REG - abrdn New India IT. - Half-Yearly Financial Report
28/11/2024 07:00
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RNS Number : 9007N abrdn New India Investment Trust 28 November 2024
abrdn New India Investment Trust plc
Seeking world-class, well governed companies at the heart of India's growth
Why invest in India?
Aspiration
India's population is the largest in the world with an expanding middle class
which will drive consumption growth.
Building India
Urbanisation and infrastructure development have multiplier effects for job
creation and the wider economy.
Renewables
India has committed to meeting half of its energy needs from renewable sources
by 2030.
Domestic opportunities
Global businesses are investing in, and shifting production to, India, drawn
by a wealth of incentives and opportunities.
Exporting talent
India's giant tech service sector, built on a highly educated and diligent
workforce, drives the export of services by helping global companies keep pace
with the fast-changing tech innovation landscape.
Digitalisation
India has made immense progress in digital investments, which will underpin
its rise to be one of the largest global economies by the middle of the
century.
Why invest in abrdn New India Investment Trust plc?
Robust financial strength and sustainable competitive advantage
Indian companies meeting a quality threshold are included in the portfolio,
displaying both strong financial characteristics and a consistent competitive
advantage in attractive industries or sectors.
Engaged Management
Quality of management is a key attribute sought in portfolio companies. The
management of the best companies in India is world-class and understands the
importance of sustainability and good governance to drive the best outcomes
for investors and other stakeholders.
Return of growth stocks
The portfolio's focus on those Indian companies with the desire and capacity
to expand will drive performance. As interest rates peak globally, investors
will seek out growth stocks which are set to benefit.
Performance Highlights
Performance (total return in Sterling terms)
Six months ended Year ended
30 September 2024 31 March 2024
% %
Share price(A) +23.6 +27.3
Net asset value per Ordinary share(A) +18.6 +27.8
Adjusted net asset value per Ordinary share(A) +22.8 +31.9
MSCI India Index (Sterling adjusted) +11.6 +34.4
(A) Considered to be an Alternative Performance Measure.
Source: abrdn plc, Morningstar & Factset
Performance (total return in Sterling terms) for year(s) ended 30 September 2024
1 year 3 year 5 year 10 year
% return % return % return % return
Share price(A) +38.5 +22.5 +63.8 +184.0
Net asset value per Ordinary Share(A) +34.0 +30.4 +72.5 +204.3
MSCI India Index (Sterling adjusted) +28.2 +41.7 +100.5 +218.4
(A) Considered to be an Alternative Performance Measure.
Source: abrdn, Morningstar & Factset
Financial Highlights and Financial Calendar
Financial Highlights
30 September 2024 31 March 2024 % change
Equity shareholders' funds (net assets) £489,081,000 £427,054,000 + 14.5
Share price (mid-market) 806.00p 652.00p + 23.6
Net asset value per share 972.34p 819.56p + 18.6
Adjusted net asset value per share(A) 1,033.78p 841.58p + 22.8
Discount to net asset value(AB) 17.1% 20.4%
Net gearing(A) 2.1% 4.1%
Ongoing charges ratio(A) 0.94% 1.00%
Rupee to Sterling exchange rate 112.41 105.36 - 6.7
(A) Considered to be an Alternative Performance Measure.
(B) Based on unadjusted net asset value per share.
Financial Calendar
Financial year end March 2025
Expected announcement of annual results for the year ending 31 March 2025 June 2025
Annual General Meeting (London) September 2025
Chairman's Statement
Dear Shareholder
India continues to shine as one of the brighter spots in the Asia-Pacific
region. The economy is growing steadily, driven by well-known structural
trends such as a booming real estate market, robust infrastructure
development, and supportive public policies that have gradually reduced the
cost of doing business. The stock market has also been performing
exceptionally well, ranking among the best-performing emerging markets in
recent quarters.
In the six months ended 30 September 2024, your Company's net asset value
("NAV") rose by 22.8% in sterling terms (total return), after adjustment for
Indian capital gains tax accruals, continuing the strong turnaround witnessed
in performance over the last 12 months. The Company's share price increased by
23.6%, resulting in a discount to NAV of 17.1%, an improvement on the figure
of 20.5% at the end of March. I am pleased to report that, in addition to
delivering strong absolute returns, your Company has also significantly
outperformed the MSCI India Index (the "Benchmark"), which rose by 11.6% in
total return terms. A further consequence of the Company's higher net assets
at 30 September 2024, as compared to 31 March 2024, is a pleasing reduction in
the ongoing charges from 1.00% to 0.94%.
While India has delivered impressive market performance, many investors are
understandably concerned about valuations. Indeed, stocks do appear expensive
in many market segments, particularly in the small-and-mid-cap space. However,
your Manager remains optimistic, believing that in many cases these valuations
are well-supported by earnings growth. Corporate India is in good shape, with
good growth prospects, healthy balance sheets, low debt, and competent
management teams, justifying the prevailing stock prices of high-quality
companies including those held in your Company's portfolio.
Overview
The six months under review witnessed an unexpected election upset. Prime
Minister Narendra Modi's Bharatiya Janata Party ("BJP") was compelled to form
a coalition government after failing to secure an outright majority. Despite
this, cabinet selection, where most of the major ministries remained with the
BJP, indicated political continuity. This was further reinforced by a surprise
victory for the BJP in the subsequent Haryana state election.
With further, important state elections on the horizon, any unforeseen defeats
in those polls could magnify scrutiny of PM Modi's leadership of the coalition
government. In the first budget announced by this new government, fiscal
consolidation remained on track and capital infrastructure spending was
robust. The government also introduced measures aimed at addressing gaps in
the economy, particularly around consumption, rural demand, and employment.
Another key development was the US Federal Reserve's 0.5% rate cut in
September, signalling a shift towards monetary easing in the world's largest
economy. This move could provide a short-term boost to the Indian stock market
and attract more foreign investment. Over the longer term, it is likely to
prompt the Reserve Bank of India to follow suit with rate cuts which would
lower borrowing costs, thereby supporting economic growth. India's economy
grew by 8.2% in the fiscal year 2024, surpassing the previous year's rate of
7%. While growth has since moderated, on a quarterly basis, the outlook
remains robust.
During the period, the Indian Rupee has been weak due to the strength of both
Sterling and the US dollar, despite India's strong domestic fundamentals. With
strong foreign exchange reserves, the Reserve Bank of India ("RBI") is
well-equipped to intervene in the markets as needed. This capability allows
the RBI to manage liquidity to contain excessive volatility and alleviate
sharp depreciation of the rupee, thus ensuring stability.
Performance
Delving deeper into your Company's performance for the six months, I am
pleased to report that the largest positive contributions to relative returns
came from good stock picking in the energy, financials, and real estate
sectors. Your Manager's off-benchmark investments in some of these sectors
have paid off, as has the decision to avoid holding Benchmark bellwether
Reliance Industries.
In particular, the investments in small-cap and-mid-cap stocks were among the
top contributors over the six months. Financial services firm KFin
Technologies, and energy company Aegis Logistics performed well. Anticipating
structural opportunities, your Manager proactively increased the holdings of
both companies, despite the inherent short-term volatility of such stocks.
The real estate sector, where the portfolio has a significant exposure
compared to the Benchmark, once again emerged as a top contributor to your
Company's outperformance. As I highlighted in the previous 31 March 2024
Annual Report, India is experiencing a long overdue recovery in residential
property sales and the long-term prospects remain bright. Additionally, the
portfolio's core telecommunication holdings in Bharti Airtel and its
subsidiary Bharti Hexacom performed satisfactorily, supported by solid
fundamentals. Following the elections in June, Bharti Airtel, along with other
Indian telecom operators, raised mobile tariffs for the first time in three
years, helping to boost topline growth. Further information on performance
drivers and changes made to the portfolio during the six months is available
in the Investment Manager's Report.
The Board and I remain confident in the Company's long-term growth potential.
Your Manager has adapted the portfolio to prevailing market conditions while
considering new ideas that are poised to benefit from positive structural
trends.
Gearing
The Company's present bank facility, for up to £30m, is due for renewal in
August 2025. At 31 March 2024, the Company had borrowed £26m of this facility
but, in June 2024, £6.5m was repaid to leave £19.5m drawn down. While the
Board considers that employing gearing, over the long term, contributes to
returns for shareholders and is an important differentiating feature of
investment companies, this is balanced against the higher cost of bank
interest incurred.
Conditional tender offer
In March 2022, the Board announced the introduction of a five-yearly
performance-related conditional tender offer. Following discussions with the
Investment Manager, the Board decided that, should the Company's NAV total
return underperform the Company's Benchmark over the five-year period from 1
April 2022, then shareholders should be offered the opportunity to realise up
to 25% of their investment for cash at a level close to NAV. For these
purposes, the Company's NAV per share was to be adjusted for Indian capital
gains tax (the 'Adjusted NAV') to enable a like-for-like comparison with the
Benchmark. The Board monitors the Company's performance and is pleased to
report that, from 1 April 2022 to 30 September 2024, which marks the halfway
point of the five-year measurement period to 31 March 2027, the Adjusted NAV
total return was 48.3%, ahead of the Benchmark's total return of 41.1%.
Impact of Indian Capital Gains Tax
The Company, along with other investment vehicles, is subject to both
short-term and long-term capital gains taxes in India on the growth in the
value of its investment portfolio. These taxes are only paid when the
underlying investments are sold and profits are crystalised, however,
accounting standards require that funds accrue for any unrealised long term
capital gains taxes. These accruals are deducted from the net asset value of
the portfolio and therefore also affect the Company's performance figures. By
contrast, taxes on unrealised capital gains are not accrued for or reflected
in the Benchmark. Regrettably, the Indian Government increased the rates for
capital gains tax in July 2024 which, added to the increase in the value of
the investment portfolio over the period, has resulted in a significant
increase in the tax accrual (see note 4 for further information).
Board
The Board was pleased to announce, on 20 November 2024, the appointment of
Irina Miklavchich as a Director of the Company following a search conducted by
an independent recruitment consultancy. Irina brings to the Board considerable
and relevant investment management experience, with a particular focus on
emerging market equities, including India.
Shareholder Engagement
The Board encourages shareholders to visit the Company's website
(www.abrdnnewindia.co.uk), other social media channels (including X, formerly
Twitter, and Linked-In) for the latest information and access to podcasts,
thought-leadership articles and monthly factsheets. The Board is seeking to
improve the information available to shareholders and to encourage greater
interaction. Further to this, the Board has supported the enhancement of the
website, alongside more frequent updates by the Investment Manager.
Discount and Share Buybacks
The Board continues to monitor actively the discount of the Ordinary share
price to the NAV per Ordinary share and pursues a policy of selective buybacks
of shares where to do so, in the opinion of the Board, is in the best
interests of shareholders, whilst also having regard to the overall size of
the Company.
Over the six months, the discount to NAV narrowed from 20.5% to 17.1% as the
Company bought back 1.8m Ordinary shares for holding in treasury, resulting in
50,299,638 Ordinary shares with voting rights and a further 8,770,502 shares
held in treasury. Unfortunately, the discount remains volatile and was 20.3%
as at 26 November 2024, the latest practicable date before approval of this
Report.
The Board believes that a combination of stronger long-term performance and
effective marketing communication should increase demand for the Company's
shares and reduce the discount to NAV at which they trade, over time.
Outlook
India presents numerous compelling attractions for investors, some of which
have already been highlighted. The country boasts favourable demographics,
including a large, relatively young population and a growing middle class.
Rising disposable incomes are driving consumption to become increasingly
aspirational. Indian corporations are becoming more sophisticated, expanding
their presence beyond its borders, and starting to compete on an international
level.
However, investing in India requires accepting market volatility and a degree
of risk. Some of the potential near-term challenges include a spike in global
energy prices, due to heightened tensions in the Middle East and a slowdown in
the global economy, where India is affected as a net oil importer. There also
remains concern, from certain quarters, that valuations of Indian companies
are high and this has been reflected to a degree in recent falls in the
market.
President-elect Donald Trump's return to the White House in January 2025
increases uncertainty. While geopolitics remains a concern, India's
international standing is comparatively robust, supported by strong ties with
the US, Europe, and ASEAN. Moreover, India remains more insulated from global
macroeconomic concerns due to its growing domestic economy.
Your Board is confident that your Manager has assembled a portfolio of
high-quality companies with strong balance sheets that can profit from pricing
power at each stage of the economic cycle.
Michael Hughes
Chairman
27 November 2024
Investment Manager's Report
Market review
In the six months ended 30 September 2024, the Company's net asset value
("NAV") rose by 22.8% in sterling terms (total return), adjusted for Indian
capital gains tax.
Since the beginning of 2023, the Company has clawed back a substantial part of
the previous underperformance witnessed over calendar years 2021 and 2022,
as we have stuck to a long-term quality investment philosophy and by
repositioning the portfolio towards structurally attractive segments with long
growth runways. The Company delivered strong absolute returns over the six
months that were significantly ahead of the 11.6% total return for the
Benchmark.
As the Chairman notes in his Statement, India has had an exceptionally strong
run in recent years. GDP growth for the last fiscal year surpassed 8% while
the stock market has outperformed its emerging market peer China, as well as
the broader Asia-Pacific region, since 2021. Though we have seen some slowdown
in growth momentum according to the most recent quarterly GDP figures, there
remain ample signs of a resilient domestic economy.
For one, corporate India remains in relatively good shape, with good growth
prospects, healthy balance sheets and competent management teams. Earnings
growth has been robust, with the MSCI India delivering around 20% earnings
growth for the fiscal year 2023-2024. This has moderated around the election
period, as was expected, and over the medium term, estimates suggest about 12%
earnings growth across the board should be achievable. We believe that the
quality of growth will be sustainable. Moreover, signs are emerging of a
gradual pick-up in private sector capex, which would provide an additional leg
to growth alongside the government-led spending into infrastructure
development.
Meanwhile, some parts of the market are looking hotter than usual, such as the
small-and-mid-cap segment that has benefitted from strong domestic flows
pushing up share prices in recent years. We have remained selective in our
exposure to this part of the market, and this has largely paid off for this
interim period.
On the flip side, demand in rural India remains soft, which in turn has
affected the broad-based recovery in domestic consumption. The election
outcome - with the formation of a BJP-led coalition government - and the
subsequent budget announcement in July offer encouraging signs of policy
support being directed towards reviving rural consumption.
Performance overview
The strongest returns came from stock selection in the energy, financials,
real estate, and communication services sectors, which helped to offset the
weakness from consumption.
Aegis Logistics emerged as the top stock performer as investors finally
recognised what we had long seen - that this was a high quality, high growth
small-cap stock that had been mispriced in the market. We scaled up the
holding due to our strong conviction, despite the inherent volatility of
small-cap stocks. With our long-term approach, we are prepared to endure
short-term volatility and maintain our position.
We took a similar approach with our off-benchmark position in financial
services firm, KFin Technologies, which rose following good results supported
by a strong domestic equity market and steady mutual fund flows. This is a
relatively new initiation into the portfolio in the small-cap space, where we
have remained selective considering how expensive the segment has become.
While KFin trades on quite a high valuation multiple, we could see several
factors supporting this such as the growth of domestic asset management, a
buoyant capital market, and opportunities abroad. To reflect our growing
conviction, we proactively scaled up the holding and have been well rewarded
in terms of the stock's performance over the period
Within the banking sub-sector, our holdings in higher quality private lenders
such as ICICI Bank and HDFC Bank performed better than their lower quality
peers in the market amid concerns over the impact on the latter of interest
rate cuts on deposit costs.
Our repositioning of the portfolio towards industrial names and capex proxies
did well over the period. We previously identified the industrials sector as a
beneficiary of the pick-up in government spending on infrastructure
development. The Company's core telecommunication services names, Bharti
Airtel and its subsidiary, Bharti Hexacom, were among the top stock performers
in the portfolio. Both names have relatively robust balance sheets and growing
momentum in non-cellular businesses. Recently, after the June parliamentary
elections, Bharti Airtel, along with its peers, hiked mobile tariffs. This
move, the first one in about three years, is in line with our investment
thesis that consolidation and rational competition would pave the way for
tariff increases in the sector, particularly given that mobile data prices are
exceptionally cheap compared to other markets.
Elsewhere, property holdings also added to performance. Godrej Properties and
Prestige Estates both benefitted from the ongoing recovery in the residential
property market where we continue to see a plethora of tailwinds. To that
effect, we introduced a new property name, Brigade Enterprises, towards the
end of the review period.
Not holding Reliance Industries was the second largest stock contributor to
returns. This Benchmark bellwether has been weak due to lower margins in its
oil refining division margins while its retail business growth has also slowed
over the last few quarters. We avoid the name, and its subsidiaries, on
corporate governance grounds and concerns around capital allocation.
Meanwhile, healthcare cost us some performance as Global Health (Medanta)
corrected due to slower-than-expected margin ramp-up at some of its developing
hospitals, partially offsetting the positive performance at its mature
hospitals. Vijaya Diagnostic Centre, on the other hand, did well after
reporting good results including high-teens organic revenue growth that is
well ahead of the industry.
Performance in the consumer sectors was relatively soft. Within consumer
discretionary, not holding online food delivery platform Zomato and retail
company Trent proved costly. This was partially offset by Mahindra &
Mahindra, which performed well thanks to continued progress in its core autos
business. Auto parts maker Uno Minda also contributed to performance.
Overall, the underlying fundamentals of our portfolio remain sound, and our
companies continue to report healthy earnings growth, mostly in line with
expectations.
Portfolio activity
During the period, we continued introducing attractive stocks that met our
quality criteria from a bottom-up perspective and supported by favourable
structural trends. In the property sector, we introduced Brigade Enterprises,
which has businesses in residential, office, retail, and hospitality segments
and a strong management. We also added one of India's leading plastic
processing manufacturers, Supreme Industries. This company supplies pipes to
the property sector, amongst others, so is a second order beneficiary of the
upswing in the property cycle.
Within health care, we initiated Poly Medicure, a manufacturer and supplier of
single-use medical devices with a strong history of growing annual revenues.
Meanwhile, we introduced hospitality company Indian Hotels, which has evolved
from a single brand luxury hotel to encompass brands across the hospitality
range, catering to different price segments.
Finally, we participated initial public offering in Bharti Hexacom's. which is
the cleanest way to play improving fundamentals in the Indian telecom sector.
To partially fund the new initiations, we exited our positions in Fortis
Healthcare, Affle India, and the Container Corporation of India as our
conviction in these names fell.
Outlook
India remains one of the world's fastest-growing major economies, supported by
a resilient macro backdrop. Growth momentum is driven by supportive central
government policies following a decade of painful, but necessary economic
reforms. In July 2024, the new coalition government's first budget indicated
fiscal consolidation was on track, with robust capex allocation for
infrastructure development, while efforts were made to address consumption,
rural demand, and employment.
That said, at the time of writing, we have seen a pullback in the equity
market, driven by various factors including a rotation into China and the
outcome of the US presidential election. What we are watching closely is a
slowdown in Indian corporate earnings growth based on the latest reporting
season. We expect the softness to remain for the next couple of quarters, but
our base case is that the growth returns sometime in 2025.
Meanwhile, we are still finding plenty of pockets of good growth and quality
across various sectors and sub-sectors. The Company's downside is
well-protected given our quality focus, and our defensive holdings are in a
good position in case of profit taking. In our view, any correction in the
market would be an opportunity to add to the holdings. The consistency of
earnings growth of the overall portfolio remains healthy and company
fundamentals, such as pricing power, balance sheet strength, and the ability
to sustain margins, remain solid and where they may have faltered, we have
taken action to resize or exit the positions to insulate the portfolio.
India faces near-term external risks, such as potentially higher global energy
prices and a global economic slowdown. Oil prices turned volatile in September
due to the escalating conflict in the Middle East. The key to leveraging this
market's potential is bottom-up stock picking backed by fundamental research,
aligning well with our investment approach.
The Company's downside is well-protected given our quality focus, and our
defensive holdings are in a good position in case of profit taking.
Furthermore, any correction in the market would be an opportunity to add to
the holdings. The consistency of earnings growth of the portfolio remains
healthy and individual company fundamentals, such as pricing power, strong
balance sheets and the ability to sustain margins, remain solid.
James Thom and Rita Tahilramani
abrdn Asia Limited
Investment Manager
27 November 2024
Investment Case Study
Pidilite Industries
In 1959, Pidilite founder Shri B K Parekh started his business by selling a
single product; a white synthetic resin or glue called Fevicol. From these
humble beginnings, the company has now grown into the dominant player in the
domestic adhesives and sealants market with Fevicol becoming a household
brand, instantly recognisable across the country by consumers. Pidilite now
offers thousands of products across a portfolio of more than 25 brands.
Why do we like the investment?
As investors in India, we seek out high quality businesses with strong market
positions and clear sustainable sources of competitive advantage. Pidilite
checks all these boxes. It has a portfolio of very strong brands with often
dominant market share in its categories. It is run by a proven management and
consistently maintains a solid balance sheet. Primarily a distribution-driven
branded adhesives products business, Pidilite is a play on housing and
renovation demand, which has both cyclical and structural tailwinds given the
government's affordable housing drive and the strong upswing we are seeing in
the Indian property market currently. The company has an enviable track record
of creating brands that are synonymous with the category and management
aspires to continue doing the same by entering underserved categories within
the home improvement market. It is the clear leader in its core business and
generates enviable returns and cash flows, reflecting its ability to manage
crude oil-based input costs that can swing margins.
Pidilite has a diversified product portfolio across three categories. Core
refers to established brands with high market maturity and strong share
position, such as Fevicol. Growth includes emerging categories with
significant potential for market growth or share gain, such as waterproofing
products like Dr Fixit (with a marketing campaign fronted by actor and former
politician Amitabh Bachchan). Finally, Pioneer brings together embryonic
product lines with attractive market creation opportunities such as epoxy
grouts and industrial adhesives and solutions for stone surfaces. This is
where Pidilite management's strategy of forming partnerships and joint
ventures with European companies, most recently Tenax (solutions for stone,
granite and marble surfaces) and Litokol (epoxy grouts for floors and walls)
stands out. Its foreign partners transfer their intellectual property (IP) to
Pidilite, which excels at adapting the IP for the fast-moving local Indian
market and establishing a dominant market share. We believe this is a key
competitive edge that sets Pidilite apart from its rivals, and places it well
for growth in the years ahead.
Meanwhile, Pidilite tracks well on the ESG front, too. It has been disclosing
its sustainability goals, strategy and progress against goals since FY
2018-19. In FY2024, it focused on combating climate change, serving people and
communities and responsible value creation. For example, Pidilite has set up a
1.8MW off-site solar farm in Upleta, Gujarat. It has also minimised the use of
virgin plastic in its product packaging and began using Post Consumer Recycle
plastics.
Ten Largest Investments
As at 30 September 2024
ICICI Bank Power Grid Corporation of India
ICICI Bank has been delivering superior growth and returns improvement without Power Grid Corporation of India forms the backbone of India's electricity
compromising on asset quality. It has leveraged on its scale as well as retail infrastructure. It is poised to play a key role in the growth of renewable
and digital franchise to grow in mortgages and also growing off a low base in energy delivery to the grid over the next few decades as the government plans
business banking and SMEs. ambitious renewable targets for the electricity sector.
HDFC Bank Tata Consultancy Services
HDFC Bank is India's leading private sector bank that now has a complete suite A top-class Indian IT services provider with the most consistent execution and
of retail banking products after the merger with HDFC, India's leading lowest attrition rates. It is a long-term compounder with a decent outlook for
provider of mortgage finance. The bank has solid underwriting standards and a revenue growth and order wins over the medium term.
progressive digital stance, further strengthening its competitive edge.
Mahindra & Mahindra Bharti Airtel
With two main operating divisions, autos and farm equipment, Mahindra & Bharti Airtel remains the leading telecom service provider with a pan-India
Mahindra is expected to enjoy the benefits of a strong SUV model cycle, new reach and sophisticated customer base with higher average mobile spending.
line-up of electric vehicles and capital allocation improvement from the group
level.
Infosys Aegis Logistics
One of India's best software developers, it continues to impress with its A strong and conservative player in India's gas and liquid logistics sector,
strong management, solid balance sheet and sustainable business model. Aegis Logistics has capacity to expand. In addition, the government's push
for the adoption of cleaner energy has boosted its liquefied natural gas
business.
SBI Life Insurance Godrej Properties
Among the leading domestic life insurers, SBI Life's competitive edge comes Indian property developer Godrej Properties remains well positioned to be a
from a wide reach of SBI branches, highly productive agents, a low cost ratio key beneficiary of the domestic real estate industry's up-cycle with a strong
and a reputable brand. brand, established platform, good access to capital and the lowest cost of
debt in the sector.
Portfolio
As at 30 September 2024
2024
Valuation Total assets
Company Sector £'000 %
ICICI Bank Financials 39,161 7.7
Power Grid Corporation of India Utilities 26,757 5.2
HDFC Bank Financials 26,464 5.2
Tata Consultancy Services Information Technology 25,841 5.1
Mahindra & Mahindra Consumer Discretionary 25,823 5.1
Bharti Airtel Communication Services 25,233 5.0
Infosys Information Technology 23,855 4.7
Aegis Logistics Energy 22,665 4.4
SBI Life Insurance Financials 19,715 3.9
Godrej Properties Real Estate 17,144 3.4
Top ten investments 252,658 49.7
Vijaya Diagnostic Centre Health Care 14,774 2.9
UltraTech Cement Materials 14,639 2.9
Axis Bank Financials 14,018 2.8
KFIN Technologies Financials 13,881 2.7
Cholamandalam Investment and Finance Financials 13,591 2.7
J.B. Chemicals & Pharmaceuticals Health Care 12,302 2.4
Hindustan Unilever Consumer Staples 12,116 2.4
Siemens Industrials 11,869 2.3
KEI Industries Industrials 11,003 2.2
Havells India Industrials 10,886 2.1
Top twenty investments 381,737 75.1
Hindalco Industries Materials 10,360 2.0
Indian Hotels Consumer Discretionary 9,251 1.8
Info Edge Communication Services 9,177 1.8
Nestlé India Consumer Staples 9,088 1.8
ABB India Industrials 8,978 1.8
Phoenix Mills Real Estate 8,301 1.6
Tata Consumer Products Consumer Staples 8,247 1.6
Pidilite Industries Materials 7,585 1.5
Titan Consumer Discretionary 7,500 1.5
Global Health India Health Care 7,485 1.5
Top thirty investments 467,709 92.0
APAR Industries Industrials 7,009 1.4
PB Fintech Financials 6,757 1.3
UNO Minda Consumer Discretionary 6,516 1.3
Prestige Estates Projects Real Estate 6,280 1.2
Bharti Hexacom Communication Services 5,899 1.1
Aptus Value Housing Finance Financials 5,711 1.1
Supreme Industries Materials 4,793 0.9
Syngene International Health Care 4,412 0.9
Coromandel International Materials 4,394 0.9
Coforge Information Technology 4,388 0.9
Top forty investments 523,868 103.0
Brigade Enterprises Real Estate 3,303 0.6
Maruti Suzuki India Consumer Discretionary 2,813 0.6
Poly Medicure Health Care 2,564 0.5
Total investments 532,548 104.7
Net liabilities (before deducting prior charges)(A) (23,996) (4.7)
Total assets(A) 508,552 100.0
(A) Excluding loan balances.
Other Matters
Investment Objective
The investment objective of the Company is to provide shareholders with long
term capital appreciation by investment in companies which are incorporated in
India, or which derive significant revenue or profit from India, with dividend
yield from the Company being of secondary importance.
Investment Policy
The Company primarily invests in Indian equity securities. Further information
on the Company's investment policy may be found on page 12 of the Annual
Report for the year ended 31 March 2024 (the "Annual Report") which is
published on the Company's website.
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the Company are set out
in detail on pages 14 to 16 of the Annual Report. The principal risks and
uncertainties may be summarised under the following headings:
· Strategic risk
· Market risk
· Poor investment performance
· Discount
· Single country risk
· Supplier risk
· Financial and regulatory
· Gearing; and
· Unlisted securities
In addition, the Board has identified, as an emerging risk which it considers
is likely to become more relevant for the Company in the future, the
implications for the Company's investment portfolio of a changing climate. The
Board assesses this emerging risk as it develops, including how investor
sentiment is evolving towards climate risk within investment portfolios and
will consider how the Company may mitigate this risk, together with any other
emerging risks, if and when they become material.
These principal risks and uncertainties, and emerging risks, are not expected
to change materially for the remaining six months of the Company's financial
year ending 31 March 2025.
The Board also notes the increasing and broader geo-political issues which may
have implications for the Company's portfolio.
Going Concern
In accordance with the Financial Reporting Council's guidance on Going Concern
and Liquidity Risk, the Directors have reviewed the Company's ability to
continue as a going concern. The Company's assets consist of a diverse
portfolio of listed equity shares which in most circumstances are realisable
within a short timescale.
The Directors are conscious of the principal risks and uncertainties disclosed
on pages 14 to 16 and in Note 17 of the Annual Report.
In August 2022, the Company announced that it had entered into a three year,
£30 million revolving credit facility with The Royal Bank of Scotland
International Limited (the "Facility"), of which £19.5m was fully drawn down
at 30 September 2024 (30 September 2023 - £26.0m). The Board has set limits
for borrowing and regularly reviews the level of any gearing and compliance
with banking covenants.
In advance of expiry of the Facility in August 2025, the Company will enter
into negotiations with its bankers. If acceptable terms are available from the
existing bankers, or any alternative, the Company would expect to continue to
access a facility. However, should these terms not be forthcoming, any
outstanding borrowing would be repaid through the proceeds of equity sales.
After making enquiries, including a review of revenue forecasts, the Directors
have a reasonable expectation that the Company possesses adequate resources to
continue in operational existence for the foreseeable future and for at least
12 months from the date of this Report. Accordingly, they continue to adopt
the going concern basis of accounting in preparing the financial statements.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Half Yearly Financial Report,
in accordance with applicable law and regulations. The Directors confirm that,
to the best of their knowledge:
· the condensed set of Financial Statements has been prepared in accordance
with Financial Reporting Standard 104 (Interim Financial Reporting);
· the Half Yearly Board Report includes a fair review of the information
required by rule 4.2.7R of the Disclosure Guidance and Transparency Rules
(being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
Financial Statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year); and
· the Half Yearly Board Report includes a fair review of the information
required by 4.2.8R of the Disclosure Guidance and Transparency Rules (being
related party transactions that have taken place during the first six months
of the financial year and that have materially affected the financial position
of the Company during that period; and any changes in the related party
transactions described in the last Annual Report that could do so).
The Half Yearly Financial Report for the six months ended 30 September 2024
comprises the Interim Board Report, including the Statement of Directors'
Responsibilities and a condensed set of Financial Statements.
For and on behalf of the Board
Michael Hughes
Chairman
27 November 2024
Condensed Statement of Comprehensive Income
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Income
Income from investments 3 2,813 - 2,813 3,013 - 3,013 4,722 - 4,722
Interest 3 82 - 82 82 - 82 181 - 181
Gains on investments held at fair value through profit or loss - 96,560 96,560 - 49,629 49,629 - 106,805 106,805
Currency losses - (248) (248) - (103) (103) - (403) (403)
2,895 96,312 99,207 3,095 49,526 52,621 4,903 106,402 111,305
Expenses
Investment management fees (1,760) - (1,760) (1,430) - (1,430) (2,964) - (2,964)
Administrative expenses (497) - (497) (490) - (490) (957) - (957)
Profit/(loss) before finance costs and taxation 638 96,312 96,950 (1,175) 49,526 50,701 982 106,402 107,384
Finance costs (1,070) - (1,070) (1,330) - (1,330) (2,544) - (2,544)
(Loss)/profit before taxation (432) 96,312 95,880 (155) 49,526 49,371 (1,562) 106,402 104,840
Taxation 4 (284) (19,431) (19,715) (301) (5,237) (5,538) (472) (13,346) (13,818)
(Loss)/profit for the period (716) 76,881 76,165 (456) 44,289 43,833 (2,034) 93,056 91,022
(Loss)/return per Ordinary share (pence) 5 (1.40) 149.90 148.50 (0.83) 80.72 79.89 (3.77) 172.62 168.85
The Company does not have any income or expense that is not included in
(loss)/profit for the period, and therefore the "(Loss)/profit for the period"
is also the "Total comprehensive income for the period".
The total columns of this statement represent the Condensed Statement of
Comprehensive Income, prepared in accordance with IFRS. The revenue and
capital columns are supplementary to this and are prepared under guidance
published by the Association of Investment Companies. All items in the above
statement derive from continuing operations.
All of the (loss)/profit and total comprehensive income is attributable to the
equity holders of abrdn New India Investment Trust plc. There are no
non-controlling interests.
The accompanying notes are an integral part of these financial statements.
Condensed Statement of Financial Position
As at As at As at
30 September 30 September 31 March
2024 2023 2024
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 532,548 423,771 465,789
Current assets
Cash at bank 9,626 10,163 6,452
Receivables 402 1,319 2,403
Total current assets 10,028 11,482 8,855
Current liabilities
Bank loan 7 (19,471) (25,936) (25,953)
Other payables (1,748) (3,640) (2,231)
Total current liabilities (21,219) (29,576) (28,184)
Net current liabilities (11,191) (18,094) (19,329)
Non-current liabilities
Deferred tax liability on Indian capital gains 4 (32,276) (14,366) (19,406)
Net assets 489,081 391,311 427,054
Share capital and reserves
Ordinary share capital 8 14,768 14,768 14,768
Share premium account 25,406 25,406 25,406
Capital redemption reserve 4,484 4,484 4,484
Capital reserve 447,567 347,503 384,824
Revenue reserve (3,144) (850) (2,428)
Equity shareholders' funds 489,081 391,311 427,054
Net asset value per Ordinary share (pence) 10 972.34 725.75 819.56
The accompanying notes are an integral part of these financial statements.
Condensed Statement of Changes in Equity
Six months ended 30 September 2024 (unaudited)
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2024 14,768 25,406 4,484 384,824 (2,428) 427,054
Profit/(loss) for the period - - - 76,881 (716) 76,165
Buyback of share capital to treasury - - - (14,138) - (14,138)
Balance at 30 September 2024 14,768 25,406 4,484 447,567 (3,144) 489,081
Six months ended 30 September 2023 (unaudited)
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2023 14,768 25,406 4,484 313,655 (394) 357,919
Profit/(loss) for the period - - - 44,289 (456) 43,833
Buyback of share capital to treasury - - - (10,441) - (10,441)
Balance at 30 September 2023 14,768 25,406 4,484 347,503 (850) 391,311
Year ended 31 March 2024 (audited)
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2023 14,768 25,406 4,484 313,655 (394) 357,919
Profit/(loss) for the period - - - 93,056 (2,034) 91,022
Buyback of share capital to treasury - - - (21,887) - (21,887)
Balance at 31 March 2024 14,768 25,406 4,484 384,824 (2,428) 427,054
The Revenue reserve represents the amount of the Company's distributable
reserves.
Condensed Cash Flows Statement
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash flows from operating activities
Dividend income received 2,804 2,928 4,722
Interest income received 85 (3) (4)
Investment management fee paid (1,688) (501) (3,203)
Overseas withholding tax (584) (655) -
Other cash expenses (656) (429) (970)
Cash (outflow)/inflow from operations (39) 1,340 545
Interest paid (1,254) (1,113) (2,248)
Net cash inflow from operating activities (1,293) 227 (1,703)
Cash flows from investing activities
Purchases of investments (78,588) (39,222) (96,207)
Sales of investments 110,796 58,874 128,508
Indian capital gains tax paid on sales (6,561) (2,019) (5,088)
Net cash inflow from investing activities 25,647 17,633 27,213
Cash flows from financing activities
Buyback of shares (14,397) (10,757) (21,792)
Repayment of loan (6,500) (4,000) (4,000)
Costs associated with loan (35) (12) (41)
Net cash outflow from financing activities (20,932) (14,769) (25,833)
Net increase/(decrease) in cash and cash equivalents 3,422 3,091 (323)
Cash and cash equivalents at the start of the period 6,452 7,178 7,178
Effect of foreign exchange rate changes (248) (106) (403)
Cash and cash equivalents at the end of the period 9,626 10,163 6,452
There were no non-cash transactions during the period (six months ended 30
September 2023 - £22,000; year ended 31 March 2024 - 22,000).
Notes to the Financial Statements
For the six months ended 30 September 2024
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010.
2. Accounting policies
The Company's financial statements have been prepared in accordance with
International Accounting Standard ('IAS') 34 - 'Interim Financial Reporting',
as adopted by the International Accounting Standards Board (IASB), and
interpretations issued by the International Reporting Interpretations
Committee of the IASB (IFRIC). The Company's financial statements have been
prepared using the same accounting policies applied for the year ended 31
March 2024 financial statements, which received an unqualified audit report.
The financial statements have been prepared on a going concern basis. In
accordance with the Financial Reporting Council's guidance on 'Going Concern
and Liquidity Risk' the Directors have undertaken a review of the Company's
assets which primarily consist of a diverse portfolio of listed equity shares
which, in most circumstances, are realisable within a short timescale.
3. Income
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Income from investments
Overseas dividends 2,813 3,013 4,722
Other income
Deposit interest 82 82 172
Other interest - - 9
82 82 181
Total income 2,895 3,095 4,903
4. Taxation
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(a) Analysis of charge for the period
Indian capital gains tax charge on sales - 6,561 6,561 - 2,019 2,019 - 5,088 5,088
Overseas taxation 284 - 284 301 - 301 472 - 472
Total current tax charge for the period 284 6,561 6,845 301 2,019 2,320 472 5,088 5,560
Movement in deferred tax liability on Indian capital gains - 12,870 12,870 - 3,218 3,218 - 8,258 8,258
Total tax charge for the period 284 19,431 19,715 301 5,237 5,538 472 13,346 13,818
The Company is liable to Indian capital gains tax under Section 115 AD of the
Indian Income Taxes Act 1961.
During the year, Indian CGT rates changed; for long-term investments held the
rate changed from 10% to 12.5% and for short-term investments held the rate
changed from 15% to 20%. The Company has recognised a deferred tax liability
of £32,276,000 (30 September 2023 - £14,366,000; 31 March 2024 -
£19,406,000 deferred tax liability) on capital gains which may arise if
Indian investments are sold.
On 1 April 2020, the Indian Government withdrew an exemption from withholding
tax on dividend income. Dividends are received net of 20% withholding tax and
an additional charge of 4%. A further surcharge of either 2% or 5% is applied
if the receipt exceeds a certain threshold. Of this total charge, 10% of the
withholding tax is irrecoverable with the remainder being shown in the
Condensed Statement of Financial Position as an asset due for offset against
Indian capital gains or reclaim.
(b) Factors affecting the tax charge for the year or period. The tax charged for
the period can be reconciled to the (loss)/profit per the Condensed Statement
of Comprehensive Income as follows:
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Loss)/profit before tax (432) 96,312 95,880 (155) 49,526 49,371 (1,562) 106,402 104,840
UK corporation tax on profit at the standard rate of 25% (108) 24,077 23,969 (39) 12,381 12,342 (391) 26,601 26,210
Effects of:
Gains on investments held at fair value through profit or loss not subject to - (24,140) (24,140) - (12,407) (12,407) - (26,702) (26,702)
UK Corporation tax
Currency losses not taxable 62 62 - 26 26 - 101 101
Deferred tax not recognised in respect of tax losses 808 - 808 790 - 790 1,474 - 1,474
Corporate interest restriction - - - - - - 93 - 93
Expenses not deductible for tax purposes - - - 2 - 2 4 - 4
Indian capital gains tax charged on sales - 6,562 6,562 - 2,019 2,019 - 5,088 5,088
Realised gains on non-reporting offshore funds 3 - 3 - - - - - -
Movement in deferred tax liability on Indian capital gains - 12,870 12,870 - 3,218 3,218 - 8,258 8,258
Irrecoverable overseas withholding tax 284 - 284 301 - 301 472 - 472
Non-taxable dividend income (703) - (703) (753) - (753) (1,180) - (1,180)
Total tax charge 284 19,431 19,715 301 5,237 5,538 472 13,346 13,818
At 30 September 2024, the Company has surplus management expenses and loan
relationship debits with a tax value of £42,435,000 (30 September 2023 -
£9,116,000; 31 March 2024 - £39,202,000) based on enacted tax rates, in
respect of which a deferred tax asset has not been recognised. No deferred tax
asset has been recognised because the Company is not expected to generate
taxable income in the future in excess of the deductible expenses of those
future periods. Therefore, it is unlikely that the Company will generate
future taxable revenue that would enable the existing tax losses to be
utilised.
5. Return per Ordinary share
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Based on the following figures:
Revenue return (716) (456) (2,034)
Capital return 76,881 44,289 93,056
Total return 76,165 43,833 91,022
Weighted average number of Ordinary shares in issue 51,289,435 54,868,970 53,907,480
6. Transaction costs
During the period, expenses were incurred in acquiring or disposing of
investments classified as fair value through profit or loss. These have been
expensed through the capital column of the Condensed Statement of
Comprehensive Income, and are included within gains on investments at fair
value through profit or loss in the Condensed Statement of Comprehensive
Income. The total costs were as follows:
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Purchases 132 78 165
Sales 171 78 178
303 156 343
The above transaction costs are calculated in line with the AIC SORP. The
transaction costs in the Company's Key Information Document, provided by the
Manager, are calculated on a different basis and in line with the PRIIPs
regulations.
7. Bank loan
In August 2022, the Company entered into a three year £30 million
multi-currency revolving credit facility with The Royal Bank of Scotland
International Limited (London Branch). At 30 September 2024, £19.5 million
(30 September 2023 - £26 million; 31 March 2024 - £26 million) had been
drawn down at an all-in interest rate of 8.55% with a maturity date of 7
October 2024 (30 September 2023 - 8.531% until 2 October 2023; 31 March 2024 -
8.7873% until 2 April 2024. Subsequent to this the loan has been rolled over
and at the date of this report the Company had drawn down £19.5 million at an
all-in interest rate of 8.55%.
The bank loan recognised in the Condensed Statement of Financial Position is
net of amortised costs.
8. Ordinary share capital
During the period 1,808,272 Ordinary shares were bought back by the Company
for holding in treasury (period to 30 September 2023 - 1,891,673; year to 31
March 2024 - 3,702,011), at a cost of £14,127,000 (30 September 2023 -
£10,433,000; 31 March 2024 - £21,778,000). As at 30 September 2024 there
were 50,299,638 (30 September 2023 - 53,918,248; 31 March 2024 - 52,107,910)
Ordinary shares in issue, excluding 8,770,502 (30 September 2023 - 5,151,892;
31 March 2024 - 6,962,230) Ordinary shares held in treasury.
Following the period end a further 790,000 Ordinary shares were bought back
for treasury by the Company at a cost of £6.1m resulting in there being
49,509,638 Ordinary shares with voting shares in issue, excluding 9,560,502
Ordinary shares held in treasury as at 26 November 2024, the latest
practicable date before this Report was approved.
9. Analysis of changes in net debt
At At
31 March Currency Cash Non-cash 30 September
2024 differences flows movements 2024
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits 6,452 (248) 3,422 - 9,626
Debt due within one year (25,953) - 6,500 (18) (19,471)
(19,501) (248) 9,922 (18) (9,845)
At At
31 March Currency Cash Non-cash 31 March
2023 differences flows movements 2024
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits 7,178 (403) (323) - 6,452
Debt due within one year (29,918) - 4,000 (35) (25,953)
(22,740) (403) 3,677 (35) (19,501)
A statement reconciling the movement in net funds to the net cash flow has not
been presented as there are no differences from the above analysis.
10. Net asset value per Ordinary share
The net asset value per Ordinary share is based on a net asset value of
£489,081,000 (30 September 2023 - £391,311,000; 31 March 2024 -
£427,054,000) and on 50,299,638 (30 September 2023 - 53,918,248; 31 March
2024 - 52,107,910) Ordinary shares, being the number of Ordinary shares in
issue at the period end.
11. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify fair value
measurements using a fair value hierarchy that reflects the subjectivity of
the inputs used in making measurements. The fair value hierarchy has the
following levels:
Level 1: quoted (unadjusted) market prices in active markets for identical
assets or liabilities;
Level 2: valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable; and
Level 3: valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
The financial assets and liabilities measured at fair value in the Condensed
Statement of Financial Position and are grouped into the fair value hierarchy
at the Condensed Statement of Financial Position date are as follows:
Level 1 Level 2 Level 3 Total
As at 30 September 2024 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 532,548 - - 532,548
Net fair value 532,548 - - 532,548
Level 1 Level 2 Level 3 Total
As at 30 September 2023 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities a) 423,771 - - 423,771
Net fair value 423,771 - - 423,771
Level 1 Level 2 Level 3 Total
As at 31 March 2024 Note £'000 £'000 £'000 Total
Financial assets at fair value through profit or loss
Quoted equities a) 465,789 - - 465,789
Net fair value 465,789 - - 465,789
a) Quoted equities. The fair value of the Company's investments in quoted
equities has been determined by reference to their quoted bid prices at the
reporting date. Quoted equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
12. Related party transactions
The Company has an agreement with abrdn Fund Managers Limited (the "Manager")
for the provision of management, secretarial, accounting and administration
services and for carrying out promotional activity services in relation to the
Company.
During the period, the management fee was payable monthly in arrears and was
based on 0.8% per annum up to £300 million and 0.6% thereafter of the net
assets of the Company. The management agreement is terminable by either the
Company or the Manager on six months' notice. The amount payable in respect of
the Company for the period was £1,760,000 (six months ended 30 September 2023
- £1,430,000; year ended 31 March 2024 - £2,964,000) and the balance due to
the Manager at the period end was £591,000 (period end 30 September 2023 -
£1,687,000; year end 31 March 2024 - £520,000). All investment management
fees are charged 100% to the revenue column of the Statement of Comprehensive
Income.
The Company has an agreement with the Manager for the provision of promotional
activities in relation to the Company's participation in the abrdn Investment
Trust Share Plan and ISA. The total fees paid and payable under the agreement
during the period were £98,000 (six months ended 30 September 2023 -
£93,000; year ended 31 March 2024 - £190,000) and the balance due to the
Manager at the period end was £49,000 (period ended 30 September 2023 -
£93,000; year ended 31 March 2024 - £98,000).
13. Segmental information
For management purposes, the Company is organised into one main operating
segment, which invests in equity securities. All of the Company's activities
are interrelated, and each activity is dependent on the others. Accordingly,
all significant operating decisions are based upon analysis of the Company as
one segment. The financial results from this segment are equivalent to the
financial statements of the Company as a whole.
14. Half-Yearly Report
The financial information contained in this Half-Yearly Report does not
constitute statutory accounts as defined in Sections 434 - 436 of the
Companies Act 2006. The financial information for the six months ended 30
September 2024 and 30 September 2023 has not been audited.
The information for the year ended 31 March 2024 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the Independent Auditor on those
accounts contained no qualification or statement under Section 237 (2), (3) or
(4) of the Companies Act 2006.
The Half-Yearly Report has not been reviewed or audited by the Company's
Independent Auditor.
15. Approval
This Half-Yearly Report was approved by the Board on 27 November 2024.
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes International
Financial Reporting Standards and the Statement of Recommended Practice issued
by Association of Investment Companies. The Directors assess the Company's
performance against a range of criteria which are viewed as particularly
relevant for closed-end investment companies.
Adjusted net asset value per Ordinary share(A)
This performance measure is used to provide a like for like comparison with
the Company's Benchmark for the purposes of the potential five-yearly
performance-related conditional tender offer announced on 24 March 2022.
Further details may be found in the Chairman's Statement.
30 September 2024 31 March 2024
Net assets attributable (£'000) 489,081 427,054
Accumulated Indian CGT charge for the period since 31 March 2022 (£'000) 30,907 11,476
Net assets attributable excluding Indian CGT charge (£'000) 519,988 438,530
Number of Ordinary shares in issue 50,299,638 52,107,910
Adjusted net asset value per Ordinary share(A) 1,033.78p 841.58p
(A) Adjusted NAV is the Company's NAV after adding back all Indian capital
gains tax paid or accrued in respect of realised and unrealised gains made on
investments.
Discount to net asset value per Ordinary share
The discount is the amount by which the share price is lower than the net
asset value per share with debt at fair value, expressed as a percentage of
the net asset value.
30 September 2024 31 March 2024
NAV per Ordinary share a 972.34p 819.56p
Share price b 806.00p 652.00p
Discount (a-b)/a 17.1% 20.4%
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents
divided by shareholders' funds, expressed as a percentage. Under AIC reporting
guidance cash and cash equivalents includes amounts due to and from brokers at
the period end.
30 September 2024 31 March 2024
Borrowings (£'000) a 19,471 25,953
Cash (£'000) b 9,626 6,452
Amounts due to brokers (£'000) c 303 482
Amounts due from brokers (£'000) d - 2,328
Shareholders' funds (£'000) e 489,081 427,054
Net gearing (a-b+c-d)/e 2.1% 4.1%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of annualised investment management fees and
administrative expenses and expressed as a percentage of the average daily net
asset values with debt at fair value published throughout the year. The ratio
for 30 September 2024 is based on forecast ongoing charges for the year ending
31 March 2025.
30 September 2024 31 March 2024
Investment management fees (£'000) 3,522 2,964
Administrative expenses (£'000) 1,048 957
Less: non-recurring charges (£'000)(A) (22) -
Ongoing charges (£'000) 4,548 3,921
Average net assets (£'000) 484,176 391,393
Ongoing charges ratio 0.94% 1.00%
(A) Professional fees unlikely to recur.
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations which amongst other things,
includes the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended competitors, and the
Benchmark, respectively.
Share
Six months ended 30 September 2024 NAV Adjusted NAV Price
Opening at 1 April 2024 a 819.56p 841.58p 652.00p
Closing at 30 September 2024 b 972.34p 1,033.78p 806.00p
Price movements c=(b/a)-1 +18.6% +22.8% +23.6%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +18.6% +22.8% +23.6%
Share
Year ended 31 March 2024 NAV Adjusted NAV Price
Opening at 1 April 2023 a 641.32p 637.97p 512.00p
Closing at 31 March 2024 b 819.56p 841.58p 652.00p
Price movements c=(b/a)-1 27.8% 31.9% 27.3%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +27.8% +31.9% +27.3%
Share
Period from 1 April 2022 to 30 September 2024 NAV Adjusted NAV Price
Opening at 1 April 2022 a 697.30p 697.30p 562.00p
Closing at 30 September 2024 b 972.34p 1,033.78p 806.00p
Price movements c=(b/a)-1 +39.4% +48.3% 43.4%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +39.4% +48.3% +43.4%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at par value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
Stuart Reid
abrdn Holdings Limited
Secretaries
Email: cef.cosec@abrdn.com
27 November 2024
END
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