsey, was
established to take advantage of long-term investment opportunities in
companies based in India. ICGF predominantly invests in listed mid and small
cap companies, although investments may also be made in large cap and private
Indian companies where the Fund Manager believes long-term capital
appreciation will be achieved. www.indiacapitalgrowth.com
HIGHLIGHTS
Financial highlights for the period from 1 January to 30 June 2025
Net Asset Value per share total return of -9.3% (2024: +10.6%)
The Net Asset Value (NAV) per share total return for the six months to 30 June
2025 was negative 9.3% (six months to 30 June 2024: +10.6%). This is in
-9.3% comparison to the Notional Benchmark BSE Midcap Total Return Index which was
negative 7.4% (six months to 30 June 2024: +26.7%) for the same period.
The NAV per share total return is the theoretical return to shareholders
calculated on a per share basis based upon the increase or decrease in the NAV
over the relevant year. The BSE Midcap Total Return Index (Index) return is
based upon the increase or decrease in the published Index converted to GBP
over the relevant year.
Shareholder total return of -9.6% (2024: +4.3%)
-9.6% The shareholder total return for the six months to 30 June 2025 was negative
9.6% (six months to 30 June 2024: +4.3%). The share price on 30 June 2025 was
174.0p (30 June 2024: 180.5p).
The shareholder total return is the theoretical return to shareholders
calculated on a per share basis based upon the increase or decrease in the
share price over the relevant year.
Shares ended the period at a discount of 8.2% (2024: 9.4%)
8.2%
The shares traded at a month end average discount to NAV of 7.9% over the six
months to 30 June 2025 (six months to 30 June 2024: 7.5%).
The discount is shown as a percentage to NAV and is calculated based upon the
difference between the Company's NAV and share price. The average discount is
based upon the published month end discount for the six month period.
Indian Rupee (INR) value compared to Pound Sterling (GBP) decreased 9.3%
(2024: +0.6%)
-9.3%
The value of INR compared to GBP decreased 9.3% over the six months to 30 June
2025 (six months to 30 June 2024: increased 0.6%). The INR/GBP exchange rate
on 30 June 2025 was 117.47 (30 June 2024: 105.46).
The majority of the Company's assets and investments are held in INR whereas
the currency of the Company's NAV is GBP. Consequently, any increase or
decrease in the value of INR compared to GBP will respectively have a positive
or negative impact on the Company's NAV. The Company's long standing policy is
not to hedge the GBP value of its INR assets and investments.
CHAIR'S STATEMENT
When I wrote my statement for the half yearly report last year, the news cycle
had been dominated by the Indian General Election and the impact of the BJP
and Modi's less than emphatic victory. In the first half of 2025, all eyes (at
least since April) have been on the USA and the possible effects of President
Trump's tariffs. Following a terrorist attack which killed 26 tourists in
Kashmir, Indian military forces struck targets in Pakistan. There were
concerns that this could lead to an escalation of the conflict. Fortunately,
both sides stepped back and, at the time of writing, there have been no
further incidents.
Performance
The Net Asset Value (NAV) of the shares in your Company fell by 9.3%,
underperforming the benchmark index, which declined by 7.4%. As the
Investment Manager's report explains in detail, unsurprisingly Indian
companies exposed to export markets were hit hard by nervousness about the
possibility of the introduction of tariffs. The Indian Rupee fell by 9.3%
against Sterling, driven in part by a reduction in interest rates. The
Company's share price fell by 9.6% over the period.
Discount management and upcoming redemption facility
The discount of the share price to NAV widened very slightly from 7.9% at 31
December 2024 to 8.2% at 30 June 2024. The Board monitors the discount/premium
closely and has the necessary permissions to repurchase or issue shares if the
Board decides it is in the best interests of the Company and its
shareholders. During the period 395,000 shares were repurchased. Since the
period end, a further 86,000 shares have been repurchased.
Shareholders may have seen the announcement of the upcoming Redemption
Facility, which will take place on 28 November 2025. Previous redemptions have
taken place at calendar year end, but the Board understands that this timing
was not ideal, so a decision was taken to bring the redemption forward by a
month. All shareholders of record at 29 August are eligible to redeem their
shares at an exit discount of 3%. The Board will retain their shares and
recommends that all shareholders do the same. For the avoidance of doubt,
unless you wish to redeem your shares under the redemption facility, no
shareholder action is required.
Investor relations
The Board's focus on ensuring that we communicate with shareholders as
effectively as possible remains in place. We were delighted to have the
opportunity to meet a number of you at our AGM in June, the first time we had
held our AGM in London. We were grateful to H/Advisors Maitland for hosting us
in their spectacular Kings Cross offices, and for providing an excellent
Indian buffet after the formal meeting had taken place, and, of course, to
Gaurav Narain and the team for providing such an insightful presentation.
We continue to place a great deal of emphasis on expanding the reach of the
Company. So far this year, there have been a number of articles in the press
and in the remainder of the year, Gaurav will participate in a number of
conferences in the autumn and the Investment Manager hosts regular webinars
during the year.
I encourage shareholders who have not yet taken advantage of these webinars to
sign up for updates on the India Capital Growth website
www.indiacapitalgrowth.com.
Looking forward
Despite the current geopolitical uncertainty, the Board is optimistic about
the prospects for the Indian economy and for the stock market in India.
While there are legitimate concerns about valuations and the speculation
taking place in some sectors of the stock market, India's weighting in the
emerging markets indices is increasing and foreign investors are, for the most
part, underweight, and have room to increase their positions.
Thank you for your support. The Board is confident that the Investment
Manager's strategy and positioning of the portfolio will stand us in good
stead.
INVESTMENT MANAGER'S REVIEW
The Company's Net Asset Value (NAV) declined by 9.3% (in GBP) in the first six
months of the year mainly because of a weakening India Rupee which fell by
9.3% against Sterling in this period. Although the Company marginally
underperformed the BSE Midcap TR Index (the Benchmark), which fell by 7.4% (in
GBP) in the same period, we are pleased to report the performance of the
portfolio in the mid and long term remains strong: The NAV increased 64.9% and
169.2% in the three years and five years to 30 June 2025 respectively.
Portfolio Performance
India Capital Growth Fund is focused on investing in high-quality small and
mid-cap companies within the Indian equity market. As of the latest reporting
period, approximately 62% of the portfolio is allocated to small-cap stocks
and 31% to mid-cap stocks. The fund adheres to a long-term investment
philosophy, targeting businesses with strong fundamentals and sustainable
growth potential. This approach is reflected in the portfolio's stability,
with approximately 60% of holdings retained for more than five years and a
consistently low turnover rate. The portfolio currently comprises 37 stocks.
The first half of 2025 was characterised by significant market volatility.
During the January to March quarter, mid and small-cap indices experienced
sharp corrections, with the BSE Mid-Cap Index declining by 10.4% and the BSE
Small-Cap Index falling by 15.5% in INR terms. In contrast, the large-cap BSE
Sensex registered a modest decline of 0.9%. These movements were driven by
weak earnings growth and increased investor risk aversion, largely influenced
by tariff-related uncertainty under the Trump administration, which triggered
foreign institutional investor (FII) outflows totalling US$14 billion in this
period. Markets rebounded in the April to June quarter, recovering the earlier
losses. As a result, mid and small-cap indices ended the half-year broadly
flat, while the BSE Sensex closed the period in positive territory.
The fund's NAV declined by 9.3% during the period, underperforming its
benchmark by 1.9%. A substantial portion of this decline was attributable to
currency depreciation, with the Indian Rupee weakening by 9.3% against
Sterling. In INR terms, the NAV registered a modest decline of 0.9%.
Sector-wise, financials contributed positively to performance. Following a
challenging 2024, marked by tighter liquidity and lending norms imposed by
Reserve Bank of India, the sector rebounded strongly in response to policy
reversals and interest rate cuts. RBL Bank led the performance of the banks
with a 58% gain. Other strong performers were spread across sectors, led by
MCX up 41%, CCL Products up 15% and both our digital holdings - Cartrade and
Affle, which were up 11% each.
Conversely, export-oriented businesses-comprising approximately 35% of the
portfolio-faced significant headwinds due to global macro uncertainty, delayed
decision-making cycles, and muted earnings visibility. Auto ancillary and
textile companies were particularly affected, while IT services demonstrated
relative resilient, having thus far avoided direct exposure to tariffs. Dixon
Technologies, one of our largest holdings, declined by 17% amid concerns over
the potential impact of tariffs on electronic exports.
During the period, two new positions were initiated. Titagarh Rail Systems, a
leading manufacturer of railway wagons, has entered into the passenger rail
segment and secured a robust order book for metro and coach manufacturing.
With high entry barriers and limited private sector competition, the company
is well-positioned to benefit from structural upgrades in India's rail
infrastructure. Coforge, a fast-growing IT services firm, was added to the
portfolio based on its differentiated market positioning and early adoption of
AI technology, which have translated into new business wins and a robust
pipeline. The fund also increased exposure to EPL, Elecon, Triveni, Kajaria,
and Balkrishna Industries, capitalising on price dislocations.
During the period, we exited Vedant Fashions due to slowing growth and
valuation concerns. Partial profit was booked in Federal Bank, MCX, PSP
Projects, Neuland Laboratories, Skipper, and Persistent Systems to manage
position sizes and respond to prevailing market volatility.
The fund currently holds 5.6% in cash. Given that valuations remain above
historical averages and macroeconomic conditions continue to be fluid, we
anticipate ongoing volatility in the near term. We remain focused on bottom-up
stock selection and disciplined portfolio construction to navigate this
environment.
Economy
India has emerged as the fastest-growing large economy post-COVID, with real
GDP expanding at 8.8% p.a. over FY2021-2024. This strong economic momentum
translated into robust corporate earnings, which grew an average of over 20%
annually during the period. However, growth moderated in 2024, primarily due
to election-related disruptions and inflation weakness which dampened rural
consumption. The slowdown was viewed as temporary, particularly following the
re-election of the Modi government, which signalled policy continuity and
reinforced investor confidence in 2025.
India's GDP growth recovered in the first half of 2025, yet corporate earnings
remained subdued, registering single-digit growth for the fifth consecutive
quarter. This stagnation persisted despite a pro-growth Union Budget in
February 2025, which included substantial infrastructure spending and personal
tax cuts. Several unforeseen factors dampened economic momentum: an early
monsoon disrupted construction and seasonal consumption patterns, while
geopolitical tensions, including Trump-era tariffs, renewed India-Pakistan
conflict, and the Israel-Iran crisis, contributed to delays in travel and
decision-making.
Despite these challenges, industrial activity has shown signs of recovery,
although consumption remains sluggish. There is cautious optimism for a
domestic revival supported by a favourable monsoon that is expected to boost
rural incomes. The government's next phase of reforms, including
rationalisation of the goods and Services Tax (GST), aims to stimulate demand
and simplify compliance. Additionally, anticipated tax cuts in key consumption
sectors such as automobiles ahead of the festive season could further
stimulate growth. The infrastructure pipeline also remains robust.
The primary drag on growth stems from an increasingly uncertain global
environment. The imposition of U.S. tariffs was particularly disappointing,
given the progress made on a bilateral trade deal and the strong rapport
between Prime Minister Modi and President Trump. India now faces some of the
highest tariff barriers globally, adding to investor anxiety. Nevertheless,
India's economy remains more domestically driven than many of its emerging
market peers, and key export sectors- such as IT services, pharmaceuticals,
and electronics-have largely been insulated from external challenges.
Labour-intensive and U.S. dependent sectors including textiles, gems and
jewellery, auto ancillaries, and aquaculture, remain vulnerable. Their
performance could determine whether India's GDP growth remains at the lower
end of the projected 6-7% p.a. forecast range.
On a positive note, India's macroeconomic fundamentals remain strong.
Inflation is near record lows, interest rates have been reduced by 1%, and
foreign exchange reserves stand at approximately $700 billion-providing 11
months of import cover. The fiscal position is stable, affording the
government flexibility to navigate external volatility and support domestic
growth.
Stock Markets
Following three years of strong performance, Indian equity markets
underperformed global peers in the first half of 2025-delivering flat returns
in INR terms and negative returns in GBP. Elevated valuations, coupled with
muted earnings growth led foreign investors to remain mainly on the sidelines.
Beneath the surface, the Indian Equity market is undergoing a quiet but
significant transformation. Domestic institutional investors and retail
investors have emerged as the primary market drivers, contributing sustained
monthly inflows of $3-4 billion. As a result, domestic ownership has now
surpassed that of foreign institutional investors (FIIs), and the scale of
inflows has created challenges around effective liquidity deployment.
This surplus liquidity is fuelling a vibrant IPO pipeline, secondary share
sales by promoters, and strategic stake divestments by multinational
corporations looking to capitalise on premium valuations. These developments
have broadened market depth and enhanced the system's capacity to absorb
liquidity.
A key question facing the market is whether the current pace of inflows will
be sustained. Evidence points to a structural shift in household savings
behaviour-from traditional hard assets such as property and gold to financial
instruments. This transition is largely driven by small-ticket retail
investments, through monthly systematic investment plans (SIPs).
While market valuations have eased from their peaks, earnings growth continues
to fall short of expectations. Following six months of flat returns, India's
relative premium to Emerging Markets has reverted to its long term historical
average. However, in absolute terms, it still trades at a notable premium.
Themes reflected in Portfolio holdings
Digitalisation
CarTrade Technologies
India's leading online classified platform
India has experienced rapid growth in digital adoption and mobile penetration,
fundamentally reshaping consumer behaviour across industries. In the
automobile industry, this transformation is evident with over 90% of buyers
conducting online research before visiting a showroom, often relying on
third-party platforms. CarTrade Technologies (CarTrade) is a leading player in
this space, operating an asset-light and profitable model across multiple
segments with the online automobile classifieds market.
CarTrade operations are structured around three primary verticals: i) consumer
platforms such as CarWale and BikeWale, ii) OLX India, the country's largest
classifieds platform and iii) Shiram Auto Mall, which focusses on vehicle
remarketing and auctions. These segments contribute almost equally to the
company's revenue, with strong profitability reflected in consolidated EBITDA
margins of approximately 27%.
The consumer segment offers auto manufacturers (OEMs) and dealers a range of
solutions, including lead generation, digital campaigns for new launches,
brand building, and consumer insights. As auto companies steadily continue to
increase their digital marketing budgets, this segment has grown at a 25% CAGR
over the last three years, well ahead of overall industry averages and is
expected to maintain a growth rate of around 20% annually. The acquisition of
OLX in 2023 further strengthened CarTrade's position in used vehicle
classified adverts, while also enabling diversification into adjacent
categories such as electronics, real estate, and mobile phones.
The remarketing business, which facilitates vehicle auctions, has grown
modestly at 3% CAGR but is now accelerating, supported by an increasing share
of vehicles sourced directly from retail channels. CarTrade manages over 135
yards across 90 cities and forecasts 12-15% p.a. growth in this segment going
forward.
With approximately 70 million monthly unique visitors-90% of whom are
organic-CarTrade maintains a lean marketing spend at just 5% of revenue. Its
asset-light, high operating leverage model drove FY25 revenue growth of 31%
and profit growth of 74%. Reflecting this strength, the stock surged 155% over
the past year. While we retain high conviction in CarTrade's ability to
compound value amid India's accelerating digital transformation, we have
partially realised gains within the portfolio.
Consumption
CCL Products Ltd
One of the world's largest private label instant coffee manufacturers.
If you step into Tesco, Sainsbury's, or Waitrose, there's a strong chance the
private label instant coffee on the shelf is manufactured by CCL Products
(India) Ltd. With a significant customer base exceeding 400 brands, coffee
chains and supermarkets, a portfolio of over 1,000+ blends, and a presence in
more than 100 countries, CCL is the world's largest exporter of instant coffee
and a leading private label manufacturing.
The company operates four manufacturing facilities across India, Vietnam, and
Switzerland, producing a wide comprehensive range of coffee formats-including
spray-dried, freeze-dried, liquid, and specialty coffees-tailored to the needs
of private labels and institutional clients globally. CCL sources coffee beans
from multiple origins and employs a cost-plus pricing model, which insulates
from raw material price volatility.
Exports account for over 85% of revenues, with Europe contributing 35-40%. The
company's ability to deliver customised blends fosters strong customer
loyalty, and with orders typically placed 6-12 months in advance, the business
benefits from strong revenue visibility.
In the domestic market, CCL has expanded into the branded segment through its
Continental Coffee label, which now contributes approximately 10% of revenues.
It is currently the third-largest instant coffee brand in India, with a market
share of 3-4%. In 2023, CCL expanded its premium offering by acquiring the
UK-based Percol brand and launching it in India. The branded business has
already achieved breakeven and is growing at 30%+ annually.
Financially, CCL has delivered resilient performance, with sales and net
profit growing at 29% and 18% CAGR, respectively, over the past three years.
Supported by a robust operating model and an expanding global footprint, the
company is well-positioned for sustained growth. Management has guided for
10-20% annual volume growth and 15-20% EBITDA growth over the medium term. The
stock has returned 44% over the last 12 months, reflecting strong investor
confidence in its trajectory.
Make in India
Titagarh Rail Systems
India's largest manufacturer of railway wagons in the Private Sector.
In recent years, the Indian government has significantly increased capital
expenditure, with infrastructure development, particularly in the Railways
sector, a key priority. Over the past decade, capital expenditure on Indian
Railways has increased more than fivefold to approximately $31 billion in
FY25. These investments span critical areas such as track doubling,
electrification, and the procurement of new wagons and coaches for both
passenger rail and metro services. To modernize the passenger segment, Indian
Railways has introduced advanced coaches and expanded its network. This
significant increase in spending has revived private sector interest in the
railway industry.
Titagarh Rail Systems (Titagarh) is the largest rail wagon manufacturer in
India, commanding a 20% market share. Leveraging the government's increased
infrastructure spending, Titagarh has successfully expanded into the
production of metro and passenger coaches, greatly broadening its market
potential. This segment is characterised by high entry barriers due to complex
technology and limited competition, with only three players currently active.
With its wagon business providing stable cash flow, Titagarh is strategically
focused on growing its passenger segment.
To strengthen its competitive position, the company is vertically integrating
by manufacturing wheels and propulsion systems in-house. Its current order
book, valued at more than three times its historical revenue, underscores
strong growth prospects. Notably, more than two-thirds of its $1.5 billion
order book is attributable to the passenger segment. To meet this growing
demand, Titagarh plans to more than double its capacity from 300 coaches
currently to 840 coaches by FY27. The passenger segment is expected to
contribute approximately 35% of total revenue by FY28, up from just 11% in
FY24. With the right investments and technological advancements, Titagarh aims
to evolve into a comprehensive rail transportation company, offering both
wagons and passenger coaches.
Titagarh is a recent entrant in India Capital Growth Fund. Despite recent
underperformance, we see it as a long-term holding.
PRINCIPAL INVESTMENTS
As at 30 June 2025
Holding Sector
Market cap size Value % of Portfolio
£000
Multi Commodity Exchange M Financial Services 8,832 5.1%
Skipper S Industrials 8,191 4.8%
Federal Bank M Financial Banks 7,820 4.6%
Dixon Technologies M Consumer Discretionary 7,475 4.4%
Neuland Laboratories S Healthcare 6,995 4.1%
RBL Bank S Financial Banks 6,980 4.1%
Affle India S Digital 6,634 3.9%
Persistent Systems M IT Services 6,405 3.7%
Emami S Consumer Staples 6,130 3.5%
PI Industries M Chemicals 5,766 3.4%
IDFC Bank M Financial Banks 5,684 3.3%
City Union Bank S Financial Banks 5,297 3.1%
CCL Products India S Consumer Staples 5,264 3.1%
JK Lakshmi Cement S Cement 4,770 2.8%
Ramkrishna Forgings S Auto & Auto Ancillary 4,593 2.7%
VIP Industries S Consumer Discretionary 4,083 2.4%
Sona BLW Precision Forgings S Auto & Auto Ancillary 3,986 2.3%
Cartrade Technologies S Digital 3,890 2.3%
Welspun India S Textiles 3,722 2.2%
Gokaldas Exports S Textiles 3,570 2.1%
Total top 20 portfolio investments 116,087 67.9%
Investments may be held by the Company and its Mauritian subsidiary, ICG Q
Limited.
Market capitalisation size definitions for the six months to 30 June 2025*:
L: Large cap - companies with a market capitalisation above US$12bn
M: Mid cap - companies with a market capitalisation between US$4bn and US$12bn
S: Small cap - companies with a market capitalisation below US$4bn
*based on the classifications adopted by the Association of Mutual Funds in
India (AMFI), which is mandated by the Securities and Exchange Board of India
(SEBI) to define large, mid, and small-cap companies
PORTFOLIO STATEMENT
As at 30 June 2025
HOLDING Market cap Nominal Value % of
size
£000
company
NAV
LISTED SECURITIES
Auto & Auto Ancillary
Balkrishna Industries M 155,000 3,227 1.9%
Ramkrishna Forgings S 800,000 4,593 2.7%
Sona BLW Precision Forgings S 972,714 3,986 2.3%
Uniparts India S 562,237 1,908 1.1%
13,714 8.0%
Cement
JK Lakshmi Cement S 623,000 4,770 2.8%
Sagar Cements S 1,611,000 3,281 1.9%
8,051 4.7%
Chemicals
Aether Industries S 417,124 2,705 1.5%
PI Industries M 165,000 5,766 3.4%
8,471 4.9%
Consumer Discretionary
Bajaj Electricals S 348,734 2,044 1.2%
Dixon Technologies M 58,600 7,475 4.4%
Kajaria Ceramics S 365,698 3,365 1.9%
VIP Industries S 1,138,853 4,083 2.4%
16,967 9.9%
Consumer Staples
CCL Products India S 727,883 5,264 3.1%
Emami S 1,259,764 6,130 3.5%
Essel Propack S 1,498,332 3,107 1.8%
Jyothy Laboratories S 742,000 2,187 1.3%
16,688 9.7%
Digital
Affle India S 390,000 6,634 3.9%
Cartrade Technologies S 268,671 3,890 2.2%
10,524 6.1%
Financial Banks
City Union Bank S 2,845,000 5,297 3.1%
IDFC Bank M 9,167,000 5,684 3.3%
Indusind Bank M 224,000 1,663 1.0%
RBL Bank S 3,300,000 6,980 4.1%
Federal Bank M 4,310,000 7,820 4.5%
27,444 16.0%
Financial NBFC
Cholamandalam Investment and Finance Company L 175,000 2,425 1.4%
2,425 1.4%
Financial Services
Multi Commodity Exchange M 116,000 8,832 5.1%
8,832 5.1%
Healthcare
GPT Healthcare S 2,200,000 2,716 1.6%
Neuland Laboratories S 68,475 6,995 4.1%
9,711 5.7%
Industrials
Container Corporation of India M 418,000 2,704 1.6%
Elecon Engineering S 623,432 3,475 2.0%
PSP Projects S 403,574 2,611 1.5%
Skipper S 1,893,823 8,191 4.8%
Titagarh Rail Systems S 304,462 2,444 1.5%
Triveni Turbine S 606,113 3,160 1.8%
22,585 13.2%
IT Services
Coforge M 175,000 2,867 1.7%
Persistent Systems M 124,536 6,405 3.7%
9,272 5.4%
Textiles
Gokaldas Exports S 465,826 3,570 2.1%
Welspun India S 3,050,000 3,722 2.2%
7,292 4.3%
Total equity investments (including those held by ICG Q Limited) 161,976 94.4%
9,689 5.6%
Cash less other net current liabilities
Total Net Assets (before deferred taxation for Indian CGT) 171,665 100.0%
Deferred tax provision for Indian CGT (9,733)
Total Net Assets (after deferred tax provision for India CGT) 161,932
Notes:
L: Large cap - companies with a market capitalisation above US$12bn 1.4%
M: Mid cap - companies with a market capitalisation between US$4bn and US$12bn 30.6%
S: Small cap - companies with a market capitalisation below US$4bn 62.4%
94.4%
Equity investments may be held by the Company and its Mauritian subsidiary,
ICG Q Limited.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STATEMENT
The Board recognises its responsibilities for reporting on ESG and regularly
engages with the Investment Manager, upon whom the Board is reliant to deliver
this ESG reporting of the Company and to implement its ESG strategy. In this
regard the Board attended a presentation by the Investment Manager on the
implementation of its ESG policy and how it has developed a bespoke ESG
scoring model to monitor and report upon ESG factors of the investment
portfolio. The Board is informed of the progress of this reporting at least
annually when it prepares the ESG Report for the Annual Report. The Board also
visits India with the Investment Manager during which they attend meetings
with investee companies to hear first-hand on how these companies are
implementing ESG factors into their business processes and reporting in India.
The Company reports in line with the Listing Rules and is a Guernsey structure
and therefore is not required to comply with the Task Force on Climate-related
Financial Disclosures (TCFD). However, the Board is mindful of TCFD disclosure
guidance and in particular the core content of Governance, Strategy, Risk
Management and Metrics & Targets when reporting on ESG matters. The
Company entity itself is an investment company with no employees so has
limited climate related risk, nonetheless the Board is mindful of the climate
related impact of air travel to Board Meetings and therefore only travels in
accordance with required regulations.
In setting and reporting on our ESG policies, we have considered the impacts
of our activities and followed the relevant regulatory guidance including the
requirements of section 172(1) of the Companies Act 2006 and, in so far as
they apply, the non-financial reporting requirements in sections 414CA and
414CB of the Companies Act 2006. Although India Capital Growth Fund does not
fall within the scope of these two sections, we believe that these disclosures
will provide shareholders and stakeholders with a greater level of insight and
transparency. We have also reported under the UK Corporate Governance Code
("UK Code").
The Board believes in engagement and long-term ownership both in respect of
our own shareholders and the investment approach adopted by our Investment
Manager, to drive investment performance and to contribute to positive change
to build a sustainable future. We and our Investment Manager believe that
companies with strong management and a focus on ESG have the potential to
reduce risks facing their business, thereby delivering sustainable performance
and enhanced returns over the longer-term.
Investment management approach to sustainability & ESG
The management of sustainability risks forms an important part of the
investment portfolio due diligence process implemented by the Investment
Manager. When assessing the sustainability risks associated with underlying
investments, the Investment Manager is assessing the risk that the value of
such underlying investments could be materially negatively impacted by an
environmental, social or governance event or condition. Sustainability risks
are incorporated into the Investment Manager's evaluation of an issuer's
investment risk or return, across all the Company's investments.
The Investment Manager has made ESG matters an integral part of its due
diligence process over the last three years. The Board and the Investment
Manager believe that sound governance is an essential element of a company's
long-term sustainability and growth, and that detailed analysis beyond
financial data is required to understand the true characteristics of a
potential underlying investment. This includes, but is not limited to,
conviction in the alignment of interest between the owners, managers and
minority shareholders of a business, the nature and extent of the true
independence of the Board and its specialist sub-committees, capital
allocation and dividend policies, tax treatment, key man risk and succession
planning. Governance plays a central role in the investment philosophy of the
Investment Manager, and it naturally veers away from certain companies where
practical issues of "getting business done" within India can undermine good
governance. These companies tend to be capital intensive, rely on multiple
bureaucratic approvals for authorisation and are often cash flow negative. The
Investment Manager also will not consider investments in industries that are
considered harmful to the wellbeing of society not least because they may not
demonstrate adequate compliance with regulations and tax considerations which
may create unforeseen financial uncertainty. These include tobacco, alcohol,
gambling and defence equipment manufacturers of all descriptions.
The Investment Manager values non-financial factors, such as environmental and
social issues, when evaluating a company for investment. These factors include
gender diversity, environmental impact, carbon footprint, workplace health and
community engagement. If the sustainability risks exceed the risk appetite of
the Company, the Investment Manager may sell or reduce exposure to protect
shareholders' interests.
Social factors considered in the ESG assessment include:
· Fulfilment of responsibilities under Corporate Social
Responsibility requirements
· Human capital: employee turnover, health & safety, training
& diversity, treatment of blue collar workers
· Human rights and community relations
· Customer privacy and data security
· Access and affordability
· Product quality and safety
· Supply chain management
· Customer welfare
· Selling practices and product labelling
Additionally, as part of its commitment to ESG & sustainability in its
investment approach, the Investment Manager is a signatory to the UN
Principles of Responsible Investing and has appointed a dedicated ESG
co-ordinator to implement its ESG investment strategy.
Engagement
To gain a comprehensive understanding of the ESG and sustainability practices
of portfolio companies, the Investment Manager prioritises constructive
dialogue with management. The investment advisers in India regularly engage
with both current and potential portfolio companies, conducting onsite visits
to manufacturing facilities and corporate headquarters to gather insights and
build a clear picture. Additionally, they strive to meet employees beyond the
senior management team to ensure that the ESG, and sustainability values
promoted by senior management are reflected throughout the organisation.
The Investment Manager has noted over the past two years that there has been a
substantial improvement in ESG practices and disclosure standards being
followed by Indian companies. There is a growing recognition within corporates
that poor ESG disclosure and practices could be a significant business risk,
while good ESG practices act as a competitive advantage and lead to improved
market valuations. This is reflected in improved level of disclosures in
corporate presentations on ESG goals and progress made.
The regulatory environment is also getting tighter. SEBI has introduced the
Business Responsibility and Sustainability Reporting (BRSR) regulations which
is a comprehensive disclosure framework that helps companies disclose their
ESG-related information in India. BRSR came into effect in 2021 and since FY
2023, it is mandatory for the top 1000 listed entities in India to report
under this framework. This is enabling a better relative comparison within
companies in a sector and has resulted in engagement meeting presentations
from both investee companies and potential portfolio holdings giving
substantial coverage to ESG matters such that direct engagement to drive ESG
reporting improvements has, in general, not been necessary in FY 2024. The
Investment manager believes the quality of data being reported is improving
each year which is reflected in the improved ESG scoring of the portfolio
referred to above.
Voting on portfolio investments
Please refer to the 2024 Annual Report for details regarding voting on
portfolio investments, and examples of such voting practices.
DIRECTORS' INFORMATION
The Directors as at 30 June 2025, all of whom are non-executive, are as
follows:
Elisabeth Scott (Chair)
Elisabeth was appointed to the Board as Chair on 18 December 2017. She has 40
years' experience in the asset management industry, having started her career
in Edinburgh in the 1980s, then moving to Hong Kong in 1992 where she remained
until 2008, latterly in the role of Managing Director and Country Head of
Schroder Investment Management (Hong Kong) Limited. She is a Non-Executive
Director of BlackRock World Mining Trust plc, and Chair of JPMorgan Global
Emerging Markets Income Trust plc and a former Chair of the Association of
Investment Companies (AIC). She is resident in the UK.
Patrick Firth
Patrick was appointed to the Board in September 2020. He qualified as a
Chartered Accountant with KPMG Guernsey in 1991 and is also a member of the
Chartered Institute for Securities and Investment. He worked in the fund
industry in Guernsey since joining Rothschild Asset Management C.I. Limited in
1992 before moving to become managing director at Butterfield Fund Services
(Guernsey) Limited (subsequently Butterfield Fulcrum Group (Guernsey)
Limited), a company providing third party fund administration services, where
he worked from April 2002 until June 2009. Patrick is a former Chairman of the
Guernsey International Business Association and of the Guernsey Investment
Fund Association. He is a Non-Executive Director of CT UK Capital and Income
Investment Trust plc. and VH Global Energy Infrastructure plc. He is resident
in the UK.
Lynne Duquemin
Lynne was appointed to the board in May 2021. She has over 35 years'
experience in financial markets, initially in London in the late 1980's before
being seconded by Credit Suisse to Guernsey, Channel Islands in 1995. Since
2020 she has led the investment arm of a Single Family Office in Guernsey, as
their Chief Investment Officer. Prior to which she worked for twelve years as
an Investment Consultant for an Independent Investment Consultancy. She is a
Fellow of the Chartered Institute for Securities and Investment and a
Chartered Wealth Manager. She is also an ASIP qualified member of the CFA UK
member of the CFA, 953214, as well as a Chartered Director and Fellow of the
Institute of Directors. Lynne is a Director of several private companies,
including a global operating company and has prior experience as a
Non-Executive Director of a listed Frontier Equities Investment Company. She
is based in Guernsey, Channel Islands.
Nick Timberlake
Nick was appointed to the Board in July 2022. He has over 30 years' experience
in the asset management industry as a Portfolio Manager, he was with HSBC
Global Asset Management between 2005 and 2020, initially as Global Head of
Emerging Markets Equities and then Head of Equities. Previously he was a
Director of F&C Investment Management and has spent the last 20 years
investing in global emerging markets equities. He is a non-executive director
of Aberdeen Equity Income Trust, CT Automotive plc and a partner in Panorama
Property Investments LLP. Nick is a member of the CFA Institute and CFA
Society of the UK. He is resident in the UK.
The following summarises the Directors' directorships in public companies and
other relevant entities:
Company Name Stock Exchange
Elisabeth Scott BlackRock World Mining Trust plc London
JP Morgan Global Emerging Markets Income Trust plc London
Patrick Firth CT UK Capital and Income Investment Trust plc London
VH Global Energy Infrastructure plc London
Lynne Duquemin - -
Nick Timberlake Aberdeen Equity Income Trust plc London
CT Automotive plc London
DIRECTORS' REPORT
The Directors present their interim report and the unaudited condensed
financial statements of the Company for the period from 1 January 2025 to 30
June 2025.
The Company
India Capital Growth Fund Limited (the "Company") was registered in Guernsey
on 11 November 2005 and is a closed-ended investment company with its shares
admitted to trading on the main market of the London Stock Exchange. The
Company's objective is to provide long-term capital appreciation by investing
in companies based in India. The Company's registration number is 1030287. At
30 June 2025, the Company has one wholly owned Mauritian subsidiary, ICG Q
Limited ("ICG Q"). The Company has an unlimited life, although a Redemption
Facility has been put in place following the passing of a shareholders'
resolution at a General Meeting on 12 June 2020. The first date at which
shareholders were able to request the redemption of some or all of their
shares was 31 December 2021 when 15,408,872 net shares were redeemed under the
Redemption Facility. The second date was 31 December 2023 when 15,159,876 net
shares were redeemed under the Redemption Facility. Under this facility the
next date at which shareholders will be able to request the redemption of some
or all of the shares will be on 28 November 2025 for shareholders on the
register on 29 August 2025, as approved by shareholders at the Company's AGM
on 5 June 2025.
Group structure
The Board of Directors continues to take steps to close down and to liquidate
its Mauritian subsidiary, ICG Q, given it no longer serves a beneficial
purpose for the Company's shareholders. However, this process may take some
considerable time given the restrictions imposed by the Indian regulators on
transferring listed Indian equities from one entity to another without
incurring considerable costs and risk. The Board does not believe this is in
the interest of the shareholders. In the meantime, the Investment Manager has
moved Indian Rupee ("INR") cash balances held by the Group's custodian from
ICG Q to the Company and has committed that all future purchases for the
investment portfolio will only be made by the Company, unless it is in
shareholders' interests to do otherwise.
Details of the authorised and issued share capital, together with details of
the movements in the Company's issued share capital during the period are
shown in note 8. The Company has one class of ordinary shares which carry no
right to fixed income. Each share carries the right to one vote at general
meetings of the Company.
There are no specific restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the general provisions of the
Articles of Association and prevailing legislation. The directors are not
aware of any agreements between holders of the Company's shares that may
result in restrictions on the transfer of securities or on voting rights.
Investment policy
The Company's investment objective is to provide long-term capital
appreciation by investing in companies based in India. The investment policy
permits the Company to make investments in a range of Indian equity and
equity-linked securities and predominantly in listed mid and small cap Indian
companies with a smaller proportion in unlisted Indian companies. Investment
may also be made in large cap listed Indian companies and in companies
incorporated outside India which have significant operations or markets in
India. While the principal focus is on investment in listed equity securities
or equity-linked securities, the Company has the flexibility to invest in
bonds (including non-investment grade bonds), convertibles and other types of
securities. The Company may, for the purposes of hedging and investing, use
derivative instruments such as financial futures, options and warrants. The
Company may, from time to time, use borrowings to provide short-term liquidity
and, if the Directors deem it prudent, for longer term purposes. The Directors
intend to restrict borrowings on a longer-term basis to a maximum amount equal
to 25% of the net assets of the Company at the time of the drawdown. It is the
Company's current policy not to hedge the exposure to the Indian Rupee.
The portfolio concentration ranges between 30 and 40 stocks; however, to the
extent the Company grows, the number of stocks held may increase over time.
The Company is subject to the following investment limitations:
· No more than 10 per cent. of total assets of ICG
Q and the Company (measured at the time of investment) may be invested in the
securities of any one issuer; and
· No more than 10 per cent. of total assets of ICG
Q and the Company (measured at the time of investment) may be invested in
listed closed-ended funds.
The Board of Directors of the Company does not intend to use derivatives for
investment purposes. The Directors confirm the investment policy of the
Company has been complied with throughout the period from 1 January 2025 to 30
June 2025.
Investment Manager and AIF Manager
On 9 April 2025 the Board of the Company agreed to novate the Investment
Management & AIFM Agreement entered into with Ocean Dial Asset Management
Limited ("ODAM") on 19 September 2017 to SVM Asset Management Limited (trading
as RGI Fund Management) ("SVM") with no change to its terms. SVM is a member
of River Global PLC (previously AssetCo plc) ("River Global") which acquired
ODAM on 2 October 2023 and this novation is the final part of the planned
integration of ODAM into River Global's other active equity asset management
businesses.
Results and dividends
The Company's performance during the period is discussed in the Investment
Manager's review.
The results for the period are set out in the unaudited condensed statement of
comprehensive income.
Consistent with the Company's investment policy of providing long term capital
appreciation, the Directors do not recommend the payment of a dividend for the
period ended 30 June 2025 (2024: £nil).
Substantial interests
Shareholders who held an interest of 3% or more of the Ordinary Share Capital
of the Company at 29 August 2025, being the latest date such data is
available, are stated in the table below:
No. of Shares % Holding
Hargreaves Lansdown 15,993,681 18.72%
Interactive Investor 14,675,029 17.18%
AJ Bell 5,097,472 5.97%
West Yorkshire Pension Fund 4,677,028 5.48%
BNP arbitrage account 4,039,301 4.73%
JM Finn 4,010,552 4.70%
Charles Stanley 2,635,138 3.09%
*Note - % Holding is the percentage of voting rights and issued share capital.
All substantial interests disclosed are held in nominee accounts, and in the
opinion of the Directors, the Company has no ultimate controlling party.
Directors
Elisabeth Scott, Patrick Firth, Lynne Duquemin and Nick Timberlake served
throughout the period and to date.
Share repurchases by the Company
Further to the shareholders' resolutions of 5 June 2025, 26 June 2024 and 27
June 2023, the Company purchased 395,000 ordinary shares in 2025 with a
nominal value of £3,950, and representing 0.46% per cent of the Company's
called up ordinary share capital, for a consideration of £670,375. Details of
these purchases are provided in note 8 - Treasury Shares.
At the end of the year, the directors had authority, under the shareholders'
resolutions of 5 June 2025, 26 June 2024 and 27 June 2023, to purchase through
the market 14.99 per cent of the Company's ordinary shares. This authority
expires on the date of the 2026 AGM.
Directors' interests
At 30 June 2025, Directors and their immediate families held the following
declarable interests in the Company:
Ordinary shares Ordinary shares Ordinary shares
30.06.25 30.06.24 31.12.24
Elisabeth Scott 50,000 50,000 50,000
Patrick Firth 25,000 25,000 25,000
Lynne Duquemin 25,200 19,125 19,125
Nick Timberlake 57,500 50,000 50,000
Ongoing charges
In accordance with the recommended methodology set out by the Association of
Investment Companies ("AIC"), the ongoing charges ratio of the Company and its
subsidiary for the period ended 30 June 2025 were 1.55% based on an average
AUM of £155,035,702 (30 June 2024: 1.67% based on an average AUM of
£159,359,953 and 31 December 2024: 1.58% based on an average AUM of
£168,646,935).
Outlook
The investment philosophy of the Company is that in India optimal returns will
be generated over time by investing in companies that are well placed to
benefit from the structural growth potential of the Indian economy. Whilst
uncertainties remain, the future outlook for the portfolio investee companies
remains generally strong. This is reflected in the fact that the NAV of the
Company has increased over the two months since the period end.
Sustainability and environmental, social and governance (ESG)
The ongoing development of internal ESG capabilities and reporting by the
Manager continues and is supported by the Directors. The Company's statement
on Sustainability and ESG is provided below, and the Company's report on
Sustainability and ESG can be found in the 2024 Annual Report.
Principal Risks and Uncertainties
The Principal Risks and Uncertainties outlined in the Risk Management section
of the Strategic Report of the 2024 Annual Report remain unchanged for the
period to date with the exception of Emerging Risks.
The Board confirms that they have carried out a robust assessment of the
principal risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity.
The Board has drawn up a Control Environment and Risk Assessment Matrix (the
"Matrix"), which identifies the key risks to the Company and considers the
impact and likelihood of each significant risk identified. The Board reviews
the Matrix at least quarterly to ensure, in particular, that any emerging
risks are identified, assessed and documented at an early stage.
The Principal Risks fall into several broad categories, which are set out
below:
Investment performance and financial risk:
Significant market, foreign currency, credit and liquidity risks faced by the
Company are set out in note 10 to the financial statements. The Company could
be severely affected by a change in market conditions leading to a fall in
share price and potentially a widening of the discount to NAV. These risks and
their mitigation controls are reviewed at each quarterly Board meeting.
Redemption Facility and associated risk:
The third Redemption Facility where shareholders will be able to request the
redemption of some or all of the shares will be 28 November 2025, following
shareholder approval at the Company's AGM on 5 June 2025. There is therefore a
possibility that redemptions requests may impair the future long-term
viability of the Company. Based upon the investment performance of the Company
to date, the diversity of the shareholder base and that shares have previously
been issued from treasury at a premium to NAV to satisfy increased demand, the
Board believes shareholder redemptions are likely to be at such a level not to
impact the going concern of the Company.
Emerging risks:
Risks that emerge unexpectedly, and in some cases quite quickly, can have an
economic impact upon the Company. In particular significant geopolitical
conflicts such as the Russia/Ukraine conflict, Israel/Palestine conflict and
the introduction of Trade Tariffs can disrupt global supply chains and the
Indian economy and listed companies. The Board assesses and monitors these
risks as and when they develop so, if necessary, controls and procedures can
be implemented to mitigate against their economic impact upon the Company.
During the period, there were no changes to the emerging risks identified, and
no new procedures were implemented.
Cybersecurity, data security breach and related criminal activity risk:
The Company is exposed to the risk of criminal attacks on its data and systems
held and managed by its service providers. Cybersecurity controls at all
service providers are reviewed on a regular basis. Controls at the
administrator are subject to an annual controls audit which is reviewed by the
Audit & Risk Committee and any anomalies or breaches followed up.
Operations and systems risk:
The Company is exposed to the risks arising from any failure of systems and
controls in the operations of the Investment Manager, the Administrator, or
the Company's other service providers. Under normal circumstances members of
the Audit & Risk Committee visit the Investment Manager annually to
perform a due diligence review of its controls and the Board receives reports
annually from the Administrator on their internal controls.
Environmental and Social ("E&S") impact risk:
The potential loss or harm directly or indirectly resulting from environmental
and social factors that impact the Company, its investors and its service
providers, and the consequential impact on the environment and society.
E&S impact risk is a transverse risk that impacts our other risks:
investment performance risk, currency and emerging market risk, operational
non-financial risk, legal and regulatory risk and reputation risk. Our
investment manager has developed a qualitative scoring model which measures
climate and other environmental impacts and the reporting thereof by the
Company's investment portfolio companies. The Investment Manager has an
advisory team on the ground in India who keep abreast of the latest political
developments and economic forecasts and regularly advise the Board thereof.
The Board considers the reports from the Investment Manager and determines
whether the Company is detrimentally affected.
Accounting, legal and regulatory risk:
The Company is at risk if it fails to comply with the laws and regulations
applicable to a company with a premium listing on the Main Market of the
London Stock Exchange and the Guernsey, Mauritian and Indian laws and
regulations or if it fails to maintain accurate accounting records. The
Investment Manager and Administrator are both regulated entities. The Board
receives quarterly compliance reports which are reviewed and challenged where
necessary. The Investment Manager and Administrator provide the Board with
regular reports on changes in regulations and accounting requirements. Legal
advice is taken where appropriate. Any breaches are addressed as soon as they
are highlighted to the Board and appropriate action is taken to rectify.
Going concern
The Board made an assessment of the Company's ability to continue as a going
concern for the twelve months from the date of approval of these unaudited
condensed financial statements taking into account all available information
about the future including the liquidity of the investment portfolio held both
by the Company and its subsidiary, ICG Q Limited (83.1% of the portfolio can
be liquidated within 5 days); the performance of the investment portfolio; the
overall size of the Company and its impact on the Ongoing Charges of the
Company (the NAV of the Company exceeded £100m throughout the year); the
level of operating expenses covered by highly liquid investments held in the
portfolio (operating expenses are more than 50 times covered by highly liquid
investments); and the length of time to remit funds from India to Mauritius
and Guernsey to settle ongoing expenses (no more than 10 working days to have
investments liquidated and sterling funds in Guernsey).
Given the Company's previous performance, the Directors proposed a
continuation ordinary resolution at the Extraordinary General Meeting held on
12 June 2020, at which the Shareholders approved that the Company continue as
currently constituted and introduce a Redemption Facility which gives the
ordinary shareholders the ability to redeem part or all of their shareholding
at a Redemption Point every two years. The first Redemption Point was on 31
December 2021 when valid redemption requests were received in respect of
ordinary shares which were subsequently redeemed under the Redemption Facility
in accordance with the announced timetable.
The second Redemption Point was on 31 December 2023 when valid redemption
requests were received in respect of 15,159,876 ordinary shares (15.7% of the
then issued share capital) which were subsequently redeemed under the
Redemption Facility at a total cost of £26.2m in accordance with the
announced redemption price on 8 January 2024. During 2024, to satisfy demand
in the market, the Company issued over 5.8m shares from Treasury at a premium
to NAV raising over £10.5m in new capital, and bought back 1.6,m shares at a
significant discount to NAV. In 2025 to date, further buybacks were made
subsequent to the year end, details of which can be found in Note 8 to the
Financial Statements. As at 29 August 2025 the Company's NAV was £154.4m.
The next date at which shareholders will be able to request the redemption of
some or all of the shares will take place on 28 November 2025. for
shareholders on the register at 29 August 2025. This was approved by
shareholders at the Company's AGM on 5 June 2025. Based upon the performance
of the Company to date, the results of the previous two redemptions, and the
increase of the proportion of retail shareholders seeking long term value
growth on the share register since the last Redemption Facility on 31 December
2023, the Board believes shareholder redemptions at the forthcoming Redemption
Facility on 29 November 2025 are likely to be at such a level not to impact
the going concern of the Company.
The Directors are satisfied that the Company has sufficient liquid resources
to continue in business for the next twelve months, therefore the unaudited
condensed financial statements have been prepared on a going concern basis.
Approved by the Board of Directors and signed on behalf of the Board on 24
September 2025.
Lynne Duquemin
Patrick Firth
STATEMENT OF DIRECTORS' RESPONSIBILITY IN RESPECT OF THE HALF-YEARLY FINANCIAL
REPORT
We confirm that to the best of our knowledge:
a) the condensed set of financial statements has been
prepared in accordance with UK-adopted IAS 34 'Interim Financial Reporting';
b) the interim director's report includes a fair review
of the information required by DTR 4.2.7R (indication of important events and
their impact during the first six months and description of principal risks
and uncertainties for the remaining six months of the year); and
c) the interim Director's report includes a fair review
of the information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
Signed on behalf of the Board by:
Lynne
Duquemin
Patrick Firth
UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 30 June 2025
Unaudited Unaudited Audited
Six months Six months Year to
to 30.06.25 to 30.06.24 31.12.24
Notes Revenue £000 Capital £000 Total Total Total
£000
£000
£000
Income
Dividend income 146 - 146 202 471
Foreign exchange loss (371) - (371) (196) (531)
Net (loss)/gain on financial assets at fair value through profit or loss 5 - (16,183) (16,183) 16,261 26,400
("FVTPL")
Management fees from subsidiary 11 555 - 555 761 1,464
Total income 330 (16,183) (15,853) 17,028 27,804
Expenses
Management fees 11 (887) - (887) (925) (1,944)
Operating expenses 3 (280) - (280) (392) (706)
Transaction costs (21) - (21) (56) (84)
Total expenses (1,188) - (1,188) (1,373) (2,734)
(Loss)/profit for the period/year before taxation (858) (16,183) (17,041) 15,655 25,070
Taxation 6 (25) 311 286 (502) (1,630)
Total comprehensive (loss)/income for the period/year after taxation (883) (15,872) (16,755) 15,153 23,440
Earnings per Ordinary Share (pence) 4 (19.60) 17.40 27.04
4 (19.60) 17.40
Diluted earnings per Ordinary Share (pence) 27.04
The total column of this statement represents the Company's statement of
comprehensive income, prepared in accordance with IFRS Accounting Standards as
adopted by the UK. The supplementary revenue and capital columns are both
prepared under guidance published by the Association of Investment Companies,
as disclosed in the Basis of Preparation in note 1.
The profit after tax is the "total comprehensive income" as defined by IAS 1.
There is no other comprehensive income as defined by IFRS Accounting Standards
and all the items in the above statement derive from continuing operations.
UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION
As at 30 June 2025
Unaudited Unaudited Audited
30.06.25 30.06.24 31.12.24
Notes £000 £000 £000
Non-current asset
Financial asset designated at fair value through profit or loss ("FVTPL") 5 157,229 169,216 171,300
Current assets
Cash and cash equivalents 12 6,860 4,877 9,507
Other receivables and prepayments 311 623 1,337
7,171 5,500 10,844
Current liability
Payables and accruals (269) (236) (277)
Net current assets 6,902 5,264 10,567
Non-current liability
Deferred taxation 6 (2,199) (1,552) (2,510)
Net assets 161,932 172,928 179,357
Equity
Share capital 8 854 868 858
Reserves 161,078 172,060 178,499
Total equity 161,932 172,928 179,357
Number of Ordinary Shares in issue 8 85,415,644 86,811,872 85,810,644
NAV per Ordinary Share (pence) 189.58 199.20 209.01
- Undiluted and diluted
The unaudited condensed financial statements were approved and authorised for
issue by the Board of Directors on 24 September 2025 and signed on its behalf
by:-
Lynne Duquemin
Patrick Firth
UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY
For the six months to 30 June 2025
Share Capital £000 Capital Reserve £000 Revenue Reserve £000 Other Distributable Reserve £000 Total £000
Notes
Balance as at 1 January 2025 858 135,919 (10,524) 53,104 179,357
Loss on investments 5 - (15,872) - - (15,873)
Share repurchase 8 (4) - - (666) (670)
Total comprehensive loss for the period - - - (883) (882)
Balance as at 30 June 2025 854 120,047 (10,524) 51,555 161,932
For the six months to 30 June 2024
Share Capital £000 Capital Reserve £000 Revenue Reserve £000 Other Distributable Reserve £000 Total £000
Notes
Balance as at 1 January 2024 963 111,056 (10,524) 72,007 173,502
Gain on investments 5 - 15,802 - - 15,802
Share issue 8 63 - - 11,390 11,453
Share repurchase 8 (158) - - (27,022) (27,180)
Total comprehensive loss for the period - - - (649) (649)
Balance as at 30 June 2024 868 126,858 (10,524) 55,726 172,928
For the year ended 31 December 2024
Share Capital £000 Capital Reserve £000 Revenue Reserve £000 Other Distributable Reserve Total £000
Notes £000
Balance as at 1 January 2024 963 111,056 (10,524) 72,007 173,502
Gain on investments 5 - 24,863 - - 24,863
Share issue 8 63 - - 11,390 11,453
Share repurchase 8 (168) - - (28,870) (29,038)
Total comprehensive loss for the year - - - (1,423) (1,423)
Balance as at 31 December 2024 858 135,919 (10,524) 53,104 179,357
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
For the six months to 30 June 2025
Unaudited Unaudited Audited
30.06.25 30.06.24 31.12.24
Note £000 £000 £000
Cash flows from operating activities
Operating (loss)/profit (17,041) 15,655 25,070
Adjustments for:
Net loss/(gain) on financial asset at FVTPL 16,183 (16,261) (26,400)
Foreign exchange loss 371 196 531
Dividend income (146) (202) (471)
Decrease/(increase) in other receivables and prepayments 1,026 (432) (1,146)
(Decrease)/increase in payables and accruals (8) (18) 23
Cash generated from/(used) in operations 385 (1,062) (2,393)
Taxes paid (25) (43) (213)
Net cash flows generated from/(used in) operating activities 360 (1,105) (2,606)
Cash flows from investing activities
Dividend income 146 202 471
Acquisition of investments 5 (9,455) (34,544) (30,381)
Disposal of investments 5 7,343 51,238 55,130
Net cash flows (used in)/generated from investing activities (1,966) 16,896 25,220
Cash flows from financing activities
Issue of shares - 11,453 11,453
Redemption of shares (670) (27,180) (29,038)
Net cash flows used in financing activities (670) (15,727) (17,585)
Net (decrease)/increase in cash and cash equivalents during the period/year (2,276) 64 5,029
Cash and cash equivalents at the start of the period/year 9,507 5,009 5,009
Foreign exchange loss (371) (196) (531)
6,860 4,877 9,507
Cash and cash equivalents at the end of the period/year
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
For the six months to 30 June 2025
1. Material accounting policies
Basis of accounting
The unaudited condensed financial statements have been prepared in accordance
with IFRS Accounting Standards as adopted by the UK, IAS 34 'Interim Financial
Reporting' and, except as described below, the material accounting policies
set out in the statutory accounts of the Company for the year ended 31
December 2024.
Basis of preparation
The unaudited condensed financial statements do not include all of the
information required for a complete set of IFRS Accounting Standards financial
statements and should be read in conjunction with the consolidated financial
statements of the Company for the year ended 31 December 2024, which were
prepared under full IFRS Accounting Standards requirements.
Changes in material accounting policies
New and revised standards
The following standards and interpretations effective for the first time for
the financial period beginning on or after 1 January 2025:
· Amendments to IAS 21 The Effects of Changes in
Foreign Exchange Rates: Lack of Exchangeability
The above amendments are not expected to have a material impact on the
Company's unaudited condensed financial statements.
Standards and interpretations published, but not yet effective for the annual
period beginning on 1 January 2025:
· Amendments to IFRS 9 and IFRS 7: Classification
and Measurements of Financial instruments (applicable for annual periods
beginning on or after 1 January 2026)
· Amendments to IFRS 18: Presentation and
Disclosure in Financial Statements (applicable for annual periods beginning on
or after 1 January 2027)
The above amendments are not expected to have a material impact on the
Company's financial statements.
Going concern
The Board made an assessment of the Company's ability to continue as a going
concern for the twelve months from the date of approval of these unaudited
condensed financial statements taking into account all available information
about the future including the liquidity of the investment portfolio held both
by the Company and its subsidiary, ICG Q Limited (83.1% of the portfolio can
be liquidated within 5 days); the performance of the investment portfolio; the
overall size of the Company and its impact on the Ongoing Charges of the
Company (the NAV of the Company exceeded £100m throughout the year); the
level of operating expenses covered by highly liquid investments held in the
portfolio (operating expenses are more than 50 times covered by highly liquid
investments); and the length of time to remit funds from India to Mauritius
and Guernsey to settle ongoing expenses (no more than 10 working days to have
investments liquidated and sterling funds in Guernsey).
Given the Company's previous performance, the Directors proposed a
continuation ordinary resolution at the Extraordinary General Meeting held on
12 June 2020, at which the Shareholders approved that the Company continue as
currently constituted and introduce a Redemption Facility which gives the
ordinary shareholders the ability to redeem part or all of their shareholding
at a Redemption Point every two years. The first Redemption Point was on 31
December 2021 when valid redemption requests were received in respect of
ordinary shares which were subsequently redeemed under the Redemption Facility
in accordance with the announced timetable.
The second Redemption Point was on 31 December 2023 when valid redemption
requests were received in respect of 15,159,876 ordinary shares (15.7% of the
then issued share capital) which were subsequently redeemed under the
Redemption Facility at a total cost of £26.2m in accordance with the
announced redemption price on 8 January 2024. During 2024, to satisfy demand
in the market, the Company issued over 5.8m shares from Treasury at a premium
to NAV raising over £10.5m in new capital, and bought back 1.6,m shares at a
significant discount to NAV. In 2025 to date, further buybacks were made
subsequent to the year end, details of which can be found in Note 8 to the
Financial Statements. As at 29 August 2025 the Company's NAV was £154.4m.
The next date on which shareholders will be able to request the redemption of
some or all of the shares will be on 28 November 2025 for shareholders on the
register at 29 August 2025. This was approved by shareholders at the Company's
AGM on 5 June 2025. Based upon the performance of the Company to date, the
results of the previous two redemptions, and the increase of the proportion of
retail shareholders seeking long term value growth on the share register since
the last Redemption Facility on 31 December 2023, the Board believes
shareholder redemptions at the forthcoming Redemption Facility on 28 November
2025 are likely to be at such a level not to impact the going concern of the
Company.
The Directors are satisfied that the Company has sufficient liquid resources
to continue in business for the next twelve months, therefore the unaudited
condensed financial statements have been prepared on a going concern basis.
Determination of functional currency
'Functional currency' is the currency of the primary economic environment in
which the Company operates. If indicators of the primary economic environment
are mixed, then management uses its judgement to determine the functional
currency that most faithfully represents the economic effect of the underlying
transactions, events and conditions.
The Company's investments and transactions are denominated in United States
Dollar and Indian Rupee. The primary objective of the Company is to generate
returns and capital growth in Great British Pounds ("GBP") for the benefit of
its shareholder. The assets and liabilities of the Company and the cash flows
are predominantly GBP denominated. The Company's performance is also evaluated
in GBP. The determination of the Company's functional currency is determined
based on management's significant judgement in assessing the economic
environment in which the Company operates.
Accordingly, management has to exercise significant judgement in determining
the functional currency resulting from the use of different foreign currencies
in the Company's operations.
Investment management fees
Investment management fees are receivable from ICG Q and payable to Ocean Dial
Asset Management Limited. In previous reporting periods, both the investment
management fee payable and the investment management fee receivable have been
the same, and as such, had a net nil effect on the Statement of Comprehensive
Income. From January 2024, the method of calculation for these fees has been
updated. Investment management fees receivable from ICG Q are calculated based
on the NAV of ICG Q. Investment management fees payable to Ocean Dial Asset
Management Limited are based on the assets of ICGF. The overall burden of
investment management fees to ICGF remains unchanged at 1.25% of the lower of
the company's market capitalisation or net asset value calculated on a daily
basis and payable monthly. Investment management fees received in the period
ended 30 June 2025 totalled £555k (31 December 2024: £1,702k, 30 June 2024:
£761k). Investment management fees paid in the period ended 30 June 2025
totalled £887k (31 December 2024: £1,944k, 30 June 2024: £925k).
2. Critical accounting judgements and key sources of estimation uncertainty
Directors make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about the carrying value of assets and liabilities that are
not readily apparent from other sources. The Company makes estimates and
assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equate to the related actual results.
Critical accounting judgements
IFRS 10 defines an investment entity and requires a reporting entity that
meets the definition of an investment entity not to consolidate its
subsidiaries, but instead to measure its subsidiaries at FVTPL in its
financial statements.
An investment entity is defined as an entity that:
· Obtains funds from one or more investors for the
purpose of providing them with professional investment management services.
· Commits to its investor(s) that its business
purpose is to invest funds solely for returns from capital appreciation,
investment income, or both.
· Measures and evaluates performance of
substantially all of its investments on a fair value basis.
The Board has concluded that the Company is an investment entity as it
satisfies more than one of the typical characteristics of an investment entity
as noted above.
Key sources of estimation uncertainty
The Company invests in listed shares for which no estimation is required to
determine the closing values. The underlying investments in ICG Q are all
listed securities. All other components of ICG Q's NAV pertain to instruments
which do not require estimation. Details of the valuation methodologies and
assumptions applied in determining the fair value of the Company's investments
and sensitivities to those assumptions,
are disclosed in note 9.
3. Operating expenses
Unaudited Unaudited Audited
Year
Six months Six months
to 30.06.25 to 30.06.24 to 31.12.24
£000 £000 £000
Administration and secretarial fees 45 46 96
Audit fee 31 36 69
Broker fee 17 15 43
D&O insurance 8 4 8
Directors' fees and expenses 68 74 144
General expenses 27 18 54
Marketing expenses 37 48 81
Other professional fees 30 123 132
Registrar fee 4 13 16
Regulatory fees 13 15 40
Other expenses - - 23
280 392 706
4. Earnings per share
Earnings per Ordinary Share and the fully diluted earnings per Ordinary Share
are calculated on the loss for the period of £16,755,000 (30 June 2024 -
profit of £15,152,985) divided by the weighted average number of Ordinary
Shares of 85,489,346 (30 June 2024 - 87,086,286) which is £(19.60) (30 June
2024: £17.40).
5. Financial assets at fair value through profit or loss ("FVTPL")
Financial assets at FVTPL consists of investments in securities listed on
Indian Stock Exchanges, namely the National Stock Exchange or the Bombay Stock
Exchange, as well as investment in the wholly owned subsidiary, ICG Q Limited.
A summary of movements is shown below:
Unaudited Unaudited Audited
Six months Six months Year to
to 30.06.25 to 30.06.24 31.12.24
Total Total Total
£000 £000 £000
Fair value at beginning of period/year 171,300 169,649 169,649
Disposal of investments (7,343) (51,238) (55,130)
Acquisition of investments 9,455 34,544 30,381
Realised gain on disposal of investments 3,457 27,598 41,306
Unrealised loss on revaluation (19,640) (11,337) (14,906)
Fair value at end of period/year 157,229 169,216 171,300
The net realised and unrealised loss above totalling £16,183,000 (30 June
2024: £16,261,000) on financial assets at FVTPL comprise the loss on the
Company's holding in ICG Q Limited to the extent of £9,636,000 (30 June 2024:
gain of £12,096,000) and loss of £6,547,000 (30 June 2024: gain of
£4,165,000) arising from investments in securities listed on Indian stock
markets. The movement arising from the Company's holding in ICG Q Limited is
driven by the following amounts within the financial statements of ICG Q
Limited, as set out below.
Unaudited Unaudited Audited
Six months Six months Year to
to 30.06.25 to 30.06.24 31.12.24
Total Total Total
£000 £000 £000
Dividend income 179 247 599
Unrealised loss on financial assets at FVTPL (14,868) (3,524) (3,923)
Foreign exchange (loss)/gain (1,500) 1,025 285
Realised gain on disposal of investments 6,360 16,118 28,188
Investment management fees (555) (761) (1,464)
Other operating expenses (53) (49) (98)
Withholding tax on dividend income (37) (52) (125)
Deferred taxation for Indian CGT 1,326 675 (1,026)
Taxation (461) (1,594) (3,465)
Transaction costs (27) (64) (104)
Other income - 75 -
Net (loss)/profit of ICG Q Limited (9,636) 12,096 19,017
The equity investment represents ICG Q Limited, the Company's wholly owned
subsidiary. ICG Q Limited is incorporated and has its principal place of
business in the Republic of Mauritius. The Company holds Participating Shares
in ICG Q Limited, which confer voting rights to the Company, hence controlling
interests.
6. Taxation
Guernsey
India Capital Growth Fund Limited is exempt from taxation in Guernsey on
non-Guernsey sourced income. The Company is exempt under The Income Tax
(Exempt Bodies) (Guernsey) Ordinance 1989 (as amended) and paid the annual
exemption fee of £1,200. For the period ended 30 June 2025, the Company had a
tax liability of £Nil (2024: £Nil).
India
Capital gains arising from equity investments in Indian companies are subject
to Indian Capital Gains Tax Regulations. Consequently, with effect from July
2024, the Company and its subsidiary, ICG Q Limited, have been subject to both
short and long-term capital gains tax in India on the growth in value of their
investment portfolios at the rate of 20% and 12.5% respectively. Although this
additional tax only becomes payable at the point at which the underlying
investments are sold and profits crystallised, the Company and its subsidiary
must accrue for this additional cost as a deferred taxation liability,
notwithstanding that they seek to minimise the impact of these taxation rates
applicable to capital gains by maintaining its investment strategy of
investing in a concentrated portfolio for long-term capital appreciation. An
amount of £120,000 was paid during 2024. The Indian Capital Gains Tax
deferred tax liability is determined at each month end by the Company's India
Tax Agent based upon the period each investment has been held and the Indian
Capital Gains Tax Regulations in force at the time of that assessment. The
deferred taxation liability relating to Indian capital gains tax for the
Company was £2,199,000 at 30 June 2025 (30 June 2024: £1,552,000) (31
December 2024: £2,510,000) and for its subsidiary was £7,533,000 at 30 June
2025 (30 June 2024: £7,153,000) (31 December 2024: £8,859,000).
Dividend withholding tax
The Company and its subsidiary are also subject to withholding tax on their
dividend income in India. The withholding tax charge for the Company for the
period ended 30 June 2025 was £24,000 (30 June 2024: £43,000) and for its
subsidiary was £37,000 (30 June 2024: £52,000).
Minimum top-up tax
The Company has adopted mandatory exception to the International Tax Reform -
Pillar Two Model Rules (Amendments to IAS 12) upon their release on 23 May
2023. The amendments provide a temporary mandatory exception from deferred tax
accounting for the top-up tax, which is effective immediately, and require new
disclosures about the Pillar Two exposure. However, because no new legislation
to implement the top-up tax was enacted or substantively enacted in India
hence no related deferred tax was recognised at that date, the retrospective
application has no impact on the Company's financial statements. The adoption
of Pillar Two by Guernsey effective 1 January 2025 does not have an impact on
the Company.
7. Segmental information
The Board has considered the provisions of IFRS 8 in relation to segmental
reporting and concluded that the Company's activities are from a single
segment under the standard. From a geographical perspective, the Company's
activities are focused in a single area - India. The subsidiary, ICG Q
Limited, focuses its investment activities in listed securities in India.
Additional disclosures have been provided in the 2024 Annual Report as
elaborated in the Directors' Report therein.
8. Share capital
Authorised Share Capital
Unlimited number of Ordinary Shares of £0.01 each
Issued share capital Number of shares Share capital
£000
At 30 June 2025 85,415,644 854
At 30 June 2024 86,811,872 868
At 31 December 2024 85,810,644 858
The Ordinary Shares of the Company carry the following rights:
(i) The holders of Ordinary Shares have the right to
receive in proportion to their holdings all the revenue profits of the Company
(including accumulated revenue reserves) attributable to the Ordinary Shares
as a class available for distribution and determined to be distributed by way
of interim and/or final dividend at such times as the Directors may determine.
(ii) On a winding-up of the Company, after paying all the
debts attributable to and satisfying all the liabilities of the Company,
holders of the Ordinary Shares shall be entitled to receive by way of capital
any surplus assets of the Company attributable to the Ordinary Shares as a
class in proportion to their holdings.
(iii) Subject to any special rights or restrictions for the
time being attached to any class of shares, on a show of hands every member
present in person has one vote. Upon a poll every member present in person or
by proxy has one vote for each share held by him.
Treasury Shares
There was a total buy back of 395,000 ordinary shares during the period ended
30 June 2025. These shares were transferred from Issued Share Capital Account
to Treasury Shares Account and were purchased at a discount to the Net Asset
Value per share, as per below:
Date Number of shares Par Value (£) Discount on Buy Back Price (£) Value of Buy back (£)
day of Buy back
20 January 2025 15,000 2.05 10.7% 1.83 27,450
21 January 2025 150,000 1.99 11.0% 1.77 265,000
22 January 2025 50,000 1.94 11.1% 1.73 86,250
06 February 2025 25,000 1.93 11.0% 1.72 43,000
12 February 2025 55,000 1.87 9.7% 1.69 92,675
14 February 2025 50,000 1.79 10.6% 1.60 80,000
04 March 2025 50,000 1.68 10.0% 1.51 75,000
395,000 670,375
Other distributable reserves
Other distributable reserves includes all other gains and losses during the
year except for the realised and unrealised gains and losses on the
investments measured at FVTPL. Other distributable reserves also includes
foreign exchange gains and losses made on ordinary transactions, dividend
income and general expenses, as well as taxation.
9. Fair value of financial instruments
The following tables show financial instruments recognised at fair value,
analysed between those whose fair value is based on:
· Quoted prices in active markets for identical
assets or liabilities (Level 1);
· Those involving inputs other than quoted prices
included in Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
· Those with inputs for the asset or liability that
are not based on observable market data (unobservable inputs) (Level 3).
The analysis as at 30 June 2025 is as follows:
Level 1 Level 2 Level 3 Total
£000 £000 £000 £000
Listed securities 66,189 - - 66,189
Unlisted securities - 91,040 - 91,040
66,189 91,040 - 157,229
The analysis as at 30 June 2024 is as follows:
Level 1 Level 2 Level 3 Total
£000 £000 £000 £000
Listed securities 56,076 - - 56,076
Unlisted securities - 113,140 - 113,140
56,076 113,140 - 169,216
The analysis as at 31 December 2024 is as follows:
Level 1 Level 2 Level 3 Total
£000 £000 £000 £000
Listed securities 65,924 - - 65,924
Unlisted securities - 105,376 - 105,376
65,924 105,376 - 171,300
The Company's investment in ICG Q Limited, the Company's wholly owned
subsidiary is priced based on the subsidiary's NAV as calculated as at the
reporting date. The Company has the ability to redeem its investment in ICG Q
Limited at the NAV at the measurement date therefore this is categorised as
level 2. The classification within the hierarchy does not necessarily
correspond to the Investment Manager's perceived risk of the investment, nor
the level of the investments held within the subsidiary. All the underlying
investments of ICG Q Limited are categorised as level 1 at 30 June 2025 and
2024. The period-end fair value of those investments, together with cash held
in ICG Q Limited, comprise all but an insignificant proportion of the NAV of
the subsidiary.
There has been no movement between levels for the period ended 30 June 2025.
There were no changes in valuation techniques during the period ended 30 June
2025.
10. Financial instruments and risk profile
The primary objective of the Company is to provide long-term capital
appreciation by investing predominantly in companies based in India. The
investment policy permits making investments in a range of equity and equity
linked securities of such companies. The portfolio of investments comprises of
listed Indian companies, predominantly mid cap and small cap. The specific
risks arising from exposure to these instruments and the Investment Manager's
policies for managing these risks, which have been applied throughout the
period, are summarised below:
Capital management
The Company is a closed-ended investment company and thus has fixed capital
for investment. It has no legal capital regulatory requirement. The Board has
the power to purchase shares for cancellation thus reducing capital and the
Board considers on a regular basis whether it is appropriate to exercise such
powers. In the period ended 30 June 2025, the Board determined that it was
inappropriate to exercise such powers, although continuation of these powers
will be sought at the Annual General Meeting.
The Board also considers from time to time whether it may be appropriate to
raise new capital by a further issue of shares. The raising of new capital
would, however, be dependent on there being genuine market demand (see note
8).
Environmental and social ("E&S") impact risk
E&S impact risk is a transverse risk that impacts most of our other risks:
market risk, foreign currency risk, credit risk, liquidity risk, operational
non-financial risk, legal and regulatory risk, and reputation risk. Our
Investment Manager has developed a qualitative scoring model which measures
climate and other environmental impacts and the reporting thereof by the
Company's investment portfolio companies.
The Investment Manager considers all factors that may have a financial
material impact on returns. Climate change is a key factor. The related
physical and transition risks are vast and are becoming increasingly
financially material for many investments. Not only in the obvious
high-emitting sectors, such as energy, utilities and transportation, but also
along the supply chain, providers of finance and in those reliant on
agricultural outputs and water. It is important that the financial
implications of material climate-change risks are assessed across all asset
classes, including real assets, and make portfolios more resilient to climate
risk. Comparable climate-related data is necessary to enable effective
decision making and is something the Investment Manager actively sources and
incorporates into its process and scoring model. Regular engagement with all
investee companies allows the Investment Manager to better understand their
exposure and management of climate change risks and influence corporate
behaviour positively in relation to climate risk management. There have been
no financial material impacts as a result of E&S risk.
Market risk
Market price risk arises mainly from the uncertainty about future prices of
the financial instruments held by the Company and its subsidiary, ICG Q
Limited ("the Group"). It represents the potential loss the Group may suffer
through holding market positions in the face of price movements.
The Group's investment portfolio is exposed to market price fluctuations,
including the impact of inflation, which are monitored by the Investment
Manager in pursuit of the investment objectives and policies and in adherence
to the investment guidelines and the investment and borrowing powers set out
in the Admission Document. The Group's investment portfolio is concentrated
and, as at 30 June 2025, comprised investment in 37 (30 June 2024: 35)
companies. Thus, the Group has higher exposure to market risk in relation to
individual stocks than more broadly spread portfolios.
The Investment Manager has a team on the ground in India who keep abreast of
the latest political developments and economic forecasts that may impact the
listed equities market in India and regularly advise the Board thereof.
The Group's investment portfolio (refer to pages 11 to 13) consists
predominantly of mid cap and small cap listed Indian securities, and thus the
effect of market movements is not closely correlated with the principal market
index, the BSE Sensex. The BSE Mid Cap Total Return Index provides a better
(but not ideal) indicator of the effect of market price risk on the portfolio.
Assuming perfect correlation, the sensitivity of the Group's investment
portfolio to market price risk can be approximated by applying the percentage
of funds invested (31 December 2024: 94.8%; 30 June 2024: 96.5%) to any
movement in the BSE Mid Cap Total Return Index.
At 30 June 2025, with all other variables held constant, this approximation
would produce a movement in the net assets of the Group's investment portfolio
of £16,197,565 (30 June 2024: £17,523,492) for a 10% (2024: 10%) movement in
the index which would impact the Company via a fair value movement of the same
magnitude in its holding in ICG Q Limited and its investments.
Foreign currency risk
Foreign currency risk arises mainly from the fair value or future cash flows
of the financial instruments held by the Group fluctuating because of changes
in foreign exchange rates. The Group's investment portfolio consists of
predominantly Rupee denominated investments but reporting, and in particular
the reported NAV, is denominated in Sterling. Any appreciation or depreciation
in the Rupee would have an impact on the performance of the Company. The
underlying currency risk in relation to the Group's investment portfolio is
the Rupee. The Group's policy is not to hedge the Rupee exposure. The Group
may enter into currency hedging transactions but appropriate mechanisms on
acceptable terms are not expected to be readily available.
At 30 June 2025, if the Indian Rupee had strengthened or weakened by 10% (30
June 2024: 10%) against Sterling with all other variables held constant,
pre-tax profit for the period would have been £15,207,935 (30 June 2024:
£18,897,800) higher or lower, respectively, mainly as a result of foreign
exchange gains or losses on translation of Indian Rupee denominated financial
assets designated at FVTPL in ICG Q Limited, the consequent impact on the fair
value of the Company's investment in ICG Q Limited and in the Company's
investment portfolio.
Credit risk
Credit risk arises mainly from an issuer or counterparty being unable to meet
a commitment that it has entered into with the Company. Credit risk in
relation to securities transactions awaiting settlement is managed through the
rules and procedures of the relevant stock exchanges. In particular
settlements for transactions in listed securities are effected by the
custodian on a delivery against payment or receipt against payment basis.
Transactions in unlisted securities are effected against binding subscription
agreements.
The principal credit risks are in relation to cash held by the custodian.
Kotak Mahindra Bank Limited ("Kotak") acts as the custodian to the Company.
The aggregate exposure to Kotak at 30 June 2025 was £3,292,333 (30 June 2024:
£4,058,943) (31 December 2024: £3,127,763).
Kotak acted as custodian of the Company's assets during the period. The
securities held by Kotak as custodian are held in trust and are registered in
the name of the Company. Kotak has a long-term credit rating of AAA (2024:
AAA) (CRISIL Ratings - a S&P company).
Interest rate risk
Interest rate risk represents the uncertainty of investment return due to
changes in the market rates of interest. The direct effect of movements in
interest rates is not material as any surplus cash is predominantly in Indian
Rupees, and foreign investors are not permitted to earn interest on Rupee
balances.
Liquidity risk
Liquidity risk arises mainly from the Group encountering difficulty in
realising assets or otherwise raising funds to meet financial commitments. As
the trading volume on the Indian stock markets is lower than that of more
developed stock exchanges the Group may be invested in relatively illiquid
securities. The Group has no unlisted securities, and its focus is to invest
predominantly in mid and small cap listed stocks. However, there remain
holdings where there is relatively little market liquidity, which may take
time to realise. The Directors do not believe that the market is inactive
enough to warrant a discount for liquidity risk on the Group's investment
portfolio. ICG Q Limited seeks to maintain sufficient cash to meet its working
capital requirements.
The Directors do not believe it to be appropriate to adjust the fair value of
the Company's investment in ICG Q Limited for liquidity risk, as it has the
ability to affect a disposal of any investment in ICG Q Limited's investment
portfolio at the prevailing market price and the distribution of proceeds back
to the Company should it so wish.
All liabilities are current and due on demand.
Taxation risk
Taxation risk arises mainly from the taxation of income and capital gains of
ICG Q Limited and the Company increasing as a result of changes in the tax
regulations and practice in Guernsey, Mauritius and India. The Company and ICG
Q Limited are registered with the Securities and Exchange Board of India
(SEBI) as a foreign portfolio investor (FPI) with a Category I licence, and
ICG Q Limited holds a Global Business Licence in Mauritius and has obtained a
Mauritian Tax Residence Certificate (TRC) which have been factors in
determining its resident status under the India-Mauritius Double Taxation
Avoidance Agreement (DTAA) and General Anti Avoidance Rules (GAAR) under the
Income Tax Act 1961 (ITA).
However, with effect from April 2017, the DTAA was amended such that the
advantages of investing in India via Mauritius were removed and capital gains
arising from investments in Indian companies are subject to Indian Capital
Gains Tax regulations. With effect from 22 July 2024 the short-term
(investments held for less than 12 months) Indian CGT rate increased from 15%
to 20% and the long-term Indian CGT rate increased from 10% to 12.5%. Full
deferred tax provision is made for Indian CGT applying to the investment
portfolio.
The Group seeks to minimise the impact of these changes in the taxation rates
applicable to its capital gains by maintaining its investment strategy of
investing in a concentrated portfolio for long-term capital appreciation.
11. Related party transactions and material contracts
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions. The Directors are responsible for
the determination of the investment policy and have overall responsibility for
the Company's activities. Directors' fees are disclosed fully in each Annual
Report.
During the period 2025, the investment management fee was equivalent to 1.25
per cent per annum of the lower of the Company's market capitalisation or
aggregate value of its assets less current liabilities, calculated and payable
monthly in arrears. The Investment Manager earned £555,000 in management fees
during the six months ended 30 June 2025 (six months ended 30 June 2024:
£761,000 and year ended 31 December 2024: £1,944,000) of which £97,000 was
outstanding at 30 June 2025 (30 June 2024: £108,000 and 31 December 2024:
£181,000).
From March 2024, the method of calculation for these fees has been updated.
Investment management fees receivable from ICG Q are calculated based on the
NAV of ICG Q. Investment management fees payable to Ocean Dial Asset
Management Limited are based on the assets of ICGF. The calculation of
investment management fees payable to Ocean Dial Asset Management Limited
remains unchanged.
Under the terms of the Administration Agreement, Apex Fund and Corporate
Services (Guernsey) Limited is entitled to a minimum annual fee of US$41,000
or a fee of 5 basis points of the NAV of the Company, whichever is greater.
The Administrator is also entitled to reimbursement of all out-of-pocket
expenses recoverable by way of a fixed disbursement charge of US$50 per month
excluding all international calls and courier. The Administrator earned
£45,000 for administration and secretarial services during the period ended
30 June 2025 (six months ended 30 June 2024: £46,000 and year ended 31
December 2024: £96,000) of which £33,000 was outstanding at 30 June 2025 (30
June 2024: £22,000 and 31 December 2024: £24,000).
12. Cash and cash equivalents
Cash and cash equivalents are comprised of:
Unaudited Unaudited Audited
Six months Six months Year to
to 30.06.25 to 30.06.24 31.12.24
Total Total Total
£000 £000 £000
Cash at bank 4,135 4,877 5,307
Short-term investment 2,725 - 4,200
6,860 4,877 9,507
13. Contingent liabilities
The Directors are not aware of any contingent liabilities at 30 June 2025 and
at the date of approving these financial statements.
14. Ultimate controlling party
In the opinion of the Directors of the Company, the Company has no ultimate
controlling party.
15. Subsequent events
There are no material events since the end of the reporting period which would
require disclosure or adjustment to the financial statements for the period
ended 30 June 2025.
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