Parchayi.com - Personal Finance SimplifiedYes, Oversubscription for me!
In a previous post, I mentioned that I did not get oversubscribed shares for the India Fund Inc. However, that is officialy wrong. The shares got deposited today! Yipee. Some more free IFN for me.
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No Oversubscription For Me
The India Fund Inc. withdrew money from my account for IFN shares assigned to me from rights. I did not get any oversubscribed shares as yet so I’m assuming I won’t get any. Overall, the rights offer wasn’t such a great deal as the fund premium dropped significantly. I sold some IFN shares to pay for the new shares from rights and as the end result ended up getting a few shares free, not as many as I expected but it’s still free money 
Closing of India Fund Inc. Rights Offer
The India Fund Rights Offer Closed today. The offering price of the shares (95% of NAV at close on Friday) is $34.00, which would mean at a current price of around 38 represents a gain of 11%, far lower than I expected but still very decent for no effort. The Fund said shareholders subscribed to about 18.5 million shares (including oversubscription requests). The Fund however did not say when it will assign oversubscribed shares. As I mentioned before, the rest of the shares are already deposited.
India Fund Inc. (IFN) Rights Offer
Shares from the India Fund Inc. (IFN) rights offer deposited in my Scottrade account today, one day before the close of the offer. Oversubscribed shares have not yet been deposited, so I don’t know if I will get any. I hope I do. As of last Friday, the premium on the fund was 15%. Stay tuned to this space and I will post the premium at tomorrow’s close by Monday. I believe it will be less than 15% because IFN has been dropping inspite of a rising Indian market. But you never know.
India ETF Coming
Recently I read reports that PowerShares plans to introduce an India ETF in the US based on the Halter Index (HXI). However, HXI is not really an India Index. It is an index of ADR’s and companies in the US whose primary business is in India. The index consists of very few components and doesn’t really represent the Indian market as a whole.
What I would wish for is an ETF, based on the MSCI India Index - They have one in Singapore, how about giving us one in the US?
However, it should be noted that India Fund Inc. (IFN) and the Morgan Stanley India Investment Fund (IIF) have both been outperforming the Indian indices (BSE and NSE). I would assume they are also outperforming the MSCI Index?
India Fund Inc. rights offer and Scottrade
I have my account at Scottrade and the India Fund Inc. (IFN) rights got deposited today (instead of last Monday). I called up Scottrade (Richmond) because rights offer subscriptions can only be done on the phone but they can’t do anything about the offer now because ‘it is not in their system yet’.
Last year, unlike now, everything happened on time except that Scottrade took money out to pay for shares from the rights around one month later than the shares were deposited into the account! I’m hoping they do that this year too
India Fund Inc. Rights Offering > 32% Return
The India Fund Inc. announced its rights offering on Friday. Shareholders as of 3rd of July receive 1 right per share. For every three rights you can buy one share of IFN at 95% of NAV on Aug 4. As of Friday (16th Jun), the premium on IFN was 32%. Assuming this premium stays high until Aug 4, you have a significant return for using the rights offer to buy more India Fund.
