[Annotated Form N-Q]

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

 

 

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-08238

 

MORGAN STANLEY INDIA INVESTMENT FUND, INC.

(Exact name of registrant as specified in charter)

522 FIFTH AVENUE, NEW YORK, NY

10036

(Address of principal executive offices)

(Zip code)

RONALD E. ROBISON
522 FIFTH AVENUE, NEW YORK, NY 10036

(Name and address of agent for service)

 

 

 

Registrant’s telephone number, including area code:

1-800-231-2608

 

 

Date of fiscal year end:

12/31

 

 

Date of reporting period:

3/31/08

 

 


 

Item 1.  Schedule of Investments.

 

The Fund’s schedule of investment as of the close of the reporting period prepared pursuant to Rule 12-12 Regulation S-X is as follows:

 


 

Morgan Stanley India Investment Fund, Inc.

Portfolio of Investments

First Quarter Report

March 31, 2008 (unaudited)

 

 

 

Shares

 

Value
(000)

 

COMMON STOCKS (97.3%)

 

 

 

 

 

(Unless Otherwise Noted)

 

 

 

 

 

Auto Components (0.7%)

 

 

 

 

 

Apollo Tyres Ltd.

 

(a)18,750

 

$

19

 

Balkrishna Industries Ltd.

 

(a)433,092

 

5,888

 

Patheja Forgings & Auto Parts Matufacturers Ltd.

 

(a)(b)(c)450,000

 

—

 

 

 

 

 

5,907

 

Automobiles (2.4%)

 

 

 

 

 

Hero Honda Motors Ltd.

 

1,185

 

21

 

Maruti Suzuki India Ltd.

 

928,700

 

19,171

 

 

 

 

 

19,192

 

Biotechnology (1.1%)

 

 

 

 

 

Biocon Ltd.

 

834,593

 

9,006

 

Chemicals (0.7%)

 

 

 

 

 

Gujarat Fluorochemicals

 

1,065,433

 

4,847

 

ICI India Ltd.

 

25,000

 

412

 

 

 

 

 

5,259

 

Commercial Banks (11.2%)

 

 

 

 

 

Axis Bank Ltd.

 

1,508,700

 

29,881

 

HDFC Bank Ltd.

 

1,464,969

 

48,483

 

HDFC Bank Ltd. ADR

 

48,000

 

4,715

 

State Bank of India Ltd. GDR

 

79,000

 

6,997

 

 

 

 

 

90,076

 

Construction & Engineering (6.2%)

 

 

 

 

 

Jaiprakash Associates Ltd.

 

1,327,500

 

7,516

 

Larsen & Toubro Ltd.

 

435,900

 

33,131

 

Madhucon Projects Ltd.

 

750,045

 

9,579

 

 

 

 

 

50,226

 

Construction Materials (1.8%)

 

 

 

 

 

India Cements Ltd.

 

1,469,184

 

6,853

 

Shree Cement Ltd.

 

(a)280,370

 

7,678

 

 

 

 

 

14,531

 

Containers & Packaging (1.7%)

 

 

 

 

 

Ess Dee Aluminium Ltd.

 

(c)310,519

 

4,161

 

Ess Dee Aluminium Ltd. (Pre-preferential)

 

(b)(c)775,000

 

9,608

 

 

 

 

 

13,769

 

Diversified Financial Services (1.9%)

 

 

 

 

 

Infrastructure Development Finance Co., Ltd.

 

2,708,500

 

10,241

 

Kotak Mahindra Bank Ltd.

 

307,400

 

4,827

 

 

 

 

 

15,068

 

Electric Utilities (2.7%)

 

 

 

 

 

Tata Power Co., Ltd.

 

742,700

 

21,819

 

Electrical Equipment (10.7%)

 

 

 

 

 

ABB Ltd.

 

1,295,179

 

38,292

 

Bharat Heavy Electricals Ltd.

 

716,828

 

37,005

 

Jyoti Structures Ltd.

 

2,685,140

 

10,716

 

 

 

 

 

86,013

 

Energy Equipment & Services (3.8%)

 

 

 

 

 

Aban Offshore Ltd.

 

409,435

 

30,940

 

Food Products (2.5%)

 

 

 

 

 

Nestle India Ltd.

 

548,184

 

20,491

 

Household Products (2.2%)

 

 

 

 

 

Hindustan Unilever Ltd.

 

3,030,100

 

17,412

 

Independent Power Producers & Energy Traders (1.1%)

 

 

 

 

 

GVK Power & Infrastructure Ltd.

 

(a)5,634,800

 

5,668

 

Reliance Power Ltd.

 

(a)404,000

 

3,202

 

 

 

 

 

8,870

 

Information Technology Services (3.1%)

 

 

 

 

 

Infosys Technologies Ltd.

 

702,000

 

25,288

 

Machinery (1.3%)

 

 

 

 

 

Praj Industries Ltd.

 

3,078,300

 

10,517

 

 


 

Media (7.1%)

 

 

 

 

 

Deccan Chronicle Holdings Ltd.

 

5,414,230

 

21,882

 

New Delhi Television Ltd.

 

833,250

 

8,049

 

Television Eighteen India Ltd.

 

(b)1,262,636

 

14,925

 

Zee Entertainment Enterprises Ltd.

 

2,074,700

 

12,779

 

 

 

 

 

57,635

 

Metals & Mining (5.9%)

 

 

 

 

 

Hindustan Zinc Ltd.

 

307,000

 

4,025

 

Jindal Steel & Power Ltd.

 

231,903

 

12,001

 

National Aluminum Co., Ltd.

 

345,000

 

3,911

 

Steel Authority of India Ltd.

 

1,494,900

 

6,945

 

Welspun-Gujarat Stahl Ltd.

 

2,189,000

 

21,036

 

 

 

 

 

47,918

 

Multiline Retail (2.0%)

 

 

 

 

 

Pantaloon Retail India Ltd.

 

(b)1,384,699

 

16,526

 

Oil & Gas Refining & Marketing (7.3%)

 

 

 

 

 

Reliance Industries Ltd.

 

(a)1,044,500

 

59,188

 

Oil, Gas & Consumable Fuels (3.1%)

 

 

 

 

 

Cairn India Ltd.

 

(a)2,639,100

 

14,820

 

Oil & Natural Gas Corp., Ltd.

 

435,100

 

10,653

 

 

 

 

 

25,473

 

Personal Products (1.7%)

 

 

 

 

 

Marico Ltd.

 

8,288,136

 

14,020

 

Pharmaceuticals (2.4%)

 

 

 

 

 

Glenmark Pharmaceuticals Ltd.

 

1,556,173

 

18,996

 

Real Estate (2.5%)

 

 

 

 

 

Housing Development & Infrastructure Ltd.

 

536,900

 

8,854

 

Phoenix Mills Ltd.

 

1,185,493

 

11,201

 

 

 

 

 

20,055

 

Software (1.9%)

 

 

 

 

 

Geodesic Information Systems Ltd.

 

3,343,481

 

15,070

 

Thrifts & Mortgage Finance (3.0%)

 

 

 

 

 

Housing Development Finance Corp.

 

412,800

 

24,610

 

Transportation Infrastructure (0.9%)

 

 

 

 

 

Mundra Port and Special Economic Zone Ltd.

 

(a)483,805

 

7,016

 

Wireless Telecommunication Services (4.4%)

 

 

 

 

 

Bharti Airtel Ltd.

 

(a)1,238,000

 

25,607

 

Reliance Communications Ltd.

 

749,400

 

9,540

 

 

 

 

 

35,147

 

TOTAL COMMON STOCKS (Cost $604,995)

 

 

 

786,038

 

SHORT-TERM INVESTMENT (0.2%)

 

 

 

 

 

Investment Company (0.2%)

 

 

 

 

 

Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class (Cost $1,546)

 

(d)1,546,069

 

1,546

 

TOTAL INVESTMENTS + (97.5%) (Cost $606,541)

 

 

 

(e)787,584

 

OTHER ASSETS IN EXCESS OF LIABILITIES (2.5%)

 

 

 

20,365

 

NET ASSETS (100%)

 

 

 

$

807,949

 

 

 

(a)

 

Non-income producing security.

 

(b)

 

Security was valued at fair value — At March 31, 2008, the Fund held $41,059,000 of fair valued securities, representing 5.1% of net assets.

 

(c)

 

Security has been deemed illiquid at March 31, 2008.

 

(d)

 

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Money Market Portfolio (the “Liquidity Fund”), an open-end management investment company managed by the Adviser. Investment Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Fund. For the three months ended March 31, 2008, advisory fees paid were reduced by approximately $2,000 relating to the Fund’s investment in the Liquidity Fund. For the same period, income distributions earned by the Fund are recorded as dividends from affiliates and totaled approximately $101,000. During the three months ended March 31, 2008, the approximate cost of purchases and sales in the Liquidity Fund were $64,321,000 and $242,270,000, respectively.

 

(e)

 

The approximate market value and percentage of the investments, $781,323,000 and 99.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments.

 

ADR

 

American Depositary Receipt

 

GDR

 

Global Depositary Receipt

 

+

 

At March 31, 2008, the U.S. Federal income tax cost basis of investments was approximately $606,541,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was $181,043,000 of which $234,717,000 related to appreciated securities and $53,674,000 related to depreciated securities.

 


 

Notes to Portfolio of Investments (unaudited)

 

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”), effective January 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.

 

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

The following is a summary of the inputs used as of March 31, 2008 in valuing the Fund’s investments carried at value:

 

Valuation Inputs

 

Investments in
Securities
(000)

 

Other Financial
Instruments*
(000)

 

Level 1 - Quoted Prices

 

$

4,715

 

$

—

 

Level 2 - Other Significant Observable Inputs

 

782,869

 

—

 

Level 3 - Significant Unobservable Inputs

 

—

 

—

 

Total

 

$

787,584

 

$

—

 

 

*Other financial instruments include futures, forwards and swap contracts.

 

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

 

 

 

Investments in
Securities
(000)

 

Other Financial
Instruments
(000)

 

Balance as of 12/31/07

 

$

—

 

$

—

 

Accrued discounts/premiums

 

—

 

—

 

Realized gain (loss)

 

—

 

—

 

Change in unrealized appreciation (depreciation)

 

—

 

—

 

Net purchases (sales)

 

—

 

—

 

Net transfers in and/or out of Level 3

 

—

 

—

 

Balance as of 3/31/08

 

$

—

 

$

—

 

The amount of total realized gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at 3/31/08

 

$

—

 

$

—

 

 

Security Valuation — Securities listed on a foreign exchange are valued at their closing price. Unlisted securities and listed securities not traded on the valuation date for which market quotations are readily available are valued at the mean between the current bid and asked prices obtained from reputable brokers. Equity securities listed on a U.S. exchange are valued at the latest quoted sales price on the valuation date. Equity securities listed or traded on NASDAQ, for which market quotations are available, are valued at the NASDAQ Official Closing Price. Debt securities purchased with remaining maturities of 60 days or less are valued at amortized cost, if it approximates market value.

 

All other securities and investments for which market values are not readily available, including restricted securities, and those securities for which it is inappropriate to determine prices in accordance with the aforementioned procedures, are valued at fair value as determined in good faith under procedures adopted by the Board of Directors (the “Directors”), although the actual calculations may be done by others. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the

 


 

issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

 

Most foreign markets close before the New York Stock Exchange (“NYSE”). Occasionally, developments that could affect the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If these developments are expected to materially affect the value of the securities, the valuations may be adjusted to reflect the estimated fair value as of the close of the NYSE, as determined in good faith under procedures established by the Directors.

 


 

Item 2.  Controls and Procedures.

 

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

 

(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

 

Item 3.  Exhibits.

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)

Morgan Stanley India Investment Fund, Inc.

 

By:

/s/ Ronald E. Robison

 

Name:

Ronald E. Robison

 

Title:

Principal Executive Officer

 

Date:

May 20, 2008

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:

/s/ Ronald E. Robison

 

Name:

Ronald E. Robison

 

Title:

Principal Executive Officer

 

Date:

May 20, 2008

 

 

 

 

By:

/s/ James Garrett

 

Name:

James Garrett

 

Title:

Principal Financial Officer

 

Date:

May 20, 2008