<PAGE>
MORGAN STANLEY
INDIA INVESTMENT FUND, INC.
- ---------------------------------------------
OFFICERS AND DIRECTORS
<TABLE>
<S> <C>
Barton M. Biggs James W. Grisham
CHAIRMAN OF THE BOARD VICE PRESIDENT
OF DIRECTORS Harold J. Schaaff, Jr.
Warren J. Olsen VICE PRESIDENT
PRESIDENT AND DIRECTOR Joseph P. Stadler
John Chu VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Gerard la Hausse de Louviere SECRETARY
DIRECTOR James R. Rooney
Gerard E. Jones TREASURER
DIRECTOR Joanna M. Haigney
John A. Levin ASSISTANT TREASURER
DIRECTOR
Fergus Reid
DIRECTOR
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company (International)
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank, N.A. (Domestic)
770 Broadway
New York, New York 10003
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
------------------------
MORGAN STANLEY
INDIA INVESTMENT
FUND, INC.
---------------------
FIRST QUARTER REPORT
MARCH 31, 1996
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- --------
For the three months ended March 31, 1996, the Fund's total return, based on a
net asset value per share, was 16.39% compared to 11.63% for the U.S. dollar
adjusted Bombay Stock Exchange Sensitive Index. For the period since the Fund's
commencement of operations on February 25, 1994 through March 31, 1996, the
Fund's total return based on net asset value per share is -25.34% compared with
- -27.06% for the BSE Sensitive Index. On March 29, 1996, the closing price of the
Fund's shares on the New York Stock Exchange was $11 1/8, representing a 7.3%
premium to the net asset value per share.
The Indian market performed reasonably well for the first quarter. The market
went up by 12.9% (BSE National in dollars) and was one of the better performing
markets in Asia.
We remain positive on the outlook for the Indian market for the rest of 1996. We
base our optimism on a combination of earnings growth and a market re-rating.
The India corporate sector's earnings had compounded growth of 41% over the last
three years. While this blistering pace cannot be sustained we still expect EPS
growth of 25%-30% for 96-97.
The Indian market was de-rated from a P/E of 16-18 times eighteen months ago, to
10 times currently. The derating has happened for basically two reasons: a)
extremely high real interest rates caused domestic investors to move away from
equities and b) the risk premium foreigners attached to India increased as
political uncertainity associated with the reform program increased. We feel
that both of these factors are now set to unwind. Real interest rates have
peaked and domestic liquidity has already begun to improve. The new credit
policy announced by the Indian central bank has a definite bias towards easing
monetary policy and has only strengthened our conviction that interest rates are
headed lower. Post election (due in the first week of May 1996) we feel the
reform program will continue irrespective of the party in power and this should
reduce the uncertainity surrounding Indian politics, reforms, etc.
Most Asian countries trade at current P/E's in excess of 15, while India is at
10. Even if India were to close this gap marginally, strong market performance
should result.
Foreign portfolio flows have been very strong exceeding $2 billion this quarter.
Our expectation is that foreign flows will remain strong going forward as more
institutions seeing India's strong first quarter performance build up neutral or
overweight positions.
The Fund is nearly fully invested and the mid-cap growth orientation of the
portfolio should begin to pay off as the market rally continues.
Sincerely,
[SIGNATURE]
Warren J. Olsen
PRESIDENT AND DIRECTOR
[SIGNATURE]
Vinod Sethi
PORTFOLIO MANAGER
April 17, 1996
2
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Investment Summary as of March 31, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION (UNAUDITED)
TOTAL RETURN (%)
--------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (1)(3)
------------------------ ----------------------- -----------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C>
------------------------ ----------------------- -----------------------
FISCAL YEAR TO DATE 21.92% -- 16.39% -- 11.63% --
ONE YEAR 5.95 5.95% -11.37 -11.37% -4.35 -4.35%
SINCE INCEPTION* -19.91 -10.05 -25.34 -13.01 -27.06 -13.97
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31: THREE MONTHS ENDED
1994* 1995 MARCH 31, 1996 (UNAUDITED)
<S> <C> <C> <C>
Net Asset Value Per Share $13.99 $8.91 $10.37
Market Value Per Share $11.25 $9.13 $11.13
Premium/(Discount) -19.6% 2.5% 7.3%
Capital Gains Distributions $0.17 - -
Fund Total Return (2) 0.72% -36.31% 16.39%
Index Total Return (1)(3)** -8.03% -28.96% 11.63%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) US dollar adjusted Bombay Stock Exchange (BSE) Sensitive Index.
* The Fund commenced operations on February 25, 1994.
** Unaudited.
3
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Portfolio Summary as of March 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES 0.5%
<S> <C>
Equity Securities 96.9%
Short-Term Investments 2.6%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Automobiles 14.2%
Banking 4.7%
Building Materials & Components 5.2%
Chemicals 4.8%
Energy Equipment & Services 10.6%
Financial Services 7.1%
Health & Personal Care 6.3%
Machinery & Engineering 5.3%
Telecommunications 5.1%
Textiles & Apparel 6.6%
Other 30.1%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
1. Bharat Heavy Electricals 6.7%
2. Housing Development Finance 5.9
Corp.
3. State Bank of India 3.9
4. Mahanagar Telephone Nigam 3.7
5. Tata Engineering & Locomotive 3.4
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
6. Hindalco Industries Ltd. 2.5%
7. Container Corp. of India 2.5
8. Raymond Ltd. 2.2
9. Crompton Greaves Ltd. 2.2
10. Madras Cements 1.9
---
34.9%
---
---
</TABLE>
4
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
INDIAN COMMON STOCKS (96.3%)
(Unless otherwise noted)
- --------------------------------------------------
- ----------
APPLIANCES & HOUSEHOLD DURABLES (2.0%)
Bharat Pipes & Fittings Ltd. 522,020 U.S.$ 119
Blow Plast Ltd. 227,100 1,132
IFB Industries Ltd. 400 1
Kelvinator 105,550 289
Kunstoffe Industries -- New 183,600 54
Onida Savak Ltd. 755 --
Peico Electronics & Electric 712,150 2,976
Punjab Anand Lamp Industries Ltd. 227,000 206
Salora International Ltd. 207,700 231
Supreme Industries Ltd. 170,000 1,795
Symphony Comfort Systems 7,700 9
TVS Whirlpool Ltd. 200,000 132
VIP Industries 161,900 356
------------
7,300
------------
- -----------------------------------------------------------------
- -------------
AUTOMOBILES (14.2%)
Apollo Tyres Ltd. 359,900 1,889
Apollo Tyres Ltd. (Rights) 245 --
Apollo Tyres Ltd. (Warrants) 141,859 220
Ashok Leyland 370,620 1,359
Autolec Industries 241,045 680
Autolite Ltd. 132,670 817
Ceat Tyres Ltd. 473,547 1,111
Engine Values Ltd. 19,050 341
Escorts Ltd. 121,050 422
Escorts Tractors Ltd. 100 --
Harig Crankshafts Ltd. 195,400 49
Hero Honda 169,308 1,440
Hitech Gears 94,000 168
Invel Transmissions 400 1
Invel Transmissions (Rights) 500 --
Jay Bharat Maruti 92,800 156
LML Ltd. 186,000 458
Lumax Automatic Parts Industries 299,200 1,158
Mahindra & Mahindra Ltd. 1,060 8
Modi Rubber Ltd. 550 1
Motherson Sumi 58,738 202
Motherson Sumi Systems Ltd. 165,200 569
Motherson Sumi Systems Ltd.
(Rights) 120 --
Motor Industries Co. Ltd. 33,915 6,490
MRF Ltd. 68,650 5,234
Nippondenso India Ltd. 648,200 2,091
O.E.N. Connectors Ltd. 177,526 187
Pan Auto Ltd. 300,000 68
Premier Instruments Ltd. 245,987 1,450
Rane Madras Ltd. 130,300 1,376
Rico Auto Industries Ltd. 221,000 881
S.K.F. Bearings Ltd. 16,500 1,432
Sona Steering System 12,500 27
Subros Auto Ltd. 98,000 302
Subros Auto Ltd. -- New 61,395 189
Sundaram Abex Ltd. 24,700 170
Sundaram Brake 2,850 20
Sundaram Brake (Warrants) 2,850 --
Sundaram Fasteners Ltd. 229,300 4,438
Sundaram Fasteners Ltd. -- New 194,200 3,759
Swaraj Engines Ltd. 45,000 435
Tata Engineering & Locomotive 946,983 12,663
VST Tillers & Tractors -- New 173,000 355
------------
52,616
------------
- -----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
BANKING (4.7%)
Federal Bank Ltd. 253,000 U.S.$ 1,469
Federal Bank Ltd. (Rights) 126,500 734
Oriental Bank of Commerce 301,400 588
State Bank of India 2,089,120 14,566
------------
17,357
------------
- -----------------------------------------------------------------
- -------------
BEVERAGES & TOBACCO (0.5%)
ITC Ltd. 223,900 1,504
McDowell & Co. 227,950 159
United Breweries 100 --
------------
1,663
------------
- -----------------------------------------------------------------
- -------------
BROADCASTING & PUBLISHING (1.4%)
Control Print (India) Ltd. 27,500 12
Navneet Publications 155,400 991
New Delhi Television 66,660 1,320
Srishti Videocorp -- New 225,000 181
Tata Press 137,050 1,186
Zee Telefilms Ltd. 371,400 1,394
------------
5,084
------------
- -----------------------------------------------------------------
- -------------
BUILDING MATERIALS & COMPONENTS (5.2%)
Associated Cement Co., Ltd. 56,618 6,309
Bell Ceramics Ltd. 170,875 98
Bell Ceramics Ltd. -- New 254,770 146
Bell Ceramics Ltd. (Rights) 1,537 --
Dalmia Cement 124,950 931
Gujarat Sidhee Cement Ltd. 2,500,000 825
India Cements Ltd. GDR 85,000 467
ITW Signode India Ltd. 474,950 1,595
Madras Cements 21,665 6,989
Murudeshwar Ceramics Ltd. 346,700 813
Mysore Cements Ltd. 300 --
Orissa Cement 86,660 559
Priyadarshini Cement Ltd. 240,750 217
Shree Cements 224,050 332
Somani Cement Co., Ltd. 200,000 116
------------
19,397
------------
- -----------------------------------------------------------------
- -------------
BUSINESS & PUBLIC SERVICES (0.0%)
Elbee Services Ltd. 11,200 40
------------
- -----------------------------------------------------------------
- -------------
CHEMICALS (4.7%)
Asian Paints Ltd. 235,980 2,370
Atul Products Ltd. 255,471 450
Atul Products Ltd. -- New 90,000 158
Chemox Chemicals 250,000 337
Chemplast Sanmar Ltd. 'B' 100,000 422
Colour Chem Ltd. 13,645 1,320
Goodlass Nerolac Paints Ltd. 150 1
Gujarat Narmada Valley Fertilizers
Ltd. 477,400 735
Gujarat Narmada Valley Fertilizers
Ltd. GDR 212,000 1,511
Hindustan Organic Chemicals 315,000 312
ICI India Ltd. 386,600 1,837
Indian Dyestuff Industries Ltd. 132,745 90
Indian Organic Chemical Ltd. 732,500 677
Indian Petro Chemical Corp. 611,400 2,779
Indian Petro Chemical Corp. GDR 22,000 347
Indo Gulf Fertilizer &
Chemical -- New 3,300 5
ITC Agrotech Co. 95,800 131
ITC Agrotech Co. (Rights) 95,800 --
- -----------------------------------------------------------------
- -------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
CHEMICALS (CONTINUED)
Jayant Agro 83,400 U.S.$ 208
Jaysynth Dyechem Ltd. 340,500 699
Metrochem Industries Ltd. 150,700 264
National Organic Chemical
Industries 18,200 20
Reliance Industries Ltd. 49,022 299
Sudarsha Chemicals 234,995 2,309
Tainwala Chemicals & Plastics 51,209 26
Tamil Nadu Petrochemicals 1,600 1
------------
17,308
------------
- -----------------------------------------------------------------
- -------------
CONSTRUCTION & HOUSING (0.5%)
Hindustan Construction 350,000 621
Hindustan Sanitaryware 70,000 382
Nagarjuna Construction 156,100 732
Nagarjuna Construction (Rights) 97,562 --
------------
1,735
------------
- -----------------------------------------------------------------
- -------------
ELECTRICAL & ELECTRONICS (1.4%)
AKG Acoustics (India) Ltd. 81,300 57
Asian Electronics Ltd. 153,000 2,244
Bajaj Electricals Ltd. 111,400 1,519
BPL Ltd. 670,500 1,286
Centrum Electronics 200,000 38
------------
5,144
------------
- -----------------------------------------------------------------
- -------------
ELECTRONIC COMPONENTS & INSTRUMENTS (3.0%)
Fujitsu ICIM 536,750 535
Infosys Technology Ltd. 240,200 3,452
Mastek Ltd. 126,400 852
Modi Xerox Ltd. 778,550 4,338
Rolta India Ltd. 1,406,200 660
Samtel Colour 648,350 913
Satyam Computer 125,000 200
Vikas Hybrids & Electronics Ltd. 175 --
------------
10,950
------------
- -----------------------------------------------------------------
- -------------
ENERGY EQUIPMENT & SERVICES (10.6%)
Bharat Heavy Electricals 7,000,000 24,890
Crompton Greaves Ltd. 1,213,830 8,045
Datar Switchgear Ltd. 140,200 658
Jyoti Structure Ltd. 148,250 826
KEC International Ltd. 345,400 1,139
Kirloskar Oil Engine 380,750 1,396
Modern Malleables Ltd. 420,000 533
Shiram Honda Power Equipment 302,965 1,297
Uniflex Cables Ltd. 137,700 149
Uniflex Cables Ltd. -- New 149,700 163
------------
39,096
------------
- -----------------------------------------------------------------
- -------------
FINANCIAL SERVICES (7.1%)
Canfin Homes Ltd. 1,011,050 623
Housing Development Finance
Corp. 229,778 21,832
ICICI 3,831 11
ICICI -- New 11,333 31
Industrial Finance Corp India 1,274,800 1,589
SCICI 5,200 7
SCICI -- New 93,250 124
Sundaram Finance 150 1
UTI Master Gain 4,273,800 1,404
UTI Master Shares Ltd. 1,619,800 632
UTI Master Shares Ltd. -- New 323,200 126
------------
26,380
------------
- -----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
FOOD & HOUSEHOLD PRODUCTS (0.8%)
American Dry Fruits 538,500 U.S.$ 426
Aruna Sugars & Enterprises 12,350 8
Brooke Bond Lipton 650 6
Dhampur Sugar Mills Ltd. 200,000 675
Sakthi Sugar Ltd. 164,665 188
Satnan Overseas Ltd. 600 1
Thiru Arooran Sugars 264,500 1,047
Umred Agro Complex Ltd. 124,500 22
Vadilal Industries Ltd. 250,000 176
Western Hatcheries 237,933 454
------------
3,003
------------
- -----------------------------------------------------------------
- -------------
FOREST PRODUCTS & PAPER (2.3%)
Andrah Paper 19,610 1,035
Ballarpur Industries Ltd. 1,126,154 5,945
Paper Products Ltd. 48,900 179
Paper Products Ltd. -- New 170,000 608
Pudumjee 221,600 650
------------
8,417
------------
- -----------------------------------------------------------------
- -------------
HEALTH & PERSONAL CARE (6.3%)
Apollo Hospitals Enterprises Ltd. 500,000 484
Cipla Ltd. 62,700 712
Crossland Research Labs Ltd. 190,000 2,892
E. Merck (India) Ltd. 406,400 2,264
Godrej Soaps -- New 606,650 1,206
Hoechst India Ltd. 490,000 3,621
Hoechst Schering Agrevo Ltd. 201,900 2,487
Indian Shaving 196,700 1,125
Lakme Ltd. 144,900 1,045
Nicholas Piramal India Ltd. 105,000 885
Pfizer Ltd. 66,450 378
Ranbaxy Labs Ltd. (Warrants) 40,000 630
Sandoz (India) Ltd. 25,000 275
Searle (India) Ltd. 300,000 933
Sol Pharma 4,500 10
Sun Pharmaceutical 371,600 2,921
TTK Biomed Ltd. 143,700 164
Unichem Labs Ltd. 162,700 1,288
------------
23,320
------------
- -----------------------------------------------------------------
- -------------
INDUSTRIAL COMPONENTS (1.7%)
BOC India Ltd. 331,500 948
Carborondum Universal 373,300 1,752
Chicago Pneumatic India Ltd. 257,850 1,588
Punjab Tractors Ltd. 142,900 2,074
------------
6,362
------------
- -----------------------------------------------------------------
- -------------
LEISURE & TOURISM (0.5%)
Asian Hotels Ltd. 84,850 715
ITC Hotels Ltd. 150,000 818
Indian Hotels Co. 50 1
Kamata Hotels India Ltd. 300,000 251
------------
1,785
------------
- -----------------------------------------------------------------
- -------------
MACHINERY & ENGINEERING (5.2%)
Advani-Oerlikon Ltd. 132,500 651
Ahmednagar Forgings Ltd. 83,000 207
Ahmednagar Forgings, Ltd. -- New 83,100 207
Artson Engineering Ltd. 204,293 123
Bharat Forge Co. Ltd. 570,918 2,469
Esab India Ltd. 564,300 1,208
Graphite India Ltd. 272,500 909
Indian Seamless Metal Tubes 374,900 769
Kabra Extrusion Technik Ltd. 153,000 437
Lakshmi Machine Works Ltd. 9,265 3,070
Lakshmi Synthetic Machinery 152,400 358
M.M. Forgings Ltd. 29,700 68
- -----------------------------------------------------------------
- -------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
MACHINERY & ENGINEERING (CONTINUED)
Praj Industries Ltd. 153,200 U.S.$ 539
Revathi-CP Equipment Ltd. 55,650 816
Thermax Ltd. 472,700 4,575
Wartsila Diesel Ltd. 429,500 2,998
------------
19,404
------------
- -----------------------------------------------------------------
- -------------
METALS -- NON-FERROUS (2.7%)
Hindalco Industries Ltd. 281,850 9,423
Pennar Aluminum Co. 1,632,800 754
------------
10,177
------------
- -----------------------------------------------------------------
- -------------
METALS -- STEEL (1.6%)
India Seamless Steel & Alloy 905,800 173
Isibars Ltd. 500,000 1,070
Mukand Iron & Steel Works 199,091 946
Panchmahal Steels Ltd. 197,700 319
Sesa Goa Ltd. 58,120 682
Sesa Goa Ltd. -- New 29,864 350
Sesa Goa Ltd. (Rights) 10 --
Shri Ishar Alloy Steels 369,500 238
Special Steels Ltd. 62,550 215
Tata Iron & Steel Co. Ltd. 268,667 1,560
Uttam Galva Steels Ltd. 653,600 326
------------
5,879
------------
- -----------------------------------------------------------------
- -------------
MISCELLANEOUS MATERIALS & COMMODITIES (1.7%)
Alpha Geo Ltd. 82,800 36
Control Print (India) Ltd. 75,000 32
Cosmo Films Ltd. 209,900 788
Essel Packaging Ltd. 367,900 2,309
Flex Industries 16,618 67
Flex Industries (Rights) 9,542 --
Flex Industries (Warrants) 53,939 201
Garware Plastics & Polyester 377 2
Garware Plastics & Polyester -- New 397,412 2,447
Kitply Industries Ltd. 205 --
Pearl Polymers Ltd. 338,300 407
PVD Plastic Mouldings Industries 152,400 74
Sharp Industries 17,800 8
Shrenujur Co. Diamond 50 --
Su-Raj Diamonds (Warrants) 31,900 --
Uniworth International Ltd. 700 --
Vesuvius (India) Ltd. 20,000 24
Vippy Solvex Products Ltd. 250,000 81
------------
6,476
------------
- -----------------------------------------------------------------
- -------------
MULTI-INDUSTRY (3.1%)
APR Ltd. (Rights) 117,649 --
E.I.D. Parry Ltd. GDR 94,320 307
Grasim Industries Ltd. 227,205 3,731
Indian Rayon & Industries Ltd. 760 10
Indian Rayon & Industries Ltd. GDS 50,000 775
Indian Rayon & Industries Ltd.
GDS -- New 8,900 136
Kothari Sugars & Chemicals 191,700 152
Larsen & Toubro 2,150 15
Ramco 113,800 3,037
S & S Industries & Enterprises
Ltd. 597,340 236
S & S Power Switchgear Ltd. 226,105 1,194
Shriram Industrial Enterprises
Ltd.
GDR (Warrants) 34,000 3
SKS Ltd. 100,000 39
Standard Industries Ltd. 121,366 75
Straw Products Ltd. 382,483 1,346
VXL Ltd. 712,710 596
------------
11,652
------------
- -----------------------------------------------------------------
- -------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
RECREATION & OTHER CONSUMER GOODS (0.5%)
Tube Investments of India Ltd. 266,650 U.S.$ 1,142
Tube Investments of India Ltd. GDR 198,133 693
Tube Investments of India Ltd.
Bonus 16,666 71
------------
1,906
------------
- -----------------------------------------------------------------
- -------------
TELECOMMUNICATIONS (5.0%)
Indian Telephone Industries 832,700 330
MSL Industries Ltd. 124,000 377
Mahanagar Telephone Nigam 2,592,900 13,687
Punjab Wire 138,700 600
Videsh Sanchar Nigam Ltd. 95,000 3,343
------------
18,337
------------
- -----------------------------------------------------------------
- -------------
TEXTILES & APPAREL (6.6%)
A.P. Rayon Ltd. 420,600 900
Arun Processors Ltd. 176,000 31
Arvind Mills Ltd. 1,848 6
Baroda Rayon Corp. Ltd. 15 --
Baroda Rayon Corp. Ltd. (Rights) 15 --
Bata India Ltd. 120,150 227
Century Textiles & Industries GDR 6,500 1,219
Coates Viyella Ltd. 49,860 124
Coates of India Ltd. 248,000 1,709
Cosmos Leather Exports Ltd. 325,000 131
DCL Polyesters Ltd. 704,650 398
Deepak Spinners Ltd. 900 1
Delta Industries Ltd. 380,000 468
G.T.N. Textiles Ltd. 257,500 906
Indo Rama Synthetics 1,034,588 1,214
Indo Rama Synthetics (Rights) 310,060 --
J.K. Synthetics Ltd. 2,093,386 1,780
Mahavir Spinning Mills Ltd. 441,000 1,604
Maral Overseas Ltd. 650,500 515
Modi Threads Ltd. 662,300 87
Precot Mills Ltd. -- New 66,777 298
Priyadashini Spinning 167,150 108
Raymond Ltd. 388,100 3,813
Raymond Ltd. GDR 177,000 3,717
Raymond Ltd. GDR 25,000 525
Raymond Ltd. (Warrants) 52,500 273
Sanotgen 272,800 80
Shree Rajasthan Syntex 266,550 242
SIV Industries GDR 313,500 1,254
SIV Industries (1 Unit = 3 GDR + 1
Warrant) 104,500 --
SRF Ltd. 470,119 724
Super Spinning Mills Ltd. 200,357 858
Vardhaman Polytech Ltd. 283,300 295
Vardhaman Spinning & General Mills
Ltd. 34,500 112
Viral Syntex Ltd. 250,000 374
Woolworth India 478,320 575
------------
24,568
------------
- -----------------------------------------------------------------
- -------------
TRANSPORTATION -- ROAD & RAIL (2.5%)
Container Corp. of India 2,274,600 9,339
------------
- -----------------------------------------------------------------
- -------------
TRANSPORTATION -- SHIPPING (0.5%)
Great Eastern Shipping Ltd. 1,204,500 1,590
Great Eastern Shipping Ltd. GDR 20,000 152
Mercator Lines Ltd. 200,000 109
------------
1,851
------------
- -----------------------------------------------------------------
- -------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
UTILITIES -- ELECTRICAL & GAS (0.0%)
Andhra Valley Power Supply Co. 650 U.S.$ 2
CESC Ltd. (Preferred Warrants) 353,000 4
Tata Hydro Electric Power Supply
Co. Ltd. 450 1
------------
7
------------
- -----------------------------------------------------------------
- -------------
TOTAL INDIAN COMMON STOCKS
(Cost U.S. $440,948) 356,553
------------
- -----------------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT
(000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
FIXED INCOME SECURITIES (0.5%)
- ---------------------------------------------------------
- ------------
AUTOMOBILES (0.0%)
Sundaram Brake NCD 13.00%,
6/18/02 INR 3 23
------------
- -----------------------------------------------------------------
- -------------
CHEMICALS (0.1%)
Chemox Chemical Industries Ltd.
(Convertible) 14.00%, 12/31/00 250 319
------------
- -----------------------------------------------------------------
- -------------
CONSUMER GOODS (0.0%)
Srishti Video Corp. (Convertible)
12.00%, 11/12/96 225 162
------------
- -----------------------------------------------------------------
- -------------
MACHINERY & ENGINEERING (0.1%)
Indian Seamless Metal Tubes
(Convertible) 10.00%, 7/13/96 13,950 231
------------
- -----------------------------------------------------------------
- -------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.2%)
Garware Plastics & Polyester 16.00%, 5/1/05 277 813
------------
- -----------------------------------------------------------------
- -------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
METALS -- STEEL (0.0%)
Special Steels Ltd. 14.00%,
12/6/02 INR 13 U.S.$ 48
------------
- -----------------------------------------------------------------
- -------------
TELECOMMUNICATIONS (0.1%)
MSL Industries, Ltd. 16.00%,
4/1/97 62 273
------------
- -----------------------------------------------------------------
- -------------
TOTAL FIXED INCOME SECURITIES
(Cost U.S. $2,806) 1,869
------------
- -----------------------------------------------------------------
- -------------
</TABLE>
<TABLE>
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT
WITH CUSTODIAN (2.6%)
Indian Rupee (Cost U.S. $9,101) 327,902 9,616
------------
- -----------------------------------------------------------------
- -------------
TOTAL INVESTMENTS (99.4%)
(Cost U.S. $452,855) 368,038
------------
- -----------------------------------------------------------------
- -------------
OTHER ASSETS AND LIABILITIES (0.6%)
Other Assets U.S. $7,622
Liabilities (5,385) 2,237
----------- ------------
- -----------------------------------------------------------------
- -------------
NET ASSETS (100%)
Applicable to 35,707,092, issued and outstanding U.S.
$0.01 par value shares (100,000,000 shares
authorized) U.S.$370,275
-------------
- -----------------------------------------------------------------
- -------------
NET ASSET VALUE PER SHARE U.S.$ 10.37
-------------
</TABLE>
- -----------------------------------------------------------------
- -------------
<TABLE>
<S> <C> <C>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
GDS -- Global Depositary Share
NCD -- Non-Convertible Debentures
</TABLE>
8
