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)

 

RANDY TAKIAN

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:

3/31/10

 

 


 

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, 2010 (unaudited)

 

 

 

 

 

Value

 

 

 

Shares

 

(000)

 

COMMON STOCKS (94.3%)

 

 

 

 

 

Auto Components (0.0%)

 

 

 

 

 

Apollo Tyres Ltd.

 

18,750

 

$

30

 

 

 

 

 

 

 

Automobiles (3.0%)

 

 

 

 

 

Hero Honda Motors Ltd.

 

388,281

 

16,816

 

Patheja Forgings & Auto Parts Manufacturers Ltd. (a)(b)(c)

 

450,000

 

—

 

 

 

 

 

16,816

 

Chemicals (0.5%)

 

 

 

 

 

Asian Paints Ltd.

 

57,530

 

2,613

 

ICI India Ltd.

 

25,000

 

335

 

 

 

 

 

2,948

 

Commercial Banks (17.0%)

 

 

 

 

 

Bank of Baroda

 

726,893

 

10,347

 

HDFC Bank Ltd.

 

1,116,069

 

48,066

 

ICICI Bank Ltd.

 

658,100

 

13,962

 

IndusInd Bank Ltd.

 

3,308,700

 

12,536

 

Yes Bank Ltd. (c)

 

1,976,132

 

11,277

 

 

 

 

 

96,188

 

Construction & Engineering (6.1%)

 

 

 

 

 

Gammon India Ltd.

 

2,160,800

 

11,332

 

Hindustan Construction Co.

 

2,810,200

 

8,394

 

Larsen & Toubro Ltd.

 

404,540

 

14,696

 

 

 

 

 

34,422

 

Containers & Packaging (0.9%)

 

 

 

 

 

Ess Dee Aluminum Ltd.

 

549,519

 

4,953

 

 

 

 

 

 

 

Diversified Financial Services (1.1%)

 

 

 

 

 

Rural Electrification Corp. Ltd.

 

1,176,430

 

6,568

 

 

 

 

 

 

 

Electric Utilities (4.3%)

 

 

 

 

 

KSK Energy Ventures Ltd. (c)

 

2,948,000

 

12,099

 

NHPC Ltd. (c)

 

7,732,620

 

5,244

 

Torrent Power Ltd.

 

1,127,000

 

7,251

 

 

 

 

 

24,594

 

Electrical Equipment (3.3%)

 

 

 

 

 

Bharat Heavy Electricals Ltd.

 

349,628

 

18,618

 

 

 

 

 

 

 

Food Products (7.5%)

 

 

 

 

 

Balrampur Chini Mills Ltd.

 

1,640,000

 

3,370

 

K.S. Oils Ltd.

 

3,378,300

 

5,098

 

McLeod Russel India Ltd.

 

1,828,000

 

11,016

 

Nestle India Ltd.

 

231,884

 

13,822

 

Shree Renuka Sugars Ltd.

 

5,842,400

 

9,279

 

 

 

 

 

42,585

 

Gas Utilities (2.0%)

 

 

 

 

 

GAIL India Ltd.

 

929,454

 

8,501

 

Guajarat State Petronet Ltd.

 

1,344,667

 

2,628

 

 

 

 

 

11,129

 

Household Products (1.0%)

 

 

 

 

 

Godrej Consumer Products Ltd.

 

1,005,565

 

5,853

 

 

 

 

 

 

 

Information Technology Services (9.4%)

 

 

 

 

 

Infosys Technologies Ltd.

 

592,621

 

34,531

 

Tata Consultancy Services Ltd.

 

696,761

 

12,116

 

Wipro Ltd.

 

443,108

 

6,977

 

 

 

 

 

53,624

 

Machinery (6.6%)

 

 

 

 

 

Ashok Leyland Ltd.

 

7,354,784

 

9,141

 

Tata Motors Ltd.

 

1,669,647

 

28,179

 

 

 

 

 

37,320

 

Media (6.3%)

 

 

 

 

 

Deccan Chronicle Holdings Ltd.

 

4,252,924

 

14,603

 

Sun TV Network Ltd.

 

2,224,253

 

21,204

 

 

 

 

 

35,807

 

Metals & Mining (6.3%)

 

 

 

 

 

Hindalco Industries Ltd.

 

3,680,450

 

14,859

 

Hindustan Zinc Ltd.

 

452,360

 

12,135

 

Usha Martin Ltd.

 

3,900,200

 

8,826

 

 

 

 

 

35,820

 

Oil, Gas & Consumable Fuels (5.4%)

 

 

 

 

 

Reliance Industries Ltd.

 

1,285,010

 

30,748

 

 

 

 

 

 

 

Pharmaceuticals (8.7%)

 

 

 

 

 

Aurobindo Pharma Ltd.

 

452,755

 

9,675

 

Dr. Reddy’s Laboratories Ltd.

 

717,727

 

20,382

 

Glenmark Pharmaceuticals Ltd.

 

2,576,100

 

15,410

 

Ranbaxy Laboratories Ltd. (c)

 

372,333

 

3,943

 

 

 

 

 

49,410

 

Real Estate Management & Development (0.8%)

 

 

 

 

 

Phoenix Mills Ltd.

 

1,112,831

 

4,607

 

 

 

 

 

 

 

Tobacco (3.1%)

 

 

 

 

 

ITC Ltd.

 

2,965,400

 

17,375

 

 

 

 

 

 

 

Transportation Infrastructure (1.0%)

 

 

 

 

 

Mundra Port and Special Economic Zone Ltd.

 

315,642

 

5,551

 

TOTAL COMMON STOCKS
(Cost $424,419)

 

 

 

534,966

 

 

 

 

 

 

 

SHORT-TERM INVESTMENT (0.2%)

 

 

 

 

 

Investment Company (0.2%)

 

 

 

 

 

Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (d) (Cost $992)

 

992,170

 

992

 

TOTAL INVESTMENTS (94.5%) (Cost $425,411) +

 

 

 

535,958

 

OTHER ASSETS IN EXCESS OF LIABILITIES (5.5%)

 

 

 

31,183

 

NET ASSETS (100%)

 

 

 

$

567,141

 

 

(a)

 

Security has been deemed illiquid at March 31, 2010.

(b)

 

At March 31, 2010, the Fund held a fair valued security, valued at $0, representing less than 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund’s Directors.

(c)

 

Non-income producing security.

(d)

 

The Fund invests in the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (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 period ended March 31, 2010, advisory fees paid were reduced by less than $500 relating to the Fund’s investments in the Liquidity Fund. For the same period, income distributions earned by the Fund are recorded as dividends from affiliates and totaled less than $500. For the period ended March 31, 2010, the approximate cost of purchases and sales in the Liquidity Fund were $430,000 and $1,734,000, respectively.

 


 

Morgan Stanley India Investment Fund, Inc.

Portfolio of Investments

First Quarter Report

March 31, 2010 (unaudited)

 

+

 

At March 31, 2010, the U.S. Federal income tax cost basis of investments was approximately $425,411,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was $110,547,000 of which $127,962,000 related to appreciated securities and $17,415,000 related to depreciated securities.

 

Fair Value Measurement Information:

The following is a summary of the inputs used to value the Fund’s net assets as of March 31, 2010. (See Notes to Portfolio of Investments for further information regarding fair value measurement.)

 

 

 

 

 

Level 2

 

 

 

 

 

 

 

 

 

Other

 

Level 3

 

 

 

 

 

Level 1

 

significant

 

Significant

 

 

 

 

 

Quoted

 

observable

 

unobservable

 

 

 

 

 

prices

 

inputs

 

inputs

 

Total

 

Investment Type

 

(000)

 

(000)

 

(000)

 

(000)

 

Assets:

 

 

 

 

 

 

 

 

 

Common Stocks

 

 

 

 

 

 

 

 

 

Auto Components

 

$

30

 

$

—

 

$

—

 

$

30

 

Automobiles

 

16,816

 

—

 

—

**

16,816

 

Chemicals

 

2,948

 

—

 

—

 

2,948

 

Commercial Banks

 

96,188

 

—

 

—

 

96,188

 

Construction & Engineering

 

34,422

 

—

 

—

 

34,422

 

Containers & Packaging

 

4,953

 

—

 

—

 

4,953

 

Diversified Financial Services

 

6,568

 

—

 

—

 

6,568

 

Electric Utilities

 

24,594

 

—

 

—

 

24,594

 

Electrical Equipment

 

18,618

 

—

 

—

 

18,618

 

Food Products

 

42,585

 

—

 

—

 

42,585

 

Gas Utilities

 

11,129

 

—

 

—

 

11,129

 

Household Products

 

5,853

 

—

 

—

 

5,853

 

Information Technology Services

 

53,624

 

—

 

—

 

53,624

 

Machinery

 

37,320

 

—

 

—

 

37,320

 

Media

 

35,807

 

—

 

—

 

35,807

 

Metals & Mining

 

35,820

 

—

 

—

 

35,820

 

Oil, Gas & Consumable Fuels

 

30,748

 

—

 

—

 

30,748

 

Pharmaceuticals

 

49,410

 

—

 

—

 

49,410

 

Real Estate Management & Development

 

4,607

 

—

 

—

 

4,607

 

Tobacco

 

17,375

 

—

 

—

 

17,375

 

Transportation Infrastructure

 

5,551

 

—

 

—

 

5,551

 

Total Common Stocks

 

534,966

 

—

 

—

**

534,966

 

Short-Term Investments

 

 

 

 

 

 

 

 

 

Investment Company

 

992

 

—

 

—

 

992

 

Total Assets

 

535,958

 

—

 

—

**

535,958

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

535,958

 

$

—

 

$

—

**

$

535,958

 

 

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

 

 

 

Common

 

 

 

Stock

 

 

 

(000)

 

Balance as of 12/31/09

 

$

—

**

Accrued discounts/premiums

 

—

 

Realized gain (loss)

 

—

 

Change in unrealized appreciation (depreciation)

 

—

 

Net purchases (sales)

 

—

 

Transfers in for Level 3

 

—

 

Transfers out of Level 3

 

—

 

Balance as of 3/31/10

 

$

—

**

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at Level 3 at 3/31/10.

 

$

—

 

 

** Includes a security which is valued at zero.

 


 

Notes to Portfolio of Investments (unaudited)

 

In accordance with FASB ASC 820 “Fair Value Measurements and Disclosure” (“ASC 820”) (formerly known as 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. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing 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 valuing 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 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.

 

Security Valuation: Securities listed on a foreign exchange are valued at their closing price except as noted below. 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, unless the Board of Directors (the “Directors”) determines such valuation does not reflect the securities’ market value, in which case these securities will be valued at their fair value as determined by the Directors.

 

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 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/ Randy Takian

 

Name:

Randy Takian

 

Title:

Principal Executive Officer

 

Date:

May 17, 2010

 

 

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/ Randy Takian

 

Name:

Randy Takian

 

Title:

Principal Executive Officer

 

Date:

May 17, 2010

 

 

By:

/s/ Frank Smith

 

Name:

Frank Smith

 

Title:

Principal Financial Officer

 

Date:

May 17, 2010