JPMorgan Indian Investment Trust (JII) has announced a package of proposals aimed at tackling persistent underperformance and a stubborn share price discount, following the conclusion of its strategic review and shareholder consultation. JII’s board says it remains committed to the existing quality-growth investment strategy, led by managers Amit Mehta and Sandip Patodia, and has ruled out any change in mandate. It cited recent improvements in performance and valuations, as well as JPMorgan’s deepening research coverage in the Indian market – now reaching around 85% of market capitalisation.
Discount control: from conditional to concrete
In a key shift, the board will drop the current performance-linked tender (25% of shares in 2025, conditional on NAV underperformance) and instead implement a more immediate and robust discount control regime, including:
- A 30% tender offer at close to NAV, expected in the third quarter of 2025
- Ongoing market buybacks targeting a single-digit discount
- A new triennial 100% tender offer at a 3% discount to NAV, starting in the second quarter of 2028 (subject to a £150m NAV floor)
If take-up of the 2028 tender threatens to shrink the company below scale, the board reserves the right to propose a wind-up instead.
New dividend policy to differentiate
JII also plans to introduce a dividend equivalent to 4% of year-end NAV, paid quarterly, starting from the current financial year. This would make it the only Indian equity investment trust currently paying a dividend, with the board hoping it will attract a broader investor base. The dividend will be funded from income and capital reserves, subject to amending the company’s articles, which will be voted on at the same time as the 2025 tender.
Fee reduction
From 1 October 2025, the base management fee will fall to 0.65% on the first £300m of assets (down from 0.75%) and 0.55% above that level (from 0.60%).
Chair’s view
Chair Jeremy Whitley said the measures were aimed at revitalising interest in the trust and creating a foundation for future growth. He acknowledged the difficult recent period but reaffirmed the board’s belief in India’s long-term investment case and JPMorgan’s strategy.
The trust is expected to issue circulars in due course with full details of the proposed tender and article changes.
[QD comment MR: This is a bold package of reforms from JPMorgan Indian Investment Trust but one that is necessary in our view. There is no denying that performance has struggled since the shift in management in 2022 – a function of its focus on growth companies that have been weighed down by an environment of higher inflation and interest rates – and is the source of its problems. We think that, first and foremost, this needs fixing. However, in the meantime, replacing the old conditional tender with a near-term 30% exit and introducing a rolling triennial tender, the board has sent a clear signal it’s serious about tackling the discount – and providing real liquidity options for shareholders.
The introduction of a quarterly dividend also differentiates JII as it will now be the only Indian fund offering income, which could open the door to a wider pool of investors, particularly those focused on total return.
The board has reaffirmed its faith in the quality-growth approach and the increased efforts to manage the discount, alongside the improved fee structure and growing allocation to small and mid-caps, should buy the strategy some time to prove itself. Sentiment towards India appears strong and this package gives JII and opportunity to reset and potentially grow again if it is successful. If not, we expect that JII’s beleaguered shareholders will cash in their chips.]
