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, New York

 

10036

(Address of principal executive offices)

 

(Zip code)

 

Sara Furber

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

212-296-6963

 

 

Date of fiscal year end:

12/31

 

 

 

 

Date of reporting period:

9/30/10

 

 



 

Item 1.  Schedule of Investments.

 

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

 



 

 

2010 Third Quarter Report

 

 

 

September 30, 2010 (unaudited)

 

Portfolio of Investments

 

MS India Investment Fund, Inc.

 

 

 

Shares

 

Value
(000)

 

Common Stocks (98.0%)

 

 

 

 

 

Airlines (1.3%)

 

 

 

 

 

SpiceJet Ltd. (a)

 

4,994,091

 

$

8,313

 

 

 

 

 

 

 

Auto Components (0.0%)

 

 

 

 

 

Apollo Tyres Ltd.

 

18,750

 

34

 

 

 

 

 

 

 

Automobiles (2.5%)

 

 

 

 

 

Bajaj Auto Ltd.

 

505,000

 

16,519

 

Hero Honda Motors Ltd.

 

1,185

 

49

 

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

 

450,000

 

 

 

 

 

 

16,568

 

Chemicals (2.2%)

 

 

 

 

 

Akzo Nobel India Ltd.

 

25,000

 

516

 

Asian Paints Ltd.

 

118,258

 

7,009

 

Coromandel International Ltd.

 

499,500

 

6,833

 

 

 

 

 

14,358

 

Commercial Banks (20.1%)

 

 

 

 

 

Bank of Baroda

 

469,893

 

9,448

 

HDFC Bank Ltd.

 

964,569

 

53,436

 

ICICI Bank Ltd.

 

551,600

 

13,662

 

IndusInd Bank Ltd.

 

3,645,291

 

21,571

 

Punjab National Bank Ltd.

 

181,000

 

5,782

 

State Bank of India

 

285,902

 

20,617

 

Yes Bank Ltd.

 

1,002,132

 

7,809

 

 

 

 

 

132,325

 

Construction & Engineering (5.1%)

 

 

 

 

 

Gammon India Ltd.

 

2,160,800

 

10,587

 

Hindustan Construction Co.

 

1,560,770

 

2,044

 

Larsen & Toubro Ltd.

 

339,040

 

15,491

 

Voltas Ltd.

 

1,076,227

 

5,844

 

 

 

 

 

33,966

 

Containers & Packaging (0.9%)

 

 

 

 

 

Ess Dee Aluminium Ltd.

 

549,519

 

6,037

 

 

 

 

 

 

 

Diversified Financial Services (4.1%)

 

 

 

 

 

Infrastructure Development Finance Co. Ltd.

 

3,352,860

 

15,128

 

Rural Electrification Corp. Ltd.

 

1,548,977

 

12,134

 

 

 

 

 

27,262

 

Electric Utilities (3.0%)

 

 

 

 

 

KSK Energy Ventures Ltd. (a)

 

2,948,000

 

11,409

 

Reliance Infrastructure Ltd.

 

347,500

 

8,268

 

Torrent Power Ltd.

 

62,120

 

448

 

 

 

 

 

20,125

 

Electronic Equipment, Instruments & Components (1.1%)

 

 

 

 

 

Redington India Ltd.

 

3,615,000

 

7,285

 

 



 

 

2010 Third Quarter Report

 

 

 

September 30, 2010 (unaudited)

 

Portfolio of Investments (cont’d)

 

MS India Investment Fund, Inc.

 

 

 

Shares

 

Value
(000)

 

Food Products (4.2%)

 

 

 

 

 

KS Oils Ltd.

 

4,394,323

 

$

4,743

 

McLeod Russel India Ltd.

 

795,000

 

4,123

 

Nestle India Ltd.

 

160,884

 

12,110

 

Shree Renuka Sugars Ltd.

 

3,474,325

 

6,800

 

 

 

 

 

27,776

 

Independent Power Producers & Energy Traders (1.8%)

 

 

 

 

 

GMR Infrastructure Ltd. (a)

 

6,218,800

 

7,861

 

Jaiprakash Power Ventures Ltd. (a)

 

2,624,000

 

3,720

 

 

 

 

 

11,581

 

Information Technology Services (9.4%)

 

 

 

 

 

Infosys Technologies Ltd.

 

544,621

 

36,973

 

Tata Consultancy Services Ltd.

 

862,761

 

17,797

 

Wipro Ltd.

 

738,513

 

7,387

 

 

 

 

 

62,157

 

Machinery (11.1%)

 

 

 

 

 

AIA Engineering Ltd.

 

951,182

 

8,467

 

Ashok Leyland Ltd.

 

6,220,284

 

9,980

 

Cummins India Ltd.

 

435,000

 

7,123

 

Tata Motors Ltd.

 

1,645,378

 

40,209

 

Thermax Ltd.

 

404,738

 

7,211

 

 

 

 

 

72,990

 

Media (7.2%)

 

 

 

 

 

Deccan Chronicle Holdings Ltd.

 

4,252,924

 

12,304

 

IBN18 Broadcast Ltd. (a)

 

300,542

 

816

 

Sun TV Network Ltd.

 

2,250,368

 

25,992

 

Television Eighteen India Ltd. (a)

 

4,170,972

 

8,498

 

 

 

 

 

47,610

 

Metals & Mining (5.3%)

 

 

 

 

 

Hindalco Industries Ltd.

 

3,680,450

 

16,139

 

Hindustan Zinc Ltd.

 

361,360

 

8,676

 

Usha Martin Ltd.

 

5,223,700

 

10,114

 

 

 

 

 

34,929

 

Multiline Retail (1.2%)

 

 

 

 

 

Future Mall Managment Ltd. (a)(c)

 

33,235

 

179

 

Pantaloon Retail India Ltd.

 

664,719

 

7,751

 

 

 

 

 

7,930

 

Oil, Gas & Consumable Fuels (4.7%)

 

 

 

 

 

Reliance Industries Ltd.

 

1,408,010

 

30,935

 

 



 

 

2010 Third Quarter Report

 

 

 

September 30, 2010 (unaudited)

 

Portfolio of Investments (cont’d)

 

MS India Investment Fund, Inc.

 

 

 

Shares

 

Value
(000)

 

Pharmaceuticals (8.0%)

 

 

 

 

 

Aurobindo Pharma Ltd.

 

373,755

 

$

8,634

 

Dr. Reddy’s Laboratories Ltd.

 

722,907

 

23,194

 

Glenmark Pharmaceuticals Ltd.

 

2,499,500

 

16,673

 

Ranbaxy Laboratories Ltd. (a)

 

372,333

 

4,608

 

 

 

 

 

53,109

 

Real Estate Management & Development (0.9%)

 

 

 

 

 

Phoenix Mills Ltd.

 

1,112,831

 

5,625

 

 

 

 

 

 

 

Tobacco (3.9%)

 

 

 

 

 

ITC Ltd.

 

6,481,400

 

25,718

 

Total Common Stocks (Cost $483,633)

 

 

 

646,633

 

 

 

 

 

 

 

Short-Term Investment (0.4%)

 

 

 

 

 

 

 

 

 

 

 

Investment Company (0.4%)

 

 

 

 

 

Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (d) (Cost $2,653)

 

2,652,734

 

2,653

 

Total Investments (98.4%) (Cost $486,286)

 

 

 

649,286

 

Other Assets in Excess of Liabilities (1.6%)

 

 

 

10,372

 

Net Assets (100.0%)

 

 

 

$

659,658

 

 


(a)                                 Non-income producing security.

(b)                                 At September 30, 2010, the Fund held approximately $0 of fair valued securities, representing 0.0% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund’s Directors.

(c)                                  Security has been deemed illiquid at September 30, 2010.

(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 Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by the Liquidity Fund with respect to assets invested by the Fund in the Liquidity Fund.

 



 

 

2010 Third Quarter Report

 

 

 

September 30, 2010 (unaudited)

 

 

Portfolio of Investments

 

 

 

MS India Investment Fund, Inc.

 

 

Fair Value Measurement Information:

 

The following is a summary of the inputs used to value the Portfolio’s net assets as of September 30, 2010. (See Notes to the Portfolio of Investments for further information regarding fair value measurement.)

 

Investment Type

 

Level 1
Quoted
prices
(000)

 

Level 2
Other
significant
observable
inputs
(000)

 

Level 3
Significant
unobservable
inputs
(000)

 

Total
(000)

 

Common Stocks

 

 

 

 

 

 

 

 

 

Airlines

 

$

8,313

 

$

 

$

 

$

8,313

 

Auto Components

 

 

34

 

 

34

 

Automobiles

 

16,568

 

 

16,568

 

Chemicals

 

14,358

 

 

 

14,358

 

Commercial Banks

 

117,095

 

15,230

 

 

132,325

 

Construction & Engineering

 

33,966

 

 

 

33,966

 

Containers & Packaging

 

6,037

 

 

 

6,037

 

Diversified Financial Services

 

15,128

 

12,134

 

 

27,262

 

Electric Utilities

 

20,125

 

 

 

20,125

 

Electronic Equipment, Instruments & Components

 

7,285

 

 

 

7,285

 

Food Products

 

27,776

 

 

 

27,776

 

Independent Power Producers & Energy Traders

 

11,581

 

 

 

11,581

 

Information Technology Services

 

62,157

 

 

 

62,157

 

Machinery

 

72,990

 

 

 

72,990

 

Media

 

47,610

 

 

 

47,610

 

Metals & Mining

 

34,929

 

 

 

34,929

 

Multiline Retail

 

 

7,930

 

 

7,930

 

Oil, Gas & Consumable Fuels

 

30,935

 

 

 

30,935

 

Pharmaceuticals

 

53,109

 

 

 

53,109

 

Real Estate Management & Development

 

5,625

 

 

 

5,625

 

Tobacco

 

25,718

 

 

 

25,718

 

Total Common Stocks

 

611,305

 

35,328

 

646,633

 

Short-Term Investments

 

 

 

 

 

 

 

 

 

Investment Companies

 

2,653

 

 

 

2,653

 

Total

 

$

613,958

 

$

35,328

 

$

$

649,286

 

 

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of September 30, 2010, securities with a total value of approximately $451,812,000 transferred from Level 2 to Level 1. At December 31, 2009, the fair market value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

 

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

 



 

 

 

Common Stocks (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 9/30/10

 

$

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 9/30/10.

 

$

 

 


†              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 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 securities

 

·                  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 each 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”) determine 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.

 

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

 



 

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.

 

Morgan Stanley India Investment Fund, Inc.

 

/s/ Sara Furber

 

Sara Furber

 

Principal Executive Officer

 

November 16, 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.

 

/s/ Sara Furber

 

Sara Furber

 

Principal Executive Officer

 

November 16, 2010

 

 

 

/s/ Francis Smith

 

Francis Smith

 

Principal Financial Officer

 

November 16, 2010