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:

9/30/09

 

 


 

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

Third Quarter Report

September 30, 2009 (unaudited)

 

 

 

Shares

 

Value
(000)

 

COMMON STOCKS (96.0%)

 

 

 

 

 

(Unless Otherwise Noted)

 

 

 

 

 

Auto Components (0.0%)

 

 

 

 

 

Apollo Tyres Ltd.

 

18,750

 

$

18

 

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

 

450,000

 

—

 

 

 

 

 

18

 

Automobiles (7.5%)

 

 

 

 

 

Hero Honda Motors Ltd.

 

1,054,923

 

36,675

 

 

 

 

 

 

 

Chemicals (1.1%)

 

 

 

 

 

ICI India Ltd.

 

25,000

 

292

 

United Phosphorus Ltd.

 

1,445,532

 

4,984

 

 

 

 

 

5,276

 

Commercial Banks (18.4%)

 

 

 

 

 

Bank of Baroda (b)

 

1,008,893

 

10,209

 

HDFC Bank Ltd.

 

1,349,969

 

46,318

 

ICICI Bank Ltd.

 

913,600

 

17,237

 

IndusInd Bank Ltd.

 

3,308,700

 

7,951

 

State Bank of India Ltd.

 

156,244

 

7,129

 

Union Bank of India (b)

 

264,320

 

1,320

 

 

 

 

 

90,164

 

Construction & Engineering (6.2%)

 

 

 

 

 

Hindustan Construction Co.

 

4,443,700

 

12,120

 

Larsen & Toubro Ltd.

 

523,600

 

18,386

 

 

 

 

 

30,506

 

Containers & Packaging (0.8%)

 

 

 

 

 

Ess Dee Aluminum Ltd. (c)

 

549,519

 

4,091

 

 

 

 

 

 

 

Diversified Financial Services (1.3%)

 

 

 

 

 

Indiabulls Financial Services Ltd.

 

1,586,709

 

6,252

 

 

 

 

 

 

 

Electric Utilities (1.4%)

 

 

 

 

 

NHPC Ltd. (c)

 

6,645,120

 

4,773

 

Torrent Power Ltd.

 

323,258

 

2,140

 

 

 

 

 

6,913

 

Electrical Equipment (7.1%)

 

 

 

 

 

ABB Ltd.

 

292,100

 

4,763

 

Bharat Heavy Electricals Ltd.

 

505,828

 

24,488

 

Jyoti Structures Ltd.

 

1,727,888

 

5,577

 

 

 

 

 

34,828

 

Energy Equipment & Services (1.5%)

 

 

 

 

 

Aban Offshore Ltd.

 

220,700

 

7,313

 

 

 

 

 

 

 

Food Products (3.0%)

 

 

 

 

 

Nestle India Ltd.

 

308,184

 

14,541

 

 

 

 

 

 

 

Household Products (3.6%)

 

 

 

 

 

Hindustan Unilever Ltd.

 

3,279,600

 

17,903

 

 

 

 

 

 

 

Independent Power Producers & Energy Traders (1.8%)

 

 

 

 

 

GVK Power & Infrastructure Ltd. (c)

 

8,969,415

 

8,661

 

 

 

 

 

 

 

Industrial Conglomerates (3.9%)

 

 

 

 

 

Jaiprakash Associates Ltd.

 

3,857,900

 

19,047

 

 

 

 

 

 

 

Information Technology Services (10.7%)

 

 

 

 

 

Infosys Technologies Ltd.

 

773,121

 

37,067

 

Tata Consultancy Services Ltd.

 

771,500

 

9,960

 

Wipro Ltd.

 

434,000

 

5,432

 

 

 

 

 

52,459

 

Media (5.4%)

 

 

 

 

 

Deccan Chronicle Holdings Ltd.

 

4,252,924

 

11,162

 

Sun TV Network Ltd.

 

2,088,500

 

14,232

 

Television Eighteen India Ltd. (b)(c)

 

545,287

 

1,126

 

 

 

 

 

26,520

 

Oil, Gas & Consumable Fuels (7.6%)

 

 

 

 

 

Hindustan Petroleum Corp. Ltd.

 

805,232

 

6,728

 

Reliance Industries Ltd. (c)

 

663,900

 

30,385

 

 

 

 

 

37,113

 

Pharmaceuticals (3.4%)

 

 

 

 

 

Aurobindo Pharma Ltd.

 

397,755

 

6,456

 

Glenmark Pharmaceuticals Ltd.

 

2,032,100

 

10,058

 

 

 

 

 

16,514

 

Real Estate Management & Development (6.9%)

 

 

 

 

 

DLF Ltd.

 

547,000

 

4,980

 

Indiabulls Real Estate Ltd. (c)

 

1,120,400

 

6,330

 

Phoenix Mills Ltd.

 

1,112,831

 

4,126

 

Unitech Ltd.

 

8,131,579

 

18,155

 

 

 

 

 

33,591

 

Software (0.6%)

 

 

 

 

 

Geodesic Ltd.

 

955,459

 

2,767

 

 

 

 

 

 

 

Tobacco (2.0%)

 

 

 

 

 

ITC Ltd.

 

2,037,700

 

9,872

 

 

 

 

 

 

 

Transportation Infrastructure (0.6%)

 

 

 

 

 

Mundra Port and Special Economic Zone Ltd.

 

293,642

 

3,173

 

 

 

 

 

 

 

Wireless Telecommunication Services (1.2%)

 

 

 

 

 

Bharti Airtel Ltd.

 

671,400

 

5,844

 

TOTAL COMMON STOCKS
(Cost $373,078)

 

 

 

470,041

 

 

 

 

 

 

 

 

 

No. of
Rights

 

 

 

RIGHTS (0.0%)

 

 

 

 

 

Media (0.0%)

 

 

 

 

 

Television Eighteen India Ltd., expires 10/13/09 (c) (Cost $—)

 

272,643

 

74

 

 

 

 

 

 

 

 

 

Shares

 

 

 

SHORT-TERM INVESTMENT (1.3%)

 

 

 

 

 

Investment Company (1.3%)

 

 

 

 

 

Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (d)
(Cost $6,550)

 

6,550,077

 

6,550

 

TOTAL INVESTMENTS (97.3%) (Cost $379,628) +

 

 

 

476,665

 

OTHER ASSETS IN EXCESS OF LIABILITIES (2.7%)

 

 

 

13,305

 

NET ASSETS (100%)

 

 

 

$

489,970

 

 

(a)

Security has been deemed illiquid at September 30, 2009.

(b)

At September 30, 2009, the Fund held approximately $12,655,000 of fair valued securities, representing 2.6% 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)

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 September 30, 2009, advisory fees paid were reduced by approximately $6,000 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 approximately $11,000. For the period ended September 30, 2009, the approximate cost of purchases and sales in the Liquidity Fund were $47,421,000 and $76,683,000, respectively.

 


 

Morgan Stanley India Investment Fund, Inc.

Portfolio of Investments

Third Quarter Report

September 30, 2009 (unaudited)

 

+

At September 30, 2009, the U.S. Federal income tax cost basis of investments was approximately $379,628,000 and, accordingly, net unrealized appreciation for U.S. Federal income tax purposes was $97,037,000 of which $114,064,000 related to appreciated securities and $17,027,000 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 September 30, 2009. (See Notes to 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)

 

Assets:

 

 

 

 

 

 

 

 

 

Common Stocks

 

 

 

 

 

 

 

 

 

Auto Components

 

$

18

 

$

—

 

$

—

**

$

18

 

Automobiles

 

36,675

 

—

 

—

 

36,675

 

Chemicals

 

5,276

 

—

 

—

 

5,276

 

Commercial Banks

 

78,635

 

11,529

 

—

 

90,164

 

Construction & Engineering

 

30,506

 

—

 

—

 

30,506

 

Containers & Packaging

 

4,091

 

—

 

—

 

4,091

 

Diversified Financial Services

 

6,252

 

—

 

—

 

6,252

 

Electric Utilities

 

6,913

 

—

 

—

 

6,913

 

Electrical Equipment

 

34,828

 

—

 

—

 

34,828

 

Energy Equipment & Services

 

7,313

 

—

 

—

 

7,313

 

Food Products

 

14,541

 

—

 

—

 

14,541

 

Household Products

 

17,903

 

—

 

—

 

17,903

 

Independent Power Producers & Energy Traders

 

8,661

 

—

 

—

 

8,661

 

Industrial Conglomerates

 

19,047

 

—

 

—

 

19,047

 

Information Technology Services

 

 

52,459

 

 

—

 

 

—

 

 

52,459

 

Media

 

25,394

 

1,126

 

—

 

26,520

 

Oil, Gas & Consumable Fuels

 

37,113

 

—

 

—

 

37,113

 

Pharmaceuticals

 

16,514

 

—

 

—

 

16,514

 

Real Estate Management & Development

 

33,591

 

—

 

—

 

33,591

 

Software

 

2,767

 

—

 

—

 

2,767

 

Tobacco

 

9,872

 

—

 

—

 

9,872

 

Transportation Infrastructure

 

3,173

 

—

 

—

 

3,173

 

Wireless Telecommunication Services

 

5,844

 

—

 

—

 

5,844

 

Total Common Stocks

 

457,386

 

12,655

 

—

**

470,041

 

Rights

 

—

 

74

 

—

 

74

 

Short-Term Investment

 

 

 

 

 

 

 

 

 

Investment Company

 

6,550

 

—

 

—

 

6,550

 

Total Assets

 

463,936

 

12,729

 

—

**

476,665

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

463,936

 

$

12,729

 

$

—

**

$

476,665

 

 

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 12/31/08

 

$

—

**

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 9/30/09

 

$

—

**

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 9/30/09.

 

$

—

 

 

**                    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:

November 19, 2009

 

 

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:

November 19, 2009

 

 

By:

/s/ James Garrett

 

Name:

James Garrett

 

Title:

Principal Financial Officer

 

Date:

November 19, 2009