Investment Opportunity in Indian Stock Market

by Alison Sammes
  • New IPO for ASX listed Indian Fund
  • Ideal opportunity to participate in historic changes in India
  • Run by top ranked Indian Fund manager
  • ~65% in large and mid cap stocks with 35% in high yield fixed income
  • 3.5-4.0% initial gross yield
  • Long term capital growth potential
  • Peaking of global bond markets underscores the pickup in growth
  • IPO closing 19 June 2015 (apologies for late notice but only just found this)
  • Minimum raising of A$35m already achieved
  • 1:1 A$1.00 18 month Loyalty Option vesting 6 months after listing

The main theme of Dawes Points is to review investment opportunities in the Resources Sector and to participate in the current Asian based economic boom that should run for the next 15-20 years.

The focus of most of the commentary over the past two years has been that the market place has been too pessimistic on the outlook and the entire Resource Sector has been beaten down and that remarkable value exists in ASX listed resources stocks.

Dawes Points has highlighted the strength of the US market, the growing support of the German Index, the recovery in many European indices and the strong performances of the Asian markets, China, India, Singapore, Sth Korea, Philippines and Taiwan.

Major political changes in China, Japan and now India have established the base for set up substantial economic changes that are far reaching and historic.

China is reforming in so many ways with the rise of a 1,400m strong consumer class that the world cannot readily conceive.  Rising incomes and a massive RMB 100,000bn in household savings has begun to drive a surging Shanghai stockmarket.  This consumer led change will ensure economic growth in China is robust and dynamic.  It appears that the property market has already turned and housing inventory is falling.

Dawes Points has often shown the strong performances of all the Asian markets but the Indian market began its surge over 20  months ago in 2013 and has led the Asian charge.

The election of Nerandra Modi, former Governor of Gujurat State marshalling with 10 years of 10+% economic growth, is laying the base for a modernisation of it 1300m population that should follow China’s remarkable rise.  Of course it will be different and India will be India but the timing is now.

However, note that the Modi Bharatiya Janata Party (BJP) Government has achieved the first single party majority in India in 30 years.

Naturally Dawes Points would like you to invest in Northern Star, Tribune or Cudeco but this is good diversification on the standards we know  – ASX listed and liquid.

To better understand the opportunity in India, it is probably easiest to start with the the Performance of the Shanghai market which is up 150% in the past year but note should be made of three ETFs that have performed well without the SSEC’s exuberance and are up over 50% in the past year but do not appear to be particularly overbought.

FT 25 Big stock index

China Industrials Index  ETF

China Financials  ETF

These are not over extended markets in my view.

In India the picture is much the same.  Market has surged but is not over extended given the correction of the past few months. The two main indices are the BSE 30 and the NSE 50.

The Bombay Stock Exchange Sensex Index

And the Nifty Fifty National Stock Exchange Index

The India Fund is seeking to raise a minimum of A$35m and a maximum of A$100m at A$1.00 per share and will have a 1:1 loyalty option (only available to shares purchased in the IPO and held to the entitlement date of 6 months after listing) with strike price of A$1.00 and expiry date of 18 months after vesting.

The ASX entity

The fund will have a 1.25% Management Fee and a 15% performance fee over the Benchmark (see attached flyer for details).

The fee will be split between the Company administration and the Fund Manager

The Company will be administered by Tristar Capital for a 0.75% administration fee and a 0.6% outperform fee The CEO is John Pereira.

The Fund will be managed by prominent high performing fund manager Kotak Management (UK) KMUK, which has US$11bn under management and a ten year track record of outperformance, for a 0.50% Management Fee and 0.9% of the outperformance fee

Equities 65%  (Only large and mid cap stocks)

Fixed Income 35% (Indian Govt binds currently yield ~8%)

If nothing else you are encouraged to look at Section 3 (p29) of the Prospectus with its India in Perspective review and especially p35 where a breakdown of the top 20 of the NSE stocks is given and showing the role of Information Technology, Financials and Energy in India.

Details are contained in the four attachments

  1. Summary Flyer
  2. Prospectus
  3. India Fund Application Forms
  4. Research Note

Apologies for the late notice but I am travelling this week.

If you have any interest can you please advise by email.

Applications can be posted to Paradigm Securities GPO Box 5263 Sydney NSW 2000 or emailed with funds transferred to the Paradigm Trust Account.

Paradigm Trust Account

BSB 082 067


Barry Dawes


India Fund Logo

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