26th May 2020 18:36
(Alliance News) - India Capital Growth Fund Ltd on Tuesday set out measures to boost its fortunes after "significantly" under-performing its benchmark, backing its continuation.
Shareholders will vote on the investment company's finish at an extraordinary general meeting on June 12.
"The company has significantly underperformed its benchmark, India's BSE Mid Cap Total Return Index, in the recent past. This is disappointing and means the company is likely to fail the second part of its three-yearly assessment in August, triggering a continuation vote," Chair Elisabeth Scott said.
"The choice is between winding up the company at a time when Indian mid-cap and small-cap equities are trading at close to their 15-year lows; or taking strong measures to improve performance and provide shareholders with a way to redeem the bulk of their holdings, if they wish, at a set date in the future."
India Capital noted there is "good potential" for it to improve its trading and is proposing its continuation.
India Capital proposed introducing a redemption facility, which will allow shareholders to redeem all or part of the holdings on December 31, 2021 at a maximum of a 6% discount to its net asset value per redemption share.
"Given the strong likelihood of there needing to be a continuation vote this year and the changes made by the investment manager, the board has decided to bring forward the date for proposing a continuation resolution and at the same time to put forward these proposals," India Capital said.
Shares in the company closed 11% higher at 44.80 pence each in London on Tuesday.
By Eric Cunha; [email protected]
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