India Capital Growth – Don’t Stop Believin’

India Capital Growth’s (IGC’s) adviser, Gaurav Narain, says that at a time when many economies and equity markets are struggling, there are many reasons to be optimistic about the outlook for the Indian economy. Although down in sterling absolute terms during the last 12 months, the Indian market made progress in local currency terms and has performed well relative to its emerging market peers, benefitting from a good run in the second half of 2022 from which IGC also benefitted. Despite the recent market setback YTD, Gaurav thinks there is more to come, noting that business confidence is high (both the services and manufacturing PMIs were over 55 at the end of February and have been around this level for some time – see page 5). Gaurav notes that valuations remain elevated even after the recent setback, but says that recent volatility has thrown up opportunities. IGC’s own discount may also offer value. There is a redemption opportunity where the exit discount is set at a maximum 3% of NAV at the end of the year and the additional resource that the manager’s absorption into AssetCo is expected to bring (see page 3) could also be beneficial.