REG - India CapitalGrwthFd - Publication of Circular and Notice of EGM

India Capital Growth FundAnnouncement

20/02/2026 07:00

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RNS Number : 7454T  India Capital Growth Fund Limited  20 February 2026

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

20 February 2026

 

India Capital Growth Fund Limited

("ICGF" or the "Company")

LEI: 213800TPOS9AM7INH846

Publication of Circular

and

Notice of Extraordinary General Meeting

 

India Capital Growth Fund Limited has today published a circular (the
"Circular") proposing a five-yearly conditional performance-related tender
offer to replace the current Redemption Facility and a new dividend policy
(the "Proposals"). The Circular also contains a notice of Extraordinary
General Meeting ("EGM") which is to be held at 10:00 a.m. on 25 March 2026 at
1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL.

 

Summary of the Proposals

 

A summary of the Proposals is as follows:

 

·   the introduction of a new five-yearly conditional performance-related
tender offer for up to 25% of the Company's issued share capital (the
"Performance Related Tender"), which shall replace the existing biennial
redemption facility;

 

·   the introduction of a new dividend policy which shall seek to pay to
Shareholders an annual dividend ("Annual Dividend"), expected to initially
equate to approximately 2% of the Company's prevailing net asset value ("NAV")
with the intention of increasing over time if circumstances permit, to be paid
semi-annually (the "Annual Dividend Policy");

 

·     the introduction of a dividend re-investment scheme plan ("DRIP")
which will allow Shareholders to elect to have their dividends automatically
re-invested in shares in the Company through the secondary market; and

 

·     the adoption of MSCI India SMID (the "Benchmark") as the
appropriate benchmark for the Company from 1 January 2026.

 

The Company will continue with its existing share buyback policy through which
it actively makes market purchases of its own Shares where the Board considers
it appropriate to do so.

 

Benefits of the Proposals

 

The Directors believe that the Proposals will optimise returns for
Shareholders, broaden the Company's appeal and meet the interests of
Shareholders as a whole, through:

 

·     the Investment Manager being able to invest the Portfolio without
being constrained by the need to maintain sufficient liquidity to provide for
the next biennial redemption facility in 2027 and so to take full advantage of
the good prospects for the Indian market;

 

·     increasing the attraction of the Company to a wider pool of
investors, including those seeking a regular income;

 

·     the continuing prudent use of the Company's discount control
policy, seeking to manage any discount at which the Shares may trade compared
to NAV per Share; and on occasions when the Shares are trading at a premium to
NAV per Share, to issue Shares at a premium to NAV per Share after costs; and

 

·    enabling Shareholders to realise a proportion of their investment
for cash at close to NAV should the Company underperform the Benchmark over a
five-year period.

 

Together, the Performance Related Tender and the Annual Dividend reinforce the
Board's commitment to delivering Shareholder value.

 

 

Elisabeth Scott, Chair, commented "The Board regularly reviews the Company's
strategy and shareholder proposition. We believe the introduction of a
five‑year performance‑related tender offer, alongside an annual dividend
policy, represents a balanced and forward‑looking enhancement to the
Company's structure.

 

"These proposals are designed to align more closely with the long‑term
nature of our investment strategy, provide Shareholders with greater clarity
and optionality, and broaden the Company's appeal without compromising our
ability to capture the significant structural growth opportunities available
in Indian Small and Mid-Cap equities."

Gaurav Narain, Investment Adviser, commented "The proposed changes allow the
portfolio to be managed with greater conviction and flexibility over a longer
investment horizon. Indian Small and Mid‑Cap equities often require time for
fundamentals to compound and value to be realised, and a five‑year
assessment period is better aligned with this reality.

 

"Importantly, these enhancements remove unnecessary liquidity constraints
while preserving strong governance and accountability, enabling us to focus
fully on identifying high‑quality businesses capable of delivering
attractive long‑term returns for Shareholders."

 

A copy of the Circular will shortly be made available on the Company's website
at www.indiacapitalgrowth.com
(https://protect.checkpoint.com/v2/r02/___http:/www.indiacapitalgrowth.com___.YXAxZTpzaG9yZWNhcDpjOm86ZTU4N2I5ODc5NWEyZDFiMjMwMGIwMGQ1MzU2MTAwZjc6Nzo5ZDI1OjYwZGRlYzAyMTBmZWNkZGQ2ZTkwOWE4YjdkOGU0YjM5YzJhOGIxYjA2MWFlZjgyYTYzMjZmOTE0MmIwNGU0NGE6cDpUOk4)
and submitted to the National Storage Mechanism, where it will be available
for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://protect.checkpoint.com/v2/r02/___https:/data.fca.org.uk/%23/nsm/nationalstoragemechanism___.YXAxZTpzaG9yZWNhcDpjOm86ZTU4N2I5ODc5NWEyZDFiMjMwMGIwMGQ1MzU2MTAwZjc6NzowYzc3OmI1OWMzNDI4Y2NkNzVlZGNkZTI2OGIyZTFhMjdmOWYyOGNlNTAwMTM2MzU4YWFhN2I1Mjg4NzgzODdmNjI2YWE6cDpUOk4)
. A copy of the proxy voting form will also be made available on the Company's
website as detailed above.

 

Capitalised terms used and not otherwise defined herein shall have the same
meaning as in the Circular.

 

This announcement contains information that is inside information for the
purposes of the Market Abuse Regulation (EU) No 596/2014 as implemented in the
UK. The person responsible for arranging for the release of this announcement
on behalf of the Company is Apex Fund and Corporate Services (Guernsey)
Limited.

 

 

ENQUIRIES

 

 River Global, AIFM and Investment Manager                                +44 7702 799 117

Lucy Draper, Robin Sellers
 Neville Registrars Limited, Registrar and Receiving Agent                +44 121 585 1131
 Shore Capital, Financial Adviser and Broker                              +44 20 7408 4050

Gillian Martin, Daphne Zhang (Corporate Advisory)

Fiona Conroy (Corporate Broking)
 Apex Fund and Corporate Services (Guernsey) Limited (Company Secretary)  +44 20 3530 3687

Matt Lihou                                                              indiacapitalbox@apexgroup.com (mailto:indiacapitalbox@apexgroup.com)

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 small- and
mid-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
(https://protect.checkpoint.com/v2/r02/___http:/www.indiacapitalgrowth.com___.YXAxZTpzaG9yZWNhcDpjOm86ZTU4N2I5ODc5NWEyZDFiMjMwMGIwMGQ1MzU2MTAwZjc6Nzo5MTEyOmZhMTkxMjRkMjgxNTBmNjU3NDQyNzA5ODY0MTQ3OGViMDE4ODIzNjcyNWRmMWUyYWJiNjA2OGJkNGYyZmJhMDQ6cDpUOk4)

 

 

Additional Information

 

Part 1 - Letter from the Chair

 

1          INTRODUCTION

 

The Company's board of directors (the "Board") regularly reviews the Company's
strategy, performance and features, including its notional benchmark and its
offering to Shareholders. In so doing the Board has regard to trends in the UK
investment trust market, developments in the Indian market in which the
Company invests and the evolving make-up of its shareholder base.

 

As part of its review, the Board is now proposing a package of enhancements
designed to strengthen the Company's long‑term positioning and deliver
improved outcomes for Shareholders. These proposals reflect the Board's
proactive approach to ensuring the Company continues to evolve in line with
market best practice and Shareholder needs.

 

As a result of this, the Board is now recommending that certain strategic
changes be adopted which the Board believes are better suited to the Company
and in the interests of Shareholders, as follows:

 

·         the introduction of a new five yearly conditional
performance-related tender offer for up to 25% of the Company's issued share
capital (the "Performance Related Tender"), which shall replace the existing
biennial redemption facility;

 

·       the introduction of a new dividend policy which shall seek to
pay to Shareholders an annual dividend ("Annual Dividend"), expected to
initially equate to approximately 2% of the Company's prevailing net asset
value ("NAV") with the intention of increasing over time if circumstances
permit, to be paid semi-annually (the "Annual Dividend Policy");

 

·        the introduction of a dividend re-investment scheme plan
("DRIP") which will allow Shareholders to elect to have their dividends
automatically re-invested in shares in the Company through the secondary
market; and

 

·      the adoption of MSCI India SMID (the "Benchmark") as the
appropriate benchmark for the Company from 1st January 2026.

 

The Company will continue with its existing share buyback policy through which
it actively makes market purchases of its own Shares where the Board considers
it appropriate to do so.

 

The Directors believe that the Proposals will optimise returns for
Shareholders, broaden the Company's appeal and meet the interests of
Shareholders as a whole as a result of the following:

 

·        the Investment Manager will be able to invest the Portfolio
without being constrained by the need to maintain sufficient liquidity to
provide for the next biennial redemption facility in 2027 and so to take full
advantage of the good prospects for the Indian market;

 

·         increasing the attraction of the Company to a wider pool
of investors, including those seeking a regular income;

 

·         the continuing prudent use of the Company's discount
control policy, seeking to manage any discount at which the Shares may trade
compared to NAV per Share; and on occasions when the Shares are trading at a
premium to NAV per Share, to issue Shares at a premium to NAV per Share after
costs; and

 

·       enabling Shareholders to realise a proportion of their
investment for cash at close to NAV should the Company underperform the
Benchmark over a five-year period.

 

Together, the Performance Related Tender and the Annual Dividend reinforce the
Board's commitment to delivering Shareholder value.

 

The adoption of the Performance Related Tender requires amendments to the
Articles by the Special Resolution which will be proposed at the Extraordinary
General Meeting ("EGM") and will require the approval of Shareholders
representing at least 75% of the votes cast at the EGM.

 

Although not required by the Listing Rules, as a matter of good corporate
governance and best practice, the Board is also seeking Shareholder approval
for the proposed adoption of the Annual Dividend Policy. The Company's
investment policy, investment objective, and investment strategy will not
change as a result of the Annual Dividend Policy. Adoption of the Annual
Dividend Policy is included in the Special Resolution, which will require the
approval of Shareholders representing at least 75% of the votes cast at the
EGM.

 

2          Further details relating to the Proposals

 

Performance Related Tender

 

The proposed five yearly conditional performance-related tender offer for up
to 25% of the Company's issued share capital (excluding Shares held in
treasury) shall be measured by reference to the change in the Benchmark,
expressed as a percentage,  over the five year period commencing on 1 January
2026 with the first date that the tender offer could be offered would be
around the time of the Company's annual general meeting in 2031, when the
Company's audited NAV Total Return  per Share (before the impact of Indian
Capital Gains Taxation) over the five financial years ending 31 December 2030
would be available.

 

In the event that the change in Company's NAV Total Return per Share (before
the impact of Indian Capital Gains Taxation), expressed as a percentage, over
the previous five financial years is less than the change in the Benchmark,
expressed as a percentage, the Performance Related Tender will be triggered.
It is expected that the Performance Related Tender, if triggered, would be
offered to Shareholders at close to the prevailing NAV per Share less costs.

 

The Company's investment strategy requires a long-term, bottom-up investment
approach which is built on capturing the structural growth of high quality
Indian Small-Cap and Mid-Cap companies. Therefore, the Board believes that the
Performance Related Tender is better suited to the Company's strategy and its
long-term investment philosophy than the current Redemption Facility. The
Company's investments typically require several years to mature, and a
five-year holding period more realistically reflects the time needed for
company fundamentals to compound and valuation gaps to close. Moving from a
two-year redemption cycle to a five-year cycle therefore strengthens alignment
between the Company's investment horizon and its liquidity framework, enabling
the portfolio to be managed with greater conviction, lower trading friction,
and reduced pressure to maintain excess liquidity.

 

The introduction of the Performance Related Tender in place of the Redemption
Facility requires amendments to the Company's Articles. Accordingly, the
Special Resolution to be proposed at the EGM will remove the Redemption
Facility in its entirety by deleting Existing Article 132 (together with cross
references to Existing Article 132 and redemption rights) and inserting New
Article 132.  New Article 132 will require the Board, if and only if the
percentage change in the Company's NAV Total Return per Share over the
previous five financial years of the Company is less than the percentage
change in the Benchmark over that period, to propose a resolution at the
Company's annual general meeting in 2031 and every five years thereafter to
approve a tender offer for up to 25% of the Company's issued share capital
(excluding Shares held in treasury) at close to the prevailing NAV per Share
less costs.

 

Benchmark

 

In line with the Company's investment policy, strategy and objective, the
Company's investment portfolio naturally maintains a high allocation to
Small-Cap and Mid-Cap companies, reflected in its composition by market
capitalisation profile as at 30 January 2026: 2.3% Cash, 26.6% Mid-Cap, and
71.1% Small-Cap. The Board believes that the BSE Mid-Cap Index, previously
used as the Company's reference benchmark, while the best available index at
the time of its adoption, is insufficiently representative of the portfolio's
strategy and underlying exposures, since it includes no small-cap companies.

 

Accordingly, the Board believes it is now appropriate to adopt the MSCI India
SMID Index that better aligns with the portfolio's small and midcap
orientation and to use that index as a formal performance-measuring Benchmark.
The MSCI India SMID Index comprises 571 high quality constituents and provides
broader, more balanced exposure (including more than 80% of the underlying
companies in the Company's portfolio) and a more even market cap composition,
consisting of 7.3% Large-Cap, 48.2% Mid-Cap, and 44.5% Small-Cap as at 30
January 2026 and to use that Index as a formal performance-measuring
Benchmark.

 

MSCI indices are widely recognised globally and commonly used by investors
providing a comprehensive, transparent, rules-based methodology for index
construction, giving confidence in the selection, weighting, and rebalancing
processes.

 

The adoption of the MSCI India SMID as a formal benchmark for the Company's
NAV performance is effective from 1 January 2026, the beginning of the
Company's current Financial Year and is not conditional on the passing of the
Special Resolution at the EGM.

 

Annual Dividend and Dividend Reinvestment Plan

 

The Board proposes to change its current policy not to pay dividends to an
Annual Dividend Policy, whereby the Company would pay interim dividends per
Share commencing in October 2026 and then semi-annually from the 2026
Financial Year. Dividends will be paid out of capital and/or from any net
income after payment of operating expenses. The Board expects to pay an
interim dividend equating to approximately 2% of prevailing NAV per Share in
the current financial year ending 31 December 2026 with the intention of
increasing the dividend over time if circumstances permit. The two interim
dividends are expected to be declared, respectively in September and April.

 

If Shareholders pass the Special Resolution at the EGM, the initial dividend
payment will be declared on publication of the Company's Interim Results for
the six months ending 30 June 2026 and will be payable in October 2026. At the
same time, the Company will introduce a DRIP scheme which will allow
Shareholders to elect to have their dividends automatically re-invested in
shares in the Company through the secondary market. Further details of the
DRIP scheme will be provided to Shareholders in due course.

 

If the Special Resolution is not passed, there will be no change to the
Company's current dividend policy, which is not to pay dividends.

 

3          CONSEQUENCES IF THE PROPOSALS ARE NOT APPROVED

 

If the Proposals are not approved, the existing Redemption Facility will
remain in place, and no dividends will be paid.  The Redemption Facility has
an adverse impact on the ability of the Board and the Investment Manager to
grow the Company and thus to bring down costs for all Shareholders.

 

In any event, given the volatile market, currency environment and the current
geo-political uncertainties, the Board considers that the realisation or
rebalancing of the Company's portfolio of investments ahead of the 2027
Redemption Facility is likely to result in sub-optimal returns for
Shareholders and is not in the best interests of the Company or of
Shareholders as a whole.

 

The adoption of the MSCI India SMID as the formal Benchmark of the Company's
performance is already in effect and is not dependent on approval of the
Proposals.

 

4           EXTRAORDINARY GENERAL MEETING

 

The Proposals require approval of the Shareholders by the passing of the
Special Resolution. A notice convening the EGM to be held at 10 a.m. on 25
March 2026 is set out at the end of this document.

 

At the EGM, the Special Resolution will be proposed to approve (i) the
adoption of the Annual Dividend Policy; and (ii) the deletion of Existing
Article 132 and related references to the Redemption Facility and to insert
New Article 132 (and related definitions) requiring the Board, if the five
year performance related condition is satisfied, to propose at the relevant
annual general meeting a resolution to approve a tender offer for up to 25% of
the then issued share capital at close to the prevailing NAV per Share less
costs.

 

At the EGM, every member present in person or (being a corporation) by
representative or by proxy shall, on a show of hands, have one vote and, on a
poll, shall have one vote for every Share held by him. The quorum requirement
for the EGM is not less than two Shareholders entitled to be present by person
or by proxy (or, if by a corporation, by a representative). The Special
Resolution requires the approval of Shareholders representing at least 75% of
the votes cast at the EGM.

 

5           ACTION TO BE TAKEN

 

You will find enclosed with this document the Form of Proxy for use by
Shareholders in relation to the EGM. You are requested to complete this form
in accordance with the instructions printed on it as soon as possible.

 

To be valid, completed Forms of Proxy must be received by the Receiving Agent
at Neville Registrars Limited, Neville House, Steelpark Road, West Midlands
B62 8HD not later than 10:00 a.m. on 23 March 2026 or, if the meeting is
adjourned, no later than 48 hours before the time for holding the adjourned
meeting.

 

As an alternative to completing your hard-copy proxy form, you can appoint a
proxy electronically at www.Sharegateway.co.uk
(https://protect.checkpoint.com/v2/r02/___http:/www.sharegateway.co.uk/___.YXAxZTpzaG9yZWNhcDpjOm86OTI3YWVmNGMzMGUyY2YzNmI0OWFkYjhkMzBjNTMwN2Y6NzphYjY4OjQ5ZjY4NDJhZGY0YzliYmJhMjM4MmY2NjE5MTE1NTUyMGJlOWM4OTY3NWM4ODhmZjdjNGIxNThiMzY3Y2M3YmQ6cDpUOk4)
using the Shareholder's personal proxy registration code as shown on the Form
of Proxy. For an electronic proxy appointment to be valid, your appointment
must be received by no later than 10:00 a.m. on 23 March 2026.

 

If you hold Ordinary Shares in CREST you should appoint a proxy by completing
and transmitting a CREST Proxy Instruction to Neville Registrars Limited
(CREST Participant ID: 7RA11) so it is received by CREST no later than 10:00
a.m. on 23 March 2026 or, if the meeting is adjourned, no later than 48 hours
before the time for holding the adjourned meeting.

 

Shareholders should be aware that the deadlines for voting through platforms
may be earlier than the Company's proxy deadline. Appendix 1 to this document
gives further details on how to ensure you can vote and Appendix 2 to this
document gives further details on how to complete the Form of Proxy.

 

In line with corporate governance best practice, and in order that any proxy
votes of those Shareholders who are not allowed to attend and to vote in
person are fully reflected in the voting on the Special Resolution, the Chair
of the meeting will direct that voting on the Special resolution will take
place by way of a poll. The final poll vote on the Special Resolution will be
published immediately after the EGM on the Company's website
www.indiacapitalgrowth.com
(https://protect.checkpoint.com/v2/r02/___http:/www.indiacapitalgrowth.com/___.YXAxZTpzaG9yZWNhcDpjOm86OTI3YWVmNGMzMGUyY2YzNmI0OWFkYjhkMzBjNTMwN2Y6NzoyNjFjOjdlMDZlNzIwOTQ0YzM4OWIzOTEyOTllNzJmYzdjNjU4ZTdkYzBlMTUxYzJlYmQxZDk0OTQyYmFkOTU1ZTAxZjE6cDpUOk4)
.
(https://protect.checkpoint.com/v2/r02/___http:/www.indiacapitalgrowth.com/___.YXAxZTpzaG9yZWNhcDpjOm86OTI3YWVmNGMzMGUyY2YzNmI0OWFkYjhkMzBjNTMwN2Y6NzoyNjFjOjdlMDZlNzIwOTQ0YzM4OWIzOTEyOTllNzJmYzdjNjU4ZTdkYzBlMTUxYzJlYmQxZDk0OTQyYmFkOTU1ZTAxZjE6cDpUOk4)

 

If you have any questions relating to this document or the completion and
return of the Form of Proxy or CREST Proxy Instruction, please call Neville
Registrars Limited on telephone number 0121 585 1131 or, if telephoning from
outside the United Kingdom, on +44 121 585 1131. Please note that no advice on
the contents of this document nor on the matters to be voted upon at the EGM
nor any financial, legal or tax advice can be given by Neville Registrars
Limited and accordingly for such advice you should consult your stockbroker,
solicitor, accountant, bank manager or other independent professional adviser.

 

6           RECOMMENDATION

 

The Directors consider that the Proposals and the Special Resolution to be
proposed at the EGM are in the best interests of the Company and Shareholders
as a whole.

 

The Directors unanimously recommend that Shareholders vote in favour of the Special Resolution at the EGM as the Directors intend to do in respect of their own beneficial and non-beneficial holdings of Shares, amounting in aggregate to 157,700 Shares, representing approximately 0.24% of the issued share capital of the Company (excluding Shares held in treasury) as at the Latest Practicable Date.

 

 

Yours faithfully

Elisabeth Scott

Chair

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