Okay, I think we are live. Let's see. Yeah, I think we are. So, I should... There we go. Yeah. Very good. I should get going. Apologies for the late start, which is... had a couple of technical issues as usual. But, we've got a lot to get through this morning, so I shall wait... delay. So, we are going to be doing a bit of news from me, and then Hanno to 100 Patty to talk about what happened during May, and then I'm going to be talking to Prashant about the sugar in India. So, I thought those are... those are the four things I pulled out. As I say, I won't... I don't want too much. But, let's go with Bluefield first. So, obviously, the big story is that it's being bid for by Drax. And you can see the uptick in the share price there at the end of that chart. But, really, it's a bit pathetic when you look at where it was either back in 2023.
So, the Drax has said that they're going to pay number for the shares, and will also get the dividend that's already gone ex, which is very generous of them. I think people be very upset that didn't happen. In terms of the where... what that means, it's a 70% premium to the previous closing price. But, that was only 9% higher than the 72.2p level that it was back in November when it put itself up for sale. And just shows you, I think, the sort of level of... apathy is the wrong word, but just sort of the... just there's people quite wary of the whole sector still. And especially there's been a lot of bad news coming out. So, obviously, the NAV at the end of June when this was announced was 116.56p, and it's an 18.6% discount to that. And the last NAV it had already dropped to 104.52. It's a 9.3% discount to that.
Now, if you remember the whole story with this, there was at one stage there was an idea muted that they were going to knock together the fund and management company because that would make it more attractive. But actually in this event, Drax is not bidding for the management company. But the statement does acknowledge the contribution that the management team have made to building B Surf into what it is. And I do think that is worth recognizing and I do hope they end up somewhere. The board is recommending the deal. The way it's going to be structured, it'll need 75% approval. We'll see the document published for that by the end of June. And then that will also have things like when the meetings will be and, you know, with cut-off times for voting and that sort of stuff. But I expect it to sail through unless another bid comes in. Whether that happens or not, I think the jury's out a bit because of the, you know, the way works have been going with the news and everything else. It'd have to be a good fit with somebody else. So, this should all go through before the end of September. They've said, well, by, you know, by during Q3. So, that means sometime after the end of June and probably end of September. I hope they get on with it because we will miss out on another dividend if it goes towards the end of that period. So, there was supposed to be another dividend ex in August and then September. So, obviously that is not going to be coming anymore.
In terms of what it means for us the sector, there are some pretty chunky discounts out there. So, it's gone into, as it says there, about 30.8. Closest read across is probably something like Foresight, maybe Next. Next is obviously got a bit more debt to worry about. They had a... take a disappointing NAV out this week. Pure play plays things basically are trading better. I thought though that this numbers was sort of worth having a look at. It's really not very good. And it's quite disappointing that the price numbers in particular aren't great here now. And we'd like to see obviously the whole sector turn around. I would highlight maybe there's some more successful things being Foresight Environmental and GreenCoat Funds. But yeah, it's... we need something to perk up a bit really.
HG. So, again we've got a little tick up in the share price there. I mean, we'll talk about what's going on with that. But as soon as the NAV is coming down. One of the things that's been going on, one of the main things that's been going on is there's been a lot of buying interest in the stock from... well, the most... the most recent one is from the partners of HG and their employees. So, they're saying we're going to up our stake in the trust from about 6% to over 15% and we're going to do it by buying stock in the market. That would cost them about 166 million. So, that they have been putting money behind their... the funds that they run. They... they put quite a lot of allocation into their... the new funds that they've just launched, so you... limited partnership funds. HG Capital is the biggest investor in those funds. And so, they're... they're so doubling up by buying stock in the trust as well. And so, it obviously makes sense to do that at a big discount.
You've also had that investment that we've reported before from the Preqin people, the people behind Valhalla Ventures. They now own 9% now. And then there's also a buyback program going on. And that's bought about 4.7 million shares so far. They stopped buying at the beginning of... at the end of April. I'm not sure why that is, but it might be because they thought they were inside the head of the capital markets day that yesterday. I was there. I'm not supposed to be reporting on it to be honest. But I can just tell you what... what they said in the statement ahead of it basically that they... they are pushing quite strongly this message that we are investing in AI. There's a lot of AI products and projects embedded within the companies that we... we've got now. It is turning itself into real revenue. And this is having to win new customers and retain existing ones. And it's expanding margins because they're saving costs on particular software development. So, I do think that's a positive story. And I will... I will try and go into that in a bit more detail maybe in an article or something in a little while.
They're also pointing out that there's been a recovery in the values of software stocks and they use this iShares ETF as the sort of benchmark for that. You can see that there. I'm a bit wary of the value of that. Because it is dominated by a few big names. And if you look at the share prices of Oracle, Microsoft, and Palo Alto, there's been a big uplifts since they... they bounced a long way off the bottom and I think that's really what's driving that index higher. Whether those are the exact sort of things that really cross into actually's portfolio, I think I'm less... less convinced. But what anyway, that... that is what that IGV index looks like.
Tufton Assets. This is the ship leasing company that we proved doesn't get a lot of... a lot of attention from most people. It's had quite a big NAV uplift announced today. And it's really coming on the back of very strong performance because of the war in the Middle East. Lots of ships have been trapped inside the Gulf. And a lot of... lots of people trying to shift supply of various things out from and then trying to source it in other places. It's really driving the up charter rates for the vessels that they've got. Helpfully, they've just taken on two new vessels and they started work in April and they're already chartered. And their charter rates are going up. And the managers are really quite optimistic about this. So, we could see further NAV improvement from here. I thought it was worth flagging.
And then lastly, sort of another bit of good news, I suppose is the rise up in the SpaceX valuations for Baillie Gifford. We've done the crunch the numbers. We reckon it's about 1.6 trillion that they're valuing that now. That's up from 1.25, so that still leaves 11% upside to the muted IPO finding price. I am more in line with what I Morningstar say, which is that I don't think it's worth that, to be honest. But there's plenty of interest and plenty of banks and lawyers and all sorts of other people who have a vested interest in making sure it happens and index providers as well. So, it may be that... that they're able to sell some of that stock at those valuations. Good. That's enough for me. I'm now going to hand over to Andrew.
That's great. Thank you very much indeed, James. Very interesting as always. There's been quite a lot of chat about exactly how the solar bid will impact the rest of the sector. So, we'll... we'll wait and see in time. So, I'll talk about what's happened in the investment trust sector during May, which was on the whole a pretty good month actually. We can see here the rises across the sector. There's some quite big ones there. On average, the sector was up 4.4% and you can see there were some excellent gains within that. So, it was a good month for the sector. Now, there were some definite themes I think that have emerged and I don't think these are too surprising. In the blue here, I've just marked three of the technology names that were still marching much higher. And really, I think this is still very much an AI-driven market. In every meeting I have now, AI is at the top of the agenda for discussion and there's no escaping it. And we've seen, of course, this massive rally in these tech stocks that has continued throughout May.
And I think as well that informs the other major theme of the month, which is the strong performance of emerging markets and Asia in particular, where again, there's a lot of tech embedded in a lot of these trusts. They tend to have large holdings in Taiwan Semiconductor, in Samsung, in SK Hynix and so forth. And I think those have also been driven quite substantially by this AI rally. I'm not going to talk about emerging markets because we'll have Prashant to do that in a far more articulate and well-informed manner than I can manage. So, I will talk about US Solar Fund, which is at the top of that list of risers. On the way down, there were not too many significant fallers. Only four... Sorry, only four double-digit fallers there. Special situations on the whole, and a few smaller ones. Again, not too much there to get us excited. There's just one trust I do think that stands out here, which is Fidelity Asian Values, and I will talk about that one because that's gone down by 5% over the last month, whereas we saw so many of those other Asian investment trusts going up. So, there's clearly a disconnect here that I think is worth examining.
So, let's move on to US Solar Fund. This is the 5-year chart, really just illustrating what a terrible disaster this has been for any investors that have held it for any length of time. It's come down there from just over a dollar at the start of this period down to a low of about 28 cents, and up now to 36 and 1/2. It's had so many problems. It's suspended its dividend, it's changed its manager, it's tried to sell its assets, and it's really one of those renewable energy trusts that just hasn't worked out. But potentially now things are changing, and we've had a bit more news. So, if we can just... just move on now. The... the new manager, who's been in place, I say new, they've been in place since December 2023, is Amber Infrastructure. And when they were appointed, quite considerable stress was put on their experience in acquiring, managing, and most importantly, divesting solar projects in the US. And that's really, I think, what this trust has been trying to do. It has been through a strategic review, but last year the board indicated that effectively it wasn't able to obtain a good price for its assets. So, the trust has continued. But then, on the 18th of May, came the announcement that the trust is in talks now with a potential buyer as a significant premium to the current market capitalization. Now, that was before this very recent bounce in the shares. But this does seem like a serious proposal and a 90-day exclusivity period has been granted. So, there's nothing imminent, I don't think. This may not happen until perhaps August. And of course, that it's always possible we might see an extension or indeed nothing else happening here. But I think there is a significant possibility of a takeover. And this is interesting because the shares are still at a very significant discount to the latest NAV, which was at the end of 2025, which was 60 cents per share. Whereas, the current share price is 36 and 1/2. So, that set me thinking that I ought to do some maths here and work out exactly what the odds were of a takeover and whether there could be some further benefit be had. And I do think it's interesting now to... to look at this a little bit further.
So, you can just perform some probability calculations. They're not too difficult. You just work out what you think the chances are of the takeover going through and at what price. And therefore, also what the odds are of the takeover not going through and what happens in that circumstance. So, we can postulate a few parameters and I don't think it's realistic to think that you're going to achieve an exit at the full NAV of 60 cents. But I think it is possible that you might be able to come out at a 20% discount to that, say maybe 48 cents on the upside. And let's assume for the moment a failure value of 28 cents. We can do the maths, and I thought what was most interesting here was to work out what the market is currently indicating is the probability of this deal going through. And actually it's only 42 and 1/2%. So, the market is not really pricing in any certainty at all of this takeover going through. And I think maybe that's informed by being burned before, you know, once bitten, twice shy. I think there is indeed a risk that nothing will happen here, and it's... this deal won't go through. But there's a potential uplift there, and if you are interested, I think those probability calculations are really interesting, and they indicate there's still a bit of value here for optimists.
So, let's move on to Fidelity Asian Values. And this really stands out in the performance tables. So, here I've listed the three Asian trusts that are in the Asian Smaller Companies sector. And then below them four more Asian trusts that are in the broader Asia Pacific sector. And if we look at the performance over 1 month and 3 months, actually whether you're looking at share price return or NAV return, Fidelity Asian Values really stands out. It's... it's in negative territory, most of the others are significantly positive. So, something has happened here which I think needs a bit more analysis. So, my first thought was that it may well be that markets have been driven by the big AI-dominated stocks at the present time. So, it could really be these smaller companies by us that accounts for this. But, I don't think it is because Fidelity Asian Values is behind those other smaller company Asian Trust. And also, the trust does have quite significant stakes in some of the big companies in the region like Taiwan's Taiwan Semiconductor and Samsung. So, that's not really a good explanation for this. I think it's almost certainly down to the trust really robust value style. The trust really does trade on its value style. And I know because I've been following this trust for many years that it does sometimes diverge very significantly from its benchmark and the peer group.
I... I looked back actually to see what had happened before, and I went back to early 2018 to see that this was another very similar period for the trust where markets were really being driven by growth, growth, growth. Value was out of fashion, and the trust really lagged for a period before it caught up. And reading the manager's comments again, I think this is evident because they talk about taking contrarian positions and how those are currently working against them because they're under... underweight in Taiwan, which is really one of the leading dominant markets at the present time that's growing rapidly. And they have some more in Indonesia, which is not performing so well. So, I really... I really think this is about the value style. And the trust, I think, could well come back into its own if there's a style rotation out of growth and back into... back into value. So, my sense is that we're in an unusual period at the moment, a very narrowly led market performance where it's those semiconductor companies in particular and the AI enthusiasm that's really leading the market. And that's very much against the style here and certainly it's not helping those Indonesian names. So, I thought, well, I'd be interested in the trust on the right level of discount. That's one of the benefits of having some discount volatility in the market, that it means that when trusts are out of favor, you can seek to benefit from that by buying on a wider discount. But actually the shares have not really fallen sharply enough yet to generate a wider discount. It has been the asset value performance that's been the issue here. Now, the discount's only 3.6%, but this is definitely a trust I'm going to be following quite closely to see what happens from here. Okay, I think that's... that's it for me, James, so I'll hand back to you.
Brilliant. Thank you very much, indeed, Andrew. That's very interesting, as always. And I am now going to be talking to Prashant about His Choice India Equity. So, good morning, Prashant. Thank you for doing this. I should probably... I should probably say I topped up my holding in the Sharia India only a couple of weeks ago, so I'm hopefully going to tell you that I haven't done anything stupid. So, over to you. I'm going to let you talk about the...
I think we both are in the same camp.
I shall give you control. Can I get the controls first? No, I can't. So, maybe if you just ask me to move them, then we'll do it that way.
Yeah, so slide... Maybe we can, you know, and I'll try to keep my prepared comments in about 15 minutes, James, if that's okay, and then rest of the time hopefully we'll have some engaging questions from the audience as well as from yourselves. So, if we go to slide number four, which is... Yeah. So, just what a few things. Basically, in... in summary, we are a very well-resourced team with nearly 35 people focused on India alone or in... involved in India research. We have a larger team of close to 50 people in the emerging markets, but of those 35 people are involved in India research, yeah. Probably larger than most others in the industry, be domestic players or... or global players. I can't think of anyone else who deployed as much talent and caliber as we have. It's following... the team follows a very rigorous research proper... process, including our proprietary OpCo-FinCo framework, and have a very long track record now of generating very strong alpha across the market cap spectrum, large, mid, small, but as you'll see later, the strength of the team, the size of the team, the caliber of the team allows it to really mine even in the smaller cap segment where it is lot more inefficient and alpha generation can be very high if you do it right. Just investing in small cap does not mean returns can be higher... alpha can be high. You have to generate... you have to identify the right ones and invest in the right ones while avoiding the bad apples, yeah. So, you'll see more of that evidence later.
Our interests are very well aligned as any of you and most of you and James, you as you are an investor, you would know that it's a very unique fee structure where we charge zero fixed management fee. We only get paid if we generate alpha. So, no performance, no pay, yeah? And it is one of the best in class company structure in the trust universe, not just amongst India trust but across trust universe. So, we're doing all this in what we believe is a multi-generational opportunity in what I call once in an era transformation of the Indian economy. So, with that let's dive deeper into who we are, what we do and performance. Next slide is slide five. This is a little bit about ourselves. We... I founded this group White Oak Group in 2017. So, today marks the ninth year anniversary, 5th June. We are today 11 and a half to 12 billion dollars. What you see here is 7.39. That does not include the domestic business in India which is, you know, now close to 4 billion dollars or just over 4 billion dollars. So, we're close to 12 billion dollars at this time of AUM. Most of it is India. 75% of AUM is invested in India, but we also have emerging market strategy which is also doing very well including the trust that is doing very well and that's about 25% of our AUM. Next, if we go to slide number 23 straight away to performance section.
So, as you can see here, the performance has been very strong. If you look at since inception, you'll see at the very bottom trust has delivered net of fees costs has delivered 531 basis points of alpha at 12.3% absolute GBP returns. Yeah, this is the share price return. The NAV is slightly higher at this point while the trust usually always trades at a premium at this time there's a minor discount which I think is a great opportunity which is what I think James was talking about when he has... has made the investment. On the right hand side you see the graph that the trust is meaningfully and the NAV both track the NAV and the share price track very closely. Those are the top two lines dark blue and light blue and has far exceeded the benchmark. If you go to the next slide you'll see that there's been strong outperformance compared to the benchmark which is in grey. So Ashoka Trust is in green then the benchmark and then the three peers. So if you look at the top half of the NAV performance the trust is up 146% in NAV compared to 69 of the benchmark whereas the three peers are up 10, 36, and 60%. In fact our return I just realized is higher than all three of the peers combined and same is the return of the share price as well. Higher than the other three combined and this is over eight year time period. So not surprising then and I'm greatly appreciative and grateful of the investor base client base who have accorded on average a premium to the trust a small premium of about 0.3% compared to a double digit or mid-teens discount to the peers on average and that has enabled us if we go to the next slide. So this... this slide sorry shows the premium that on average it trades at a slight premium though right now it is a small discount but if you go to the next slide that shows that how this has enabled us to grow the trust. It's up starting from a 46 million reais in July 2018 thanks to the trust and confidence of the investors in us it has grown nicely to almost 400 million pounds at the end of April. 760 plus percent growth in a time period when the rest of the trust market, particularly for India, has declined and more broadly as well might have declined. As you'll see, the peer group over here. We are the... not only the largest market cap now, also the most actively traded by value amongst the India trusts. If we go to the next slide, it shows that the performance has all come from stock selection. If you look at the bottom row, the... this is gross of fees and gross of taxes and gross of, you know, expenses. So, keep that in mind. This is FactSet attribution analysis. What you'll see on the right... three right most three columns, the way to look at it is out of the 146% on this gross basis alpha, 150 all of it has come from stock selection. And you'll see on the left side graph, small cap has been the biggest contributor to this alpha as our sharing. Even large cap alpha is stronger than, I would say, what... what... what the total alpha, if at all any alpha is there amongst the peer group. And the large cap itself is very healthy top decile kind of performance or breath better. But small cap where you'll see that the team has delivered nearly 600% return. Again, this is gross... gross and gross of everything compared to much smaller less than double triple digit returns of the benchmark. If we go to the next slide, same story from a sectoral attribution perspective as well. If you look at the bottom row last three columns, 144% out of 147. So, nearly 100% of the alpha has come from stock selection. And as you can see on the graph on the left side, every single sector has delivered positive stock selection alpha. Just speaks to... speaks volumes about the strength of the team, caliber of the team, consistency of the team in delivering returns through stock selection, which is how we believe alpha can be generated over time. If we go to next slide, this shows the top 10 contributors and detractors. What's interesting to see is few points here I'll make. The alpha is very well distributed. No single stock or two make or break the performance. It's very granular and very well distributed. The 10th largest contributor in returns is higher than the worst detractor. If we now move to slide number, jump a few slides to slide number 33. The portfolio composition, this is what it looks like on April 30th. The sectoral weights you'll see in absolute terms the portfolio, the largest sectors are financials, industrials, health...
health care, and consumer discretionary. Relative to the benchmark, the largest sectors are industrials and health care. Bottom left side, you'll see small cap — more than half the portfolio, 56%, is in small cap compared to 15% of the benchmark, so 40% higher allocation. Obviously, the trust structure is beautiful in that it allows us to invest in a number of the smaller cap opportunities, which maybe some of them may be less liquid, but where the alpha potential is so huge that it more than offsets for the lower liquidity and benefits the returns. Large cap is 32% compared to 66% in the benchmark, and mid cap is 11% compared to 19%. On the bottom right-hand side shows some characteristics of the portfolio.
You know, historically we've always tended to have somewhat higher growth in the portfolio — projected revenue and earnings — and somewhat lower or in-line valuations when measured from our OpCo-FinCo multiple approach, which I'm not going through in details right now, as many of you might have heard me talk about it before, but happy to dig into how we do what we do later if there are questions around that. The top 10 positions just gives you an idea that we're not taking extreme positions in any individual name. It's very well diversified, so high alpha is generated despite a very well diversified portfolio of 169 names.
It's a criticism I have faced for the last 20 years that I've managed India portfolios professionally. There is a general misconception, or I say a myth or superstition, that concentrated portfolios are what deliver high alpha. And over the last 20 years, I've answered that question probably 20,000 times and even have a webinar on that. We totally disagree with that myth or superstition, and we have proof of over 20% year after year and over any time period generating peer-group-leading performance while most of the time or on average having well over 100 names in the portfolio. We believe a higher number of names allows us to generate higher alpha.
Diversification or risk reduction is just a byproduct. That's not the goal. The higher number of names allows us to generate higher alpha because we are able to then go deeper into the market cap spectrum and invest in smaller cap names, which more concentrated portfolios just ignore because they're not able to take that risk to invest that heavily in smaller cap names, and so completely miss out on the potential of the most alpha-fertile, alpha-rich segment of the market. If you then go to — jump to slide number 40.
This is just to show that I've always maintained the most compelling reason to invest in India is the alpha potential of the market. And this is a study which was published several years ago in the Wall Street Journal. But even now, my belief is that, directionally at least, the graph would look similar, where India has historically had the highest alpha potential and most persistence in terms of managerial performance, and not unexpectedly, the US has the lowest.
If we go to the next slide, it shows again the point that I've often made: markets can be expected to generate similar returns over long periods of time. And when I say long periods of time, a long period of time in investing is measured in decades rather than years. While obviously we as investors or fund managers often talk about this year, last year, three year, five year and so on and so forth, a long period really from an investment perspective — often people say investing is a marathon, and that is true. A marathon is 26 miles, and the investment time horizon should be 26 years or somewhere measured in decades. What I'm showing here is the market performance across different regions of the world including US, Europe, emerging markets, and comparing that to India. The first half of the century till date, India was the best performer. The second half, India has delivered a very healthy return, beaten Europe at 9%. Obviously, US has been the best performer. US was the worst performer till 2012. People forget that.
People, because of the recency bias, today tend to believe that the US has always, since the beginning of markets, outperformed the other markets, but that's not true. It's just more of the recency bias. 10 to 12 years ago, people didn't like the US as much. And if you look at the entire 25-year period since the turn of the century, you'll find that the world has returned 7.8%. US at 8.8%, somewhat ahead of the world, but that's mostly because Europe has delivered only 6.1%. Emerging markets is bang in line with US at 8.8%, and India has delivered 11%. The purpose of this slide is not to suggest that India would always deliver higher returns than other places or anything like that. The purpose of this slide is to show that various regions in the world would more or less return similar mid-to-high single-digit returns to investors. That's always been my belief and continues to be going forward as well, because earnings growth, as you see at the bottom, is in that mid-to-high single-digit range. You have to add dividend as well and P/E multiple changes and whatnot, but earnings growth would more or less mimic corporate sales growth, which would more or less mimic the overall GDP growth in nominal terms in respective currencies, which translated into dollar terms tends to be mid-to-high single digits.
And that is the underpinning rationale for why we believe markets would deliver mid-to-high single digits over the longer period. Where you can differentiate is not by trying to time these markets or call which market is going to outperform other markets, but by identifying better managers in any individual market who can substantially outperform the market. And so you don't only have the market return, but on top of that, you have the outperformance or alpha, which is really the only differentiator out there that one can benefit from, in our view. If you then go to the slide — I'm going to skip the longer-term case for Indian equities. I think at this stage everyone's well aware of it. If you go to slide number 44…
just shows what has driven the longer-term returns in India. The top half, as I was saying, nominal GDP growth rate of 12-plus percent in domestic currency terms, which translates to about eight-odd percent in US dollar terms. That has resulted in corporate earnings growth of 12-odd percent, and that's resulted in a return from the market of 11-odd percent. If you now go finally to the valuation slide, slide number 46…
you'll see valuation right now, top left-hand side. We're all probably aware that India has been a laggard of late, primarily because South Korea and Taiwan have done so well. India's premium compared to EM has contracted, as you'll see on the lower left-hand side. In the top left-hand side, you'll see India's currently trading towards the lower end of the last 10-year trading multiple range — 10, 12 years, I would say, since what I call the Modi era. And during the Modi era, the average has been 21 or close to 21. We are right now close to 19. And if you look at the bottom right-hand side, which is what I've always said, that India is most comparable to the US market, less so to the EM, by virtue of its rich variety of underlying sector mix, but more importantly, the democratic nature of the Indian political regime, and it has far-reaching implications for market multiples, which cannot be said of the EM on average. So, if you look at India relative to the US, it has always tended to trade in line with a 1% on average premium over the last 20 years. Right now, India is at a 9% discount to the US. Only other times where the discount has been materially wider is during the global financial crisis and during the COVID pandemic, for short periods of time.
So, now I would wrap up with slide number 64. While it's fairly fine print, believe me, each of these boxes shows the concerns and worries that people have had over the last 20 years all along about equity markets in general or the Indian market in particular. Each of these boxes now seems like you might have to stress your memory whether this thing really happened. But at the time that those events were unfolding, people were terribly scared. Like the Grexit — I remember Grexit around 2011-12. Managers in India were so worried about Grexit that if it happened, it would be like a global financial crisis equivalent all over again. Similar was the worry around Brexit. I mean, Grexit didn't happen. Brexit actually happened. And nothing happened to the market. So many a times these worries get overblown, and it always feels in the moment that it is the worst thing that could have happened for the economy or for the market. Whereas in hindsight, it's just another one of the hiccups or a tiny pebble in front of a juggernaut. So, I'll pause there and hopefully we can have questions from here.
Brilliant. Thank you very much for this great, very convincing story, as always. Please do put some questions into the chat box if you have them. But I'm going to kick off with one, because I think this is inevitably what people are thinking about: we've got the Middle East war and the oil price — and I know that's what you were just saying. But what is the short-term impact of that? Because the government's having to subsidize cooking fuel, is that right? And because a lot of the imports were coming from the Gulf region for oil.
Certainly. So, higher oil price — given that India is a big importer — lower oil price is better. 80-plus percent of India's net oil requirement is met through imports, so the lower the price, the better for us, no doubt. A higher oil price at around 90-100 now is worse than what it was in the 60s or so, no doubt. But remember, for any economy at any point in time, there are dozens — I mean, hundreds — of things that are working in favor and dozens working against. We have seen oil prices back in the 2000s which went up to as high as 150 and sustained for quite some time over 100. In fact, the finance minister once, I think, somewhere back then, had mentioned that if we can lock in our prices at 100 bucks, we'll lock in the prices for goods at $100, yeah? And then today 100 seems like so high a level compared to what we used to. So, that is one. Second, I want to point out that India does not subsidize oil. Oil is one of the most heavily taxed items in India. It's just that when oil prices rise, the Indian government does not let the impact flow through to the people at large; they reduce their tax take. Yeah, obviously Europe is one of the most taxed continents for oil, including the UK, but India is also very heavily taxed, and during such times the government reduces its tax intake. So, it is a hit to the fiscal.
Maybe as — let's chat, Andrew. Yeah, let's do that. Hopefully he'll come back soon. I mean, do you hold India in your portfolio?
Well, I must say, James, I had to smile when you said that you just topped up your Ashoka India holding, because I've just done exactly the same thing. Because my sense is that actually India is one of the great growth economies of Asia along with Taiwan and Korea, and I think you do want to have exposure to it. And Ashoka India has its excellent track record. You know, I do think it's a sector leader. And it's trading at a discount, which is actually a significantly wider discount than is common. So, it did seem to me like a very good entry point and a good opportunity to top up. And the other thing I think I would just say is that Prashant, I think, quite wisely decided that he didn't really need to talk about the long-term investment case for India because I think that's just baked in. We really should understand that by now, and it seems to me incredibly strong. So, yeah, I'm very positive about it.
I mean, for an economy of that size with that many people to be growing as fast as it is just year in, year out — the impact of that is really quite significant. I mean, it's a huge thing.
Yeah, and you have a growing middle class and, you know, increasing domestic consumption. And I think as well, a very supportive government. You know, speaking from the UK, we're not necessarily used to a government that really does support enterprise, and I think the Indian government does. And you have all of these quite well-educated young people who are very ambitious, keen to start new enterprises, and the government is backing them. So, I really do think there's a very good strong case for India long-term, very much helped by the demographics.
Yeah, exactly. Good. We've got an image, but no sound, so I'm really not sure what's going on. Maybe — can we talk about Bluefield? I know that's—
Yeah, I think we can. Bluefield was very interesting.
Did you think it was a fair takeout price?
I do. Because again, it's just not realistic to think that you're going to get full NAV. And I think the discount seemed okay to me. There's always a bit of sleight of hand, I think, when the bidder includes the dividend in their numbers because that was going to be paid anyway. So, you know, it's 92 and a half pence, not 95. But I think 92 and a half is actually pretty good. You know, you could buy these shares for 78, 80 pence a couple of weeks ago. In fact, I did. And so, I feel it's a very reasonable takeout price. And it does validate some of the valuations in other parts of the sector.
And actually, it kind of speaks a bit to what you're saying about US Solar. That people just don't seem to believe it when people say we're talking to somebody, we might get taken over. Who is going to believe it? And it doesn't get reflected in the share price.
Well, I think that's right. And I suppose in the case of Bluefield, it was quite a large portfolio, so the bid is about 548 million pounds. So that does reduce the number of potential buyers, doesn't it? In the case of US Solar, it's much smaller, and I would assign a far greater probability than the market is currently assigning to the possibility of a positive outcome there. So again, I bought a few of those, although I think you'd have to regard that as speculative. But we are in the final stages here, I think, of the renewable energy sector sorting itself out, rationalizing, thinning down. And the only thing I would say about Bluefield is that, to my mind, it's a great pity that that one is going, because it always struck me as being amongst the very highest quality of investment trust in the sector. So for me that was a sector leader, and it's a pity it's disappearing.
