Ashoka India Trust Outperforms Benchmark, Enters FTSE250 and Pays First Dividend

Ashoka India Equity Investment Trust: annual results, FTSE 250 promotion and a first-ever dividend

Ashoka India Equity Investment Trust has released its annual report for the year ended 30 June 2025. The headline: another year of outperformance versus the benchmark in a choppy market, promotion to the FTSE 250, and – for the first time – a dividend. There is a lot to like here, with a few flags to watch.

Performance vs MSCI India IMI: beating the benchmark again

For the year, the Company delivered a NAV total return of -0.2% in sterling, ahead of the MSCI India IMI at -6.6%. The share price total return was -0.9%. In a down market, beating the index by 6.4% matters – it preserves capital and compounds the longer-term track record.

Stretch the lens and it looks even better. Over five years to 30 June 2025, NAV is up 167.8% versus 123.6% for the index. Since launch in July 2018, the portfolio is up 184.6% against 106.8% for the benchmark, and the trust has grown from £46 million of assets at IPO to £450 million, securing FTSE 250 inclusion on 23 June 2025.

Key metrics	30 Jun 2025	30 Jun 2024
NAV per share (cum income)	278.9p	279.3p
Share price	281.5p	284.0p
Premium/(discount)	0.9% premium	1.7% premium
Net assets	£476.2 million	£435.4 million
NAV total return (1Y)	-0.2%	35.5%
Share price total return (1Y)	-0.9%	35.9%
MSCI India IMI total return (1Y)	-6.6%	37.7%

Stock selection: what helped and what hurt

Winners included OneSource Specialty Pharma (+55.6% total return, 4.1% year-end weight), Bharti Airtel (+25.5%, 4.0%) and Cholamandalam Financial Holdings (+33.7%, 1.7%). On the flip side, Varun Beverages (-27.2%, now a 0.0% holding), Tata Consultancy Services (-17.9%, 1.8%) and Grindwell Norton (-43.0%, 0.3%) weighed.

The Investment Manager credits stock picking in mid and small caps in particular. Worth noting: OneSource reported its first profitable quarter since listing, and Bharti Airtel benefited from industry-wide tariff hikes and strong execution.

First dividend: 0.5p per share

Ashoka’s objective is capital growth, so income is usually a by-product. This year, revenue built up to the point the Board must pay a dividend to retain investment trust status. An interim dividend of 0.5p per share will be paid on 31 October 2025 to shareholders on the register at 10 October 2025.

To set expectations: the Board says it is “unclear” whether dividends will be annual from here. Treat this as tidy housekeeping rather than a policy shift to income.

Scale-up: FTSE 250, new shares and a working redemption facility

Scale matters for liquidity and costs. The trust issued 14,849,496 new shares during the year, raising £42.2 million at a small premium to NAV to meet demand. Since year end, issuance has continued, with 171,491,893 shares in issue at the report date.

The annual redemption facility remains live and functional. At the 30 September 2025 Redemption Point, 2,549,082 shares were validly tendered and will be redeemed at 267.19p per share, with payments expected on or before 13 October 2025.

Since year end, both NAV and share price drifted. As at 6 October 2025, the NAV was 270.5p and the share price 263.0p – a 2.8% discount. For existing holders, a modest discount can be an opportunity if you believe the long-term story and the manager’s alpha generation persist.

Costs and fees: ultra-low ongoing charges, sizeable performance accrual

The ongoing charges figure excluding performance fee was 0.2% for the year – exceptionally low by sector standards. There is no base management fee.

There is, however, a performance fee. It is 30% of outperformance versus the MSCI India IMI over rolling three-year periods, capped at 12% of time-weighted average adjusted net assets for the period. For the current period to 30 June 2027, a provision of £15.954 million has been accrued (the Chairman rounded this to £16.0 million). The Investment Manager has confirmed any crystallised fee will be taken in shares, not cash.

My take: no base fee plus a performance fee aligns incentives, but it can create volatility in reported returns and NAV during tough markets. The cap and the in-shares payment help, but investors should understand how the mechanism works.

Portfolio shape and the push into private companies

The portfolio remains diversified, with a minimum of 50 holdings and sector limits. Top positions at 30 June 2025 included:

• ICICI Bank – 4.4% of net assets
• OneSource Specialty Pharma – 4.4%
• Bharti Airtel – 4.3%
• Bajaj Finserv – 2.9%
• Manjushree Technopack – 2.8%

Unquoted exposure rose to £32.3 million across six companies. Currently, the trust may invest up to 12% of gross assets in unquoted names at the time of investment. The Board proposes to lift this final limit to 15% (subject to shareholder approval at the AGM on 10 December 2025).

What this means: if approved, the team gains more flexibility to back earlier-stage or pre-IPO opportunities in India’s growth sectors. That can enhance returns, but it also increases illiquidity and valuation subjectivity. Given Ashoka’s low base OCF and bottom-up approach, I see this as a sensible, but higher-risk, lever for alpha – as long as position sizing stays disciplined.

Macro backdrop: tariffs risk vs domestic resilience

The report is candid on near-term headwinds: tariff uncertainty following announcements of a 25% tariff on India, plus a 25% penalty linked to energy trade with Russia, and the wider geopolitical backdrop. The team frames this as likely an opening gambit in negotiations.

Crucially, India is a domestically driven economy with relatively low trade intensity. Exports to the US were US$87 billion in FY2025 – about 2% of GDP. The Investment Manager estimates less than 2.0% of MSCI India IMI revenue is directly at tariff risk, while software services exports – around US$100 billion – are outside the scope and the US runs a surplus in services. S&P has upgraded India’s sovereign rating from BBB- to BBB, and inflation is expected at 3% by FY2026-end, giving scope for monetary easing.

None of this removes risk, but it helps explain why the managers remain constructive on India’s structural growth drivers: demographics, digitalisation, formalisation and manufacturing reforms.

What could move the shares next

• AGM vote on raising the unquoted investment limit to 15% of gross assets.
• Tariff negotiations – any de-escalation could buoy sentiment; escalation would likely weigh on cyclicals and exporters.
• Festive season demand and rural trends in India, plus any rate cuts if inflation stays around the 3% path.
• Discount dynamics – the shares moved from a premium to a 2.8% discount by 6 October 2025; buybacks are not flagged, but the redemption facility provides a release valve.

Jargon buster

• NAV: net asset value per share – the portfolio’s value minus liabilities, divided by shares.
• Total return: price or NAV return plus dividends, assuming reinvestment.
• Premium/discount: how the share price compares to NAV. A discount means cheaper than NAV.
• Gross assets: total assets before deducting liabilities. Used for certain limits.

My view: still one of the punchiest India plays on the market

Despite a flat NAV year and a softer post-year-end print, Ashoka’s outperformance, low ongoing charges, FTSE 250 promotion and disciplined portfolio construction stand out. The proposed increase in private company capacity adds a higher-octane element that could widen the opportunity set – with the usual caveats on liquidity and valuation.

Set against tariff noise and geopolitical risk, India’s domestic growth, improving policy framework and corporate profitability story remain intact in this report. For investors seeking concentrated India exposure with an active, alpha-first approach, this remains a compelling choice – and the recent discount adds a little sweetener.