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India Capital Growth shareholders made 59% in 2017

India Capital Growth shareholders made 59% in 2017 – India Capital Growth had a great 2017, returning 59% to shareholders and delivering a 42.3% return on its NAV. The NAV just failed to beat its notional benchmark, the BSE Midcap, which returned 45.3%. The 3% underperformance arose in December when three significant portfolio holdings corrected after a strong year. The discount narrowed from 18% at the start of the year to 8% by year end. The chairman says that small and mid cap stocks outperformed large cap stocks, driven primarily by an ongoing resurgence in investment by Indian retail investors. She says that locals are being drawn to equities and bonds, many for the first time, principally as a consequence of the Government’s concerted efforts to shrink the black economy.

The manager says that positive contribution to the portfolio during the year came from Dewan Housing (142% up), Ramkrishna Forgings (204% up), Sobha (153% up), Federal Bank (64% up), Motherson Sumi (75% up) and Balkrishna Industries (118% up). Negative contribution came from Capital First (16% down), Neuland Labs (14% down) and Matrimony (5% down). Overall, there were 13 stocks which went up by over 50% and only three stocks which had negative returns in 2017.

[QD comment: There is more information on these stocks in our notes, the most recent of which, “Moving to the main board“, was published on 30 January 2018. The three stocks that the chairman was referring to include Dewan Housing (down 5.5% in December 2017) and NIIT Technologies.]

IGC : India Capital Growth shareholders made 59% in 2017

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