REG - JPMorgan Indian Inv - Half-year Report
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RNS Number : 4598N JPMorgan Indian Invest Trust PLC 19 June 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN INDIAN INVESTMENT TRUST PLC
HALF YEAR REPORT & FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31st MARCH 2025
Legal Entity Identifier: 549300OHW8R1C2WBYK02
Information disclosed in accordance with the DTR 4.1.3
Highlights
· For the six months ended 31st March 2025, NAV total return of -7.2%
compared with -10.6% for the MSCI India Index (in Sterling terms) (the
'Benchmark'). Share price return of -4.8%.
· The key drivers of relative performance were:
1) The market decline during the six months to end March 2025 meant that CGT
write backs supported performance over the review period.
2) Strong earnings were delivered in three out-of-index positions -
Coforge/Exls/Make My Trip.
3) Long-standing overweight in two banks, Kotak and ICICI, due to a more
favourable outlook on rates and liquidity condition, and the structural
underweight to Reliance Industries, an oil and gas refiner.
· The discount to NAV narrowed from 17.8% at the previous year end to
15.6% at the half year end. As at 17th June 2025 the discount was 7.7%.
· The Company repurchased 3,136,391 shares into Treasury during the
six-month reporting period, equating to 3% of the Company's share capital.
Since the half year end, a further 133,228 shares have been bought back for
holding in Treasury.
The Chairman of JII, Jeremy Whitley, commented:
"Whilst the Company outperformed the benchmark, thanks to positive stock
selection and the favourable effect of capital gains tax credits arising from
the market decline, the outright fall in returns is nonetheless disappointing.
However, as we have previously noted, we believe that it is more meaningful to
assess performance over the longer term"
"It remains the Board's view that the investment case for Indian equities is
very strong. The pace of growth may be easing at present, but India's very
positive long-term growth trajectory remains in place, supported by several
major structural changes such as increased infrastructure investment,
digitalisation and the growth of the middle classes."
"Together with the Company's advisers and managers, and with engagement with
shareholders, on 19th May 2025 we announced a suite of proposals that we
believe should enhance the attractiveness of the Company to both existing and
potential shareholders and which are intended to narrow the discount to a
consistently lower level."*
*Details outlined in Chairman's statement (below), subject to shareholder
approval at the General Meeting on 8th July 2025.
Portfolio Managers, Amit Mehta and Sandip Patodia, commented:
"The decline in Indian equity market, combined with the growth slowdown, meant
that the six months to end March 2025 was a challenging time for investors."
"The Indian equity markets experienced a significant and broad-based
correction, triggered by a cyclical yet shallow slowdown in economic activity,
moderation in government-led capital expenditure, weaker than expected
corporate earnings and ongoing slowdown in mass consumption."
"Looking ahead, it is important to stress that the current weakness in Indian
equities, and any potential further near-term sell-off, do not alter the
long-term structural opportunities offered by this market.."
CHAIRMAN'S STATEMENT
Performance
In the six months ending 31st March 2025, the Company's return on net assets
was -7.2% in sterling terms. Its share price return declined by 4.8%. This
compares with a return of -10.6% for the Company's benchmark, the MSCI India
Index.
Whilst the Company outperformed the benchmark, thanks to positive stock
selection and the favourable effect of capital gains tax credits arising from
the market decline, the outright fall in returns is nonetheless disappointing.
However, as we have previously noted, we believe that it is more meaningful to
assess performance over the longer term, as the Portfolio Managers make their
investment decisions with a view to maintaining positions for five or more
years. On this basis, the portfolio made an annualised return of 16.3% in NAV
terms over the five years to end March 2025, and averaged a return of 6.2% per
annum on the same basis over the corresponding ten-year period. Even so, this
performance lagged the benchmark's annualised returns of 19.6% and 9.4%
respectively, in large part because the benchmark does not include the adverse
effects of capital gains tax during periods of market strength.
In their report on pages 14 to 18 of the Half Year Report, the Portfolio
Managers provide a detailed commentary on performance over the six-month
review period. They also discuss portfolio activity and their outlook for the
Indian market over the remainder of this year and beyond.
Discount and Share Repurchases
At the AGM held in February 2025, shareholders gave approval for the Company
to renew the Directors' authority to repurchase up to 14.99% of the Company's
shares for cancellation or transfer into Treasury.
The discount at which the Company's shares traded relative to its NAV
narrowed from 17.8% at the previous financial year end, to 15.6% at the half
year end. Consistent with the Company's share buyback policy, the Board
constantly weighs the merits of buying back shares to manage the absolute
level and volatility of the discount. The Company repurchased 3,136,391 shares
into Treasury during the six-month reporting period, equating to 3% of the
Company's share capital. Since the half year end, a further 133,228 shares
have been bought back for holding in Treasury.
Result of detailed review of Company's future strategy and options
The wide discount noted above has remained a constant source of concern for
the Board, as it has for a number of other Investment Companies. The Board has
therefore been actively considering reasons for the continuing discount and
options for tackling the issue. Together with the Company's advisers and
managers, and with engagement with shareholders, on 19th May 2025 we
announced a suite of proposals that we believe should enhance the
attractiveness of the Company to both existing and potential shareholders and
which are intended to narrow the discount to a consistently lower level. The
Board concluded that the Manager's strategy and investment process of
investing in quality and growth companies trading at valuations offering
reasonable returns over the medium to long term would reward patient investors
over a normal market cycle. Furthermore, the Board was reassured by the
Investment Manager's commitment to invest in their Indian equity strategy by
hiring an additional research resource to take advantage of India's expanding
investable universe.
Specific amendments are being proposed in terms of additional discount control
mechanisms. The Board proposes to adopt the following discount control
mechanisms:
• A tender offer for up to 30% of the Company's outstanding share
capital (excluding shares held in treasury) providing a cash exit at the
tender price (the 'First Tender Offer'). The terms of the tender and details
of the calculation of the tender price can be found in the circular on the
Company's website: http://www.jpmindian.co.uk. The First Tender Offer is
subject, amongst other things, to shareholders' approval. If shareholder
approval is obtained, the Company's existing performance-related conditional
tender offer will be removed.
• Introduce a commitment to target a single digit discount through
active market buybacks, utilising the 14.99% buyback authority approved by
shareholders at the AGM in February 2025.
• Introduce a triennial tender offer for 100% of the Company's
outstanding share capital at a 3% discount to the prevailing NAV (the
'Triennial Tender Offers'). The Board anticipates the first of the Triennial
Tender Offers to be launched in Q2 2028. It is clear from consultation with
shareholders that size and scale of the Company are imperative for their
ongoing engagement. The Board therefore reserves the right to withdraw the
Triennial Tender Offer if the applications to tender are of a level that the
Company would shrink below an NAV of £150 million. In this instance the
Board would anticipate putting resolutions to shareholders to wind up the
Company. In addition, the Board notes that the next continuation vote will be
put to shareholders at the Company's AGM to be held in 2029.
Furthermore, the Board proposes to pay dividends each financial year totalling
at least 4% of the NAV of the Company at the end of the preceding financial
year. Dividends will be paid by way of four equal interim dividends in
December, March, June and September each year. The Board believes that the
introduction of an enhanced dividend distribution policy, which will be
financed through a combination of any available net income in each financial
year and other reserves, utilises the investment structure and will
differentiate the Company from its peers, noting that the Company would be the
only Indian Investment Company paying a dividend at this time. The Board is
hopeful that the introduction of the dividend will appeal to a wider investor
audience and is cognisant of the success other JPMF managed investment trusts
have had in attracting additional investor demand for their shares having
adopted such an enhanced dividend distribution policy.
In addition to the initiatives outlined above, the Board is pleased to
announce that the Company's investment management fee arrangements with JPMF
will change. With effect from 1st October 2025 the annual investment fee will
be calculated as 0.65% on the first £300 million of the lower of the
Company's market capitalisation or net assets and 0.55% in excess of £300
million, instead of 0.75% on the first £300 million and 0.60% in excess of
£300 million.
A General Meeting will be convened on 8th July 2025 at 11.00 a.m. at 60
Victoria Embankment, London, EC4Y 0JP, at which all shareholders will be able
to vote on the resolutions proposed respectively: to authorise the Company to
make market purchases of the exit shares pursuant to the First Tender Offer,
to adopt the enhanced dividend distribution policy and to approve certain
amendments to the Company's existing Articles required in connection with the
enhanced dividend distribution policy. More details, including the notice of
the General Meeting, can be found in the circular on the Company's website.
Shareholders should note that the proposed discount control mechanisms set out
above and the enhanced dividend distribution policy will not be implemented
unless all the Resolutions are passed at the General Meeting.
The Board
Charlotta Ginman became the Chair of the Audit and Risk Committee at the
conclusion of the Company's 2025 AGM, following the retirement of Jasper Judd.
I would like to take this opportunity on behalf of the Board to thank Jasper
once again for his dedication and consistently insightful and constructive
input.
Stay Informed
The Company delivers email updates containing regular news and views, as well
as the latest performance. If you have not already signed up to receive these
communications and you wish to do so, you can opt in via
www.tinyurl.com/JII-Sign-Up, or by scanning the QR code in the Half Year
Report. Shareholders are also encouraged to visit the Company's website at
www.jpmindian.co.uk, which contains detailed information on the Company's
performance, and monthly commentaries, as well as interviews and recordings
with the Portfolio Managers.
Outlook
The new US administration's approach to trade policy and international
relations more generally is clearly a source of exasperation and some despair
for investors everywhere. But India should be able to weather the effects of a
global trade war, should one eventuate, better than most other major
economies. India's export dependency is relatively low, while corporate
balance sheets are in good shape and the Reserve Bank of India has adopted a
more supportive monetary stance in response to the current growth slowdown.
And taking a longer view, it remains the Board's view that the investment case
for Indian equities is very strong. The pace of growth may be easing at
present, but India's very positive long-term growth trajectory remains in
place, supported by several major structural changes such as increased
infrastructure investment, digitalisation and the growth of the middle
classes. Among the major economies, only China can hope to achieve comparable
rates of growth over the next decade. This positive outlook will generate many
exciting opportunities for patient, long-term investors such as your Company
to invest in quality companies, with superior growth prospects, at the right
price.
My fellow board members and I are confident that this approach will continue
to provide shareholders with consistent, attractive returns as India realises
its substantial long-term potential.
If the anticipated returns do not meet the Board's expectations, we believe
the proposals outlined in the previous section, especially the Triennial
Tender Offer for 100% of the company's outstanding share capital at a 3%
discount to the prevailing NAV, will provide shareholders with the choice to
either continue their investment or opt to cash out. Should shareholders
choose to cash out, they will have the flexibility to do so at a time and in a
manner that suits them, rather than being subject to unpredictable market
conditions.
We thank you for your ongoing support.
Jeremy Whitley
Chairman
18th June 2025
INVESTMENT MANAGER'S REPORT
Market Review
During the six months ending 31st March 2025, the MSCI India Index declined by
10.6%, compared to the MSCI Emerging Markets Index, which declined by 1.5%,
the MSCI China Index, which rose by 10.4%, and the S&P 500, which rose by
1.8%. The MSCI India small cap index fell 15.5% during the same period.
In summary, the Indian equity markets experienced a significant and
broad-based correction, triggered by a cyclical yet shallow slowdown in
economic activity, moderation in government-led capital expenditure, weaker
than expected corporate earnings and ongoing slowdown in mass consumption. The
market reaction was exacerbated, and rightly so, given rich valuations across
most sectors except perhaps financials.
The Reserve Bank of India (RBI) had been managing a tightrope with stubbornly
high inflation and slowing economic activity. Given inflation remained above
the RBI band they had rightly stuck to a tighter monetary stance. However,
with inflation largely now coming under control and declining oil prices, we
have seen the RBI quickly pivot to a monetary easing stance by cutting
interest rates and injecting liquidity into the banking system to support
growth. It appears that the government wants to ensure that GDP growth for the
full year does not fall below 6.5% and has sufficient monetary and fiscal
ammunition in reserve to effect it.
Further, it is notable that the market reaction to threats of higher US
tariffs has so far been muted because India is relatively more immune to
higher tariffs by the US given: (1) its lack of dependence on exports,
particularly to the US (export of goods to the US as a percentage of GDP stood
at approximately 2% for CY2024); (2) the government aggressively pursuing a
trade deal with the US; and (3) any potential impact being cushioned by a
precipitous fall in the oil price. In summary, despite valuations looking
elevated, the Indian stock market has been relatively supported by monetary
easing and international flows into the equity market.
Economic Activity
The slowdown in economic activity during the six months ended on 31st March
was due to a combination of factors:
- Government capex slowed: Last year's general election, which concluded
in June 2024, led to significant delays in government spending, particularly
on infrastructure. Further, having doubled government capex as a percentage of
GDP from around 1.5% of GDP pre-Covid to current levels of around 3% of GDP,
the government now plans to grow it in-line with nominal GDP. This means that
it is unlikely to be an incremental driver of growth going forward.
- A broad-based upsurge in private capex is yet to materialise: The
government has done the heavy lifting on boosting the economy via capex
spending in recent years, and public investment in energy infrastructure looks
set to continue. The government now expects the private sector to step up its
capital spending more generally; however, this has not happened yet except in
select sectors like power, electronics, and real estate.
- Consumption remains weak: Given the excess labour supply (mainly blue
collar) post-Covid, persistently high inflation (until easing recently) and
weakness in the IT services sector (which employs the largest pool of
white-collar workers in the country), urban consumption has remained weak
particularly among middle- and lower-income households. This has impacted
corporate earnings in the consumer sector.
- Restrictive monetary policy: The RBI's ability to support activity by
cutting interest rates was limited by high inflation, as discussed above,
especially in essential goods. The RBI also tightened controls on unsecured
consumer loans to prevent any credit bubble, adding an additional constraint
on consumer spending and home sales.
However, as we look forward (and more below), we view some of these headwinds
to be largely behind us. Inflation has eased notably since the beginning of
2025, as unfavourable base effects have dissipated, and this has created space
for the RBI to shift to a more accommodative monetary policy stance to support
activity. It is useful to consider this policy flexibility in the context of
alternative investment destinations. Encouragingly, we do not see a challenge
to the ability of the Indian economy to deliver double digit nominal economic
growth on a consistent basis, which is moving it swiftly up the global ranking
in terms of size. While corporate earnings growth is likely to be slower than
previously expected, we still expect earnings growth for the next fiscal year
to be around high single digits/double digits, again likely higher than that
of any other large economy. In our view, the Indian economy had grown a little
above its natural trend rate driven by government spending. As this slows, we
now expect the economy to go back to its natural rate of growth, which is far
from a disaster.
Performance Review
The decline in Indian equity market, combined with the growth slowdown, meant
that the six months to end March 2025 was a challenging time for investors.
Your Company experienced a 7.2% decline in its net asset value (NAV), which
includes the impact of capital gains tax. We have previously spoken and
written at length about the issues arising because the Benchmark does not
account for capital gains tax (CGT). This means that when the market rises,
depending on the holding period, there is a very significant adverse impact
on the Company's net asset value performance, relative to the Benchmark. This
performance, while better than the market/benchmark decline of 10.6% over the
period, is nonetheless disappointing.
The Company's share price fell by 4.8%, resulting in a further narrowing of
the share price discount to NAV from 17.8% to 15.6% over the six month period.
The key drivers of relative performance were:
1) The market decline during the six months to end March 2025 meant that CGT
write backs supported performance over the review period.
2) Strong earnings were delivered in three out-of-index positions -
Coforge/Exls/Make My Trip.
3) Our long-standing overweights in two banks, Kotak and ICICI, due to a
more favourable outlook on rates and liquidity condition and our structural
underweight to Reliance Industries, an oil and gas refiner.
In terms of detractors, several of our auto sector holdings, including
overweights to Bajaj Auto and Tata Motors, dragged down relative performance,
due to weaker demand within the sector and vulnerability to US tariffs. Our
underweight in Bharti Airtel also hurt returns over the period. Style factors
also detracted, as cyclical and value stocks performed best, while the quality
growth stocks we favour underperformed.
Select Portfolio Activity
Before we delve into the portfolio changes made over the past six months, a
reminder about our investment strategy: we aim to invest in great businesses
with strong governance standards at attractive valuations. We think about our
investments in that order, by first answering the question whether it is a
good business and only then looking at valuation. The material falls in many
stocks over the past six months have created some very interesting investment
opportunities, as many quality growth stocks which we previously viewed as
over-priced are now starting to trade at more acceptable valuations, and we
have sought to take advantage of this situation.
New Initiations
Select portfolio acquisitions we made during the review period include:
Hexaware Technologies - IPO
Hexaware is a mid-cap IT Services company with 1.4 billion USD revenues. We
are impressed with CEO Keech's success in turning this business around over
the past decade, with the support of an experienced, stable management team.
The company now benefits from competitive advantages stemming from its client
centric culture, a differentiated suite of in-house AI-enabled platform
offerings such as RapidX, Tensai and Amaze, and a disciplined and prudent
approach to capital allocation. As a result, the company has delivered
consistent growth over the last ten years and is steadily increasing its
market share. The company was available at reasonable valuations, and we
decided to participate in the IPO given the underlying quality of the
business, strength of the management team and prospects of the business (with
a growth target of 3 billion USD by 2030).
Max Health
Max Health is India's second largest private hospital chain, with operations
and profitability superior to the rest of the industry. The business has
inherent structural advantages including a skew towards complex procedures and
a strong presence in the largest markets in Delhi and Mumbai. A significant
part of Max's success is attributed to CEO Abhay Soi, a 'hospital
restructuring specialist' with a private equity background. He is overseeing a
multi-year expansion plan, and the investment case depends on how well the
company manages to balance growth and profitability as it scales up. We have
initiated a position as the outlook is supported by earnings growth of 20%,
assuming a successful expansion program. While headline valuation multiples
look high, we believe if the company can execute on its growth potential it
will grow into these multiples.
Vishal Megamart - IPO
Vishal is the largest value retailer in India (ex DMART) serving aspirations
of a large middle and lower-income section of the Indian population (c.225
million households; 67% of total households) with 696 stores and 12 million sq
ft retail area across 450+ cities. The company has been a remarkable
turnaround story, where erstwhile PE owners, TPG Capital along with CEO
Gunender Kapoor ('GK') bought the brand 'Vishal' with 150+ department stores
from bankruptcy in 2010-11 and approached value retailing with an
apparel-first approach including a wide assortment mix of general
merchandise/FMCG (fast moving consumer goods) and envisioned the store
retailing economics from first principles. Today, the company generates
1.2 billion USD in sales with strong core return ratios of 60% +(post-tax
ROIC), a near 100% post-tax operating ROCE with a cashflow conversion of 80%.
Given the attractive economics and long duration opportunities and a positive
view on the management team, we initiated a position in the IPO.
ICICI Lombard
ICICI Lombard is India's second largest general insurer and the largest in the
private sector, a title it has held since 2003. It is a multi-line insurer and
a leader in commercial and group health segments. Its economics are excellent,
with superior underwriting and ROE versus most of the industry. The management
team is highly experienced and prioritises profitability over aggressive
growth. The Indian market offers material growth potential for non-life
insurance, from which ICICI Lombard will benefit.
Max Financial
Max Financial is a good quality life insurance business with strong growth
potential, reasonable returns, and a strong management team. In addition, the
stock was available at a discounted valuation compared to peers within the
sector due to longstanding uncertainty over the company's relationship with
its owner Axis Bank. However, we expect these concerns to dissipate soon as
Max Financial's collaboration with Axis Bank deepens, in a similar manner to
the HDFC Bank/HDFC Life relationship. This could potentially trigger a
narrowing of Max Financial's valuation discount.
Complete Sales
These acquisitions, and some top-ups to existing holdings where valuations
merited, were funded by several disposals and trims to positions which had
disappointed expectations.
Disposals included:
Embassy REIT
Embassy is Asia's largest investor in office space. We exited this position
due to corporate governance issues arising from the CEO's departure.
Endurance
This disposal was motivated by the fact that we already have a large exposure
to Bajaj Auto, and a lot of Endurance's business is connected to Bajaj. We
also wanted to manage our overall exposure in the auto sector.
Bajaj Housing Finance
Having initiated a position in a quality housing finance company at its IPO,
we exited our position following strong stock price performance and less
upside to intrinsic value.
Outlook
Given heightened volatility as we write we are reminded of that famous Buffett
saying that it's wise for investors "to be fearful when others are greedy and
to be greedy only when others are fearful."
Through last year, we were worried and cautious about certain parts of the
Indian equity universe, particularly, small and mid-cap companies and highly
valued growth businesses. We were less, if at all, concerned about the quality
of the underlying franchises but we questioned how we would make attractive
returns in a lot of these businesses given starting valuations and the
distance we perceived they were from their underlying intrinsic value. The
last six months have certainly started to show some restoration of value in
both these segments, which makes us more interested.
We are cautious about the outlook for the Indian economy over the remainder of
2025, but we want to stress that we do not see reason to be concerned about
the risk of even a mild recession. In the last couple of years, the Indian
economy has been growing above its normal trend rate, thanks in part to
tailwinds provided by the strong performance of capital markets. In our view,
the current economic slowdown reflects the economy's inevitable convergence
back to trend, which is likely to take more time to run its course.
The global macroeconomic backdrop is unlikely to be supportive as this process
plays out. We are more concerned than most Indian investors about the
potential economic and market risks associated with the new US
administration's aggressive and unpredictable tariff policy. Even if US
threats against its trading partners do not fully materialise, tariffs at any
level are inflationary and the uncertainty generated by the US
administration's on-off approach to trade negotiations will likely dampen
consumer and investor confidence in many markets, to the point that a global
slowdown appears inevitable.
However, it is important to bear in mind that the Indian economy is
well-positioned to cope with such challenges. It is one of the world's most
stable and resilient economies, with less exposure to a global economic
slowdown. This is evidenced by the fact that since 1980, India has largely
avoided full-blown recessions (except during the pandemic). The country has a
low level of export dependence - exports account for only 11% of GDP, one of
the lowest dependency levels among its emerging market peers, while its
domestic consumption accounts for approximately 60% of GDP, vs only c 40% in
China. In addition, corporate and bank balance sheets are healthy, banks'
non-performing assets are at a record low of less than 3%, and the RBI is
becoming more supportive as growth slows, inflation eases and geopolitical
uncertainties escalate. India's rural economy is also relatively insulated
from global cycles and will provide a further safety buffer against a
worldwide downturn.
Although any further slowdown in activity is likely to be relatively shallow,
it will nonetheless impact margins and earnings as demand weakens, and
businesses are forced to absorb at least some of the costs associated with
higher tariffs. This suggests that although Indian equity valuations have
already fallen significantly - they are currently around 20% below their end
of September 2024 peaks - there is scope for some further de-rating across the
market cap spectrum as markets factor in a deterioration in the earnings
outlook, and multiples revert to their long-term averages. Yet there are
positives associated with this somewhat gloomy market prognosis. As ever, and
as we have already seen over the review period, near-term disruption
inevitably generates interesting investment opportunities at more attractive
prices.
In terms of specific sectors, we are seeing potentially interesting
opportunities among industrial names. These are companies which had benefitted
from the first stage of government investment; investor extrapolation on
expectations of rates of growth that meant valuations got so far away from
intrinsic value creation that we could not see how it was possible to make
money from these businesses. In this area, a lot of the valuation froth and
earnings outlook has become much more rationale. We are also seeing an
opportunity to broaden our exposure to discretionary spending stocks. While
consumer demand from middle- and lower-income households has been weak, higher
income households have benefitted from wealth effects, and they remain
discerning and willing to pay for convenience. We expect this to continue
driving demand in several sectors, notably travel (to the benefit of companies
such MakeMyTrip), premium vehicles such as SUVs (M&M), and quick commerce
(Zomato), as well as real estate and related household goods. In addition to
this, the government has become a lot more focused on boosting consumption
for the middle-income segment which we saw in tax cuts in the last budget,
with the aim a of more balanced approach between consumption and capex.
Looking further ahead, it is important to stress that the current weakness in
Indian equities, and any potential further near-term sell-off, do not alter
the long-term structural opportunities offered by this market. The investment
case for India remains compelling as the country's long term growth prospects
will continue to be amongst the strongest in the world, thanks to the rapid
growth of its middle classes. This growth will continue to be supported by
major structural reforms, including the government's ongoing commitment to
infrastructure development.
Given the market's very favourable long-term prospects, combined with the
emergence of more appealing near-term opportunities, we intend to continue
with our strategy of seeking out high quality companies, at attractive prices,
with the intention of investing patiently, over a long-time horizon. In our
view, this will continue to provide shareholders with exposure to the best
ideas in this vibrant and exciting market and deliver substantial positive
returns over the medium to long term.
We would like to thank shareholders for their continued support.
For and on behalf of
JPMorgan Asset Management
Investment Manager
Amit Mehta
Sandip Patodia
Portfolio Managers
18th June 2025
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its Half Year
Report.
Principal and Emerging Risks and Uncertainties
The principal and emerging risks facing the Company are substantially
unchanged since the date of the Annual Report for the financial period ended
30th September 2024 and continue to be as set out in that report on pages 32
to 36. Risks faced by the Company include, but are not limited to, poor and
ineffective execution of strategy, breach of legal and regulatory rules, share
discount, cybercrime, broadscale external factors, taxation, market and
geopolitical tensions, monetary and climate change.
Related Parties Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company during the period.
Going Concern
The Directors believe, having considered the Company's investment objective,
risk management policies, capital management policies and procedures, nature
of the portfolio and expenditure projections, that the Company has adequate
resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future and more specifically, that there are no material uncertainties
pertaining to the Company that would prevent its ability to continue in such
operational existence for at least 12 months from the date of the approval of
this half yearly financial report. For these reasons, they consider there is
reasonable evidence to continue to adopt the going concern basis in preparing
the accounts.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with UK-Adopted International
Accounting Standards 34 'Interim Financial Reporting' and gives a true and
fair view of the state of affairs of the Company and of the assets,
liabilities, financial position and net return of the Company, as at
31st March 2025, as required by the UK Listing Authority Disclosure and
Transparency Rules 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure and Transparency Rules.
In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether applicable UK-adopted international accounting standards
have been followed, subject to any material departures disclosed and explained
in the financial statements; and
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business;
and the Directors confirm that they have done so.
For and on behalf of the Board
Jeremy Whitley
Chairman
18th June 2025
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2025 31st March 2024 30th September 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments
held at fair value through
profit or loss - (80,507) (80,507) - 54,565 54,565 - 161,223 161,223
Net foreign currency
(losses)/gains - (145) (145) - 45 45 - (528) (528)
Income from investments 2,799 - 2,799 2,826 - 2,826 8,756 - 8,756
Interest receivable and similar
income 52 - 52 524 - 524 1,179 - 1,179
Total income/(loss) 2,851 (80,652) (77,801) 3,350 54,610 57,960 9,935 160,695 170,630
Management fee (2,261) - (2,261) (2,593) - (2,593) (5,321) - (5,321)
Other administrative expenses (648) - (648) (616) - (616) (1,225) - (1,225)
(Loss)/profit before finance
costs and taxation (58) (80,652) (80,710) 141 54,610 54,751 3,389 160,695 164,084
Finance costs (16) - (16) - - - - - -
(Loss)/profit before taxation (74) (80,652) (80,726) 141 54,610 54,751 3,389 160,695 164,084
Taxation (270) 13,973 13,703 (332) (11,083) (11,415) (1,006) (35,793) (36,799)
Net (loss)/profit (344) (66,679) (67,023) (191) 43,527 43,336 2,383 124,902 127,285
(Loss)/earnings per share (note 4) (0.51)p (99.22)p (99.73)p (0.26)p 60.16p 59.90p 3.35p 175.39p 178.74p
The Company does not have any income or expense that is not included in the
net (loss)/profit for the period. Accordingly the 'Net (loss)/profit for the
period', is also the 'Total comprehensive income' for the period, as defined
in IAS1 (revised).
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
The 'Total' column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance
with IFRS.
The supplementary 'Revenue' and 'Capital' columns are prepared under guidance
published by the Association of Investment Companies.
All the (loss)/profit and total comprehensive income is attributable to the
equity shareholders of JPMorgan Indian Investment Trust plc, the Company.
There are no minority interests.
Condensed Statement of Changes in Equity
Called up Exercised Capital
share Share warrant redemption Capital Revenue
capital premium reserve reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 31st March 2025 (Unaudited)
At 30th September 2024 24,868 97,316 5,886 12,898 732,306 (12,387) 860,887
Repurchase of shares into Treasury - - - - (31,714) - (31,714)
Loss for the period - - - - (66,679) (344) (67,023)
At 31st March 2025 24,868 97,316 5,886 12,898 633,913 (12,731) 762,150
Six months ended 31st March 2024 (Unaudited)
At 30th September 2023 24,868 97,316 5,886 12,898 649,399 (14,770) 775,597
Repurchase of shares into Treasury - - - - (18,166) - (18,166)
Profit/(loss) for the period - - - - 43,527 (191) 43,336
At 31st March 2024 24,868 97,316 5,886 12,898 674,760 (14,961) 800,767
Year ended 30th September 2024 (Audited)
At 30th September 2023 24,868 97,316 5,886 12,898 649,399 (14,770) 775,597
Repurchase of shares into Treasury - - - - (41,995) - (41,995)
Profit for the year - - - - 124,902 2,383 127,285
At 30th September 2024 24,868 97,316 5,886 12,898 732,306 (12,387) 860,887
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At At At
31st March 31st March 30th September
2025 2024 2024
£'000 £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 785,335 801,171 888,542
Current assets
Other receivables 648 2,366 583
Cash and cash equivalents 163 23,056 14,209
811 25,422 14,792
Current liabilities
Other payables(1) (557) (605) (841)
Net current assets 254 24,817 13,951
Total assets less current liabilities 785,589 825,988 902,493
Non-current liabilities
Deferred tax liability for Indian capital gains tax (23,439) (25,221) (41,606)
Net assets 762,150 800,767 860,887
Amounts attributable to shareholders
Called up share capital 24,868 24,868 24,868
Share premium 97,316 97,316 97,316
Exercised warrant reserve 5,886 5,886 5,886
Capital redemption reserve 12,898 12,898 12,898
Capital reserves 633,913 674,760 732,306
Revenue reserve (12,731) (14,961) (12,387)
Total shareholders' funds 762,150 800,767 860,887
Net asset value per share (note 5) 1,159.6p 1,123.7p 1,250.1p
(1) Included in other payables is an amount of £294,000 (31st March
2024: £361,000; 30th September 2024: £335,000) for repurchase of shares
awaiting settlement.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 31st March 30th September
2025 2024 2024
£'000 £'000 £'000
Operating activities
Net (loss)/return before taxation (80,726) 54,751 164,084
Deduct dividends receivable (2,799) (2,826) (8,756)
Deduct bank interest received (52) (524) (1,179)
Add interest paid 16 - -
Add losses/(deduct gains) on investments held
at fair value through profit or loss 80,507 (54,565) (161,223)
Add losses/(deduct gains) on net foreign currency 145 (45) 528
(Increase)/decrease in prepayments, VAT and other receivables (38) (1) 16
Decrease in other payables (72) (148) (57)
Net cash outflow from operating activities before dividends,
interest and taxation (3,019) (3,358) (6,587)
Interest paid (16) (6) (6)
Tax paid (310) (297) (942)
Dividends received 2,812 2,957 8,910
Interest received 52 435 1,179
Indian capital gains tax paid (4,194) (3,513) (11,837)
Net cash outflow from operating activities (4,675) (3,782) (9,283)
Investing activities
Purchases of investments held at fair value through profit or loss (72,796) (71,775) (253,363)
Sales of investments held at fair value through profit or loss 95,325 94,502 297,172
Net cash inflow from investing activities 22,529 22,727 43,809
Financing activities
Repurchase of shares into Treasury (31,755) (17,978) (41,833)
Net cash outflow from financing activities (31,755) (17,978) (41,833)
(Decrease)/increase in cash and cash equivalents (13,901) 967 (7,307)
Cash and cash equivalents at the start of the period 14,209 22,044 22,044
Exchange movements (145) 45 (528)
Cash and cash equivalents at the end of the period 163 23,056 14,209
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 31st March 2025
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. Financial Statements
The financial information for the six months ended 31st March 2025 and 2024
has not been audited or reviewed by the Company's auditors.
The financial information contained in these half year financial statements
does not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006.
The information for the Company for the year ended 30th September 2024 has
been extracted from the latest published audited financial statements. Those
financial statements have been delivered to the Registrar of Companies and
included the report of the auditors which was unqualified and did not contain
a statement under either Section 498(2) or 498(3) of the Companies Act 2006.
3. Accounting policies
The financial statements of the Company have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those
standards.
Where presentational guidance set out in the Statement of Recommended Practice
(the 'SORP') for investment trusts issued by the Association of Investment
Companies in July 2023 is consistent with the requirements of IFRS, the
financial statements have been prepared on a basis compliant with the
recommendations of the SORP.
The accounting policies applied to this condensed set of financial statements
are consistent with those applied in the financial statements for the year
ended 30th September 2024.
4. (Loss)/earnings per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2025 31st March 2024 30th September 2024
£'000 £'000 £'000
(Loss)/earnings per share is based on the following:
Revenue (loss)/profit (344) (191) 2,383
Capital (loss)/profit (66,679) 43,527 124,902
Total (loss)/profit (67,023) 43,336 127,285
Weighted average number of shares in issue 67,205,494 72,348,779 71,214,156
Revenue (loss)/profit per share (0.51)p (0.26)p 3.35p
Capital (loss)/profit per share (99.22)p 60.16p 175.39p
Total (loss)/profit per share (99.73)p 59.90p 178.74p
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2025 31st March 2024 30th September 2024
Net assets (£'000) 762,150 800,767 860,887
Number of shares in issue excluding shares held
in Treasury 65,727,716 71,259,755 68,864,107
Net asset value per share 1,159.6p 1,123.7p 1,250.1p
The Company will only re-issue shares held in Treasury at a premium and
therefore these shares have no dilutive potential.
6. Disclosures regarding financial instruments measured at fair value
The disclosures required by the IFRS 13: 'Fair Value Measurement' are given
below. The Company's financial instruments within the scope of IFRS 13 that
are held at fair value comprise its investment portfolio.
The investments are categorised into a hierarchy consisting of the following
three levels:
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets and liabilities.
Level 2 - valued by reference to valuation techniques using other observable
inputs not included within Level 1.
Level 3 - valued by reference to valuation techniques using unobservable
inputs.
The recognition and measurement policies for financial instruments measured at
fair value are consistent with those disclosed in the last annual financial
statements.
The following tables set out the fair value measurements using the IFRS 13
hierarchy at the relevant period end:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2025 31st March 2024 30th September 2024
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 785,335 - 801,171 - 888,542 -
Total 785,335 - 801,171 - 888,542 -
JPMORGAN FUNDS LIMITED
19th June 2025
For further information, please contact:
Sachu Saji
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or or +44 1268 44 44 70
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
ENDS
A copy of the Half Year Report will be submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Half Year Report will also shortly be available on the Company's website
at http://www.jpmindian.co.uk (http://www.jpmindian.co.uk) where up to date
information on the Company, including daily NAV and share prices, factsheets
and portfolio information can also be found.
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