Investment Policy
Naya Bharat Property Company plc is an Isle of Man company established to take advantage of the opportunities that exist in the Indian property market and property-related sectors. The Company has an indefinite life and expects to provide Shareholders with an attractive return to be achieved primarily through long-term capital growth.
The Company will invest primarily in listed companies whose principal activity is the ownership and/or development of land in India. Additionally, the Company may invest in ancillary companies which service the Company's prime mandate; these listed companies will typically be found in the areas of building materials, construction, infrastructure and property credit.
The Company's portfolio of investments will seek to provide exposure to the residential, commercial, retail, industrial and Special Economic Zone ("SEZ") sectors. Geographic exposure will also be diversified across major and secondary cities in India. The primary focus of target companies is the development of property portfolios/land banks, although certain investee companies may also retain completed properties for income generation. The Company may also invest in special situations such as small capitalisation stocks with perceived large undervalued property holdings, where a catalyst for re-valuation/realisation of the property assets is anticipated.
The Company may also invest in unlisted companies whose principal activity is the ownership and/or development of land in India although it is not anticipated that the Company's investments in unlisted property companies will exceed 25 per cent. of Net Asset Value once fully invested and measured at the time of investment. However, if suitable opportunities arise, the Company may invest more than 25 per cent. of its Net Asset Value in unlisted property companies.
Additionally, the Company may invest in freely transferable low exercise price warrants, low strike price options, zero coupon equity linked notes or other similar instruments which in the view of the Manager offer an efficient means of providing the Company with exposure to Indian companies. These products typically aim to provide economic exposure to the underlying security without the associated tax and administrative burdens of investing directly in the local market.
To achieve its investing policy, the Company will rely on the Manager's disciplined bottom-up value-investing approach in order to select its investments. Where valuations appear too rich, the Company will not be averse to holding cash as a defensive strategy. In order to diversify its risk the Company or its Group intends, except in special circumstances, to invest in a minimum of ten companies. There is no limit to the percentage of NAV that may be held in cash.
The Company may, but does not currently intend to take a seat on the board of directors of investee companies. An active dialogue with the management teams of many of the investee companies will be pursued in an effort to put forward suggestions for improved investor/market visibility and transparency.
Hedging
Although it is not anticipated that it will do so, the Company may enter into certain currency related transactions in order to hedge its currency risk.
Bank Borrowings
In seeking to enhance returns for Shareholders, the Directors believe that it may be advantageous for the Company to borrow at an appropriate level in order to acquire investments which would achieve a higher return than the cost of borrowing. The Company or its Group may therefore make use of debt facilities for investment purposes and may borrow up to 50 per cent. of its NAV (measured at the time any borrowings are drawn down). The Articles contain no restrictions on borrowing.