The India Fund, Inc. Announces Rights Offering
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Insights
The issuance of transferable rights to common stockholders of The India Fund, Inc. represents an opportunity for the Fund to expand its asset base, which can be leveraged to capitalize on investment opportunities in Indian equity securities. By offering common stock at a discount, the Fund is incentivizing existing shareholders to increase their investment, potentially enhancing shareholder value. However, the impact on the Fund's share price and the dilution of existing shares must be monitored closely. The Fund's decision to offer shares at a discount to the market price, yet subject to a sales load, could affect the attractiveness of the offer.
It is also noteworthy that the rights are transferable and will be traded on the NYSE, which may lead to increased liquidity and visibility for the Fund in the market. The pricing formula for the subscription price, pegged at 92.5% of the average market price or 93% of the NAV, whichever is higher, offers a balanced approach to determining the subscription price, aiming to be fair to both new investors and existing shareholders. However, market reaction to this pricing strategy will be an area to watch.
The closed-end fund structure of The India Fund, Inc. means that the market price of its shares can deviate significantly from the NAV. This rights offering could potentially narrow or widen the discount/premium at which the Fund's shares trade relative to the NAV. Understanding the historical trading patterns of the Fund's shares in relation to its NAV will be key in forecasting the potential market response to this rights offering.
Furthermore, the Indian equity market's performance and the Fund's management team's ability to identify and capitalize on investment opportunities are critical factors that will influence the long-term success of this capital increase. Investors should closely assess the Fund's past performance, the current economic climate in India and the sectors or companies the Fund is targeting for investment.
From a regulatory standpoint, the rights offering is being conducted under a shelf registration statement, which provides the Fund with flexibility in timing the market entry for this capital raise. Investors should note that the prospectus supplement and accompanying prospectus will provide important details about the offer and it is important that these documents are scrutinized for a complete understanding of the terms and potential risks associated with the rights offering.
The Fund's compliance with SEC regulations and transparency in communication to potential and existing investors through the prospectus will be central to the integrity of the Offer. Additionally, the Fund's decision to bear the expenses associated with the Offer, which will indirectly impact common stockholders, should be evaluated in the context of the potential benefits from the capital raise.
PHILADELPHIA, PA / ACCESSWIRE / April 8, 2024 / The Board of Directors (the "Board") of The India Fund, Inc. (NYSE:IFN) (the "Fund"), a closed-end fund, has approved the terms of the issuance of transferable rights ("Rights") to the holders of the Fund's common stock (the "Common Stockholders") of beneficial interest ("Common Stock") as of the record date, entitling the holders of those Rights to subscribe for Common Stock (the "Offer"). The Board, based on the recommendations and presentations of abrdn Asia Limited, the Fund's investment manager (the "Manager"), and others, has determined that it is in the best interests of the Fund and the Common Stockholders to conduct the Offer and seek to increase the assets of the Fund available for investment to take advantage of existing and future investment opportunities that are or may become available. The Offer seeks to provide an opportunity to existing Common Stockholders to purchase Common Stock at a discount to market price (subject to a sales load).
The Fund will distribute to Common Stockholders of record as of the record date ("Record Date Stockholders"), which is currently anticipated to be April 18, 2024 (the "Record Date"), one Right for each share of Common Stock held on the Record Date. Record Date Stockholders will be entitled to purchase one new share of Common Stock for every three Rights held (1 for 3); however, any Common Stockholder who owns fewer than three shares of Common Stock as of the Record Date will be entitled to subscribe for one share of Common Stock. Fractional shares of Common Stock will not be issued.
The proposed subscription period is currently anticipated to commence on the Record Date and expire on May 14, 2024, unless extended by the Fund (the "Expiration Date"). The Rights are transferable and are expected to be admitted for trading on the New York Stock Exchange (the "NYSE") under the symbol "IFN RT" during the course of the Offer. Rights may be exercised at any time during the subscription period.
The subscription price per share of Common Stock (the "Subscription Price") will be determined on the Expiration Date and will be based upon a formula equal to
Record Date Stockholders who exercise all their Rights will be eligible for an over-subscription privilege entitling Record Date Stockholders to subscribe, subject to certain limitations and allotment, for any additional shares of Common Stock not purchased pursuant to the primary subscription.
The Offer will be made pursuant to the Fund's currently effective shelf registration statement on file with the Securities and Exchange Commission ("SEC") and by means of a prospectus supplement and accompanying prospectus. A final prospectus supplement and accompanying prospectus will be filed with the SEC but has not been filed as of the date of this release. The Fund expects to mail subscription certificates evidencing the Rights and a copy of the prospectus for the Offer to Record Date Stockholders within the United States shortly following the Record Date. To exercise their Rights, Common Stockholders who hold their Common Stock through a broker, custodian, or trust company, should contact such entity to forward their instructions to either exercise or sell their Rights on their behalf. Common Stockholders who do not hold Common Stock through a broker, custodian, or trust company, should forward their instructions to either exercise or sell their Rights by completing the subscription certificate and delivering it to the subscription agent for the Offer, together with their payment, at one of the locations indicated on the subscription certificate or in the prospectus supplement.
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The Fund is a non-diversified, closed-end management investment company. The Fund's primary investment objective is long-term capital appreciation, which it seeks to achieve by investing primarily in the equity securities of Indian companies. Depending on current market conditions and the Fund's outlook over time, the Fund seeks to achieve its investment objectives by opportunistically investing at least
The Fund is managed and advised by abrdn Asia Limited. The Common Stock trades on the NYSE under the symbol "IFN".
In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, abrdn Asia Limited, abrdn Private Equity (Europe) Limited and abrdn ETFs Advisors LLC.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund's investment return and principal value will fluctuate so that an investor's shares of Common Stock may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the NAV of the fund's portfolio. There is no assurance that the Fund will achieve its investment objective. Past performance does not guarantee future results.
Investors should consider the Fund's investment objective, risks, charges, and expenses carefully before investing. There is no assurance that the Fund will achieve its investment objective. For further information regarding the Offer, or to obtain a prospectus supplement and accompanying prospectus, when available, please visit the website maintained by the SEC at www.sec.gov or contact the Fund's Information Agent:
Equiniti Group Limited
+1 (866) 521-4429
The Fund will pay expenses associated with the Offer which will be borne indirectly by the Common Stockholders.
The information herein is not complete and is subject to change. This press release shall not constitute an offer to sell or constitute a solicitation of an offer to buy. Investors should read the prospectus supplement and accompanying prospectus, when available, and consider the investment objective, risks, fees, and expenses of the Fund carefully before investing. This press release is not an offer to sell these securities and is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
If you wish to receive this information electronically, please contact Investor.Relations@abrdn.com
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For More Information Contact:
abrdn Inc.
abrdn U.S. Closed-End Funds
Investor Relations
1-800-522-5465
Investor.Relations@abrdn.com
SOURCE: The India Fund, Inc.
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FAQ
What is the purpose of the issuance of transferable rights by The India Fund, Inc. (IFN)?
When is the subscription period for the offer by The India Fund, Inc. (IFN)?
How is the subscription price per share determined for the offer by The India Fund, Inc. (IFN)?
What is the over-subscription privilege offered by The India Fund, Inc. (IFN)?
How will the offer by The India Fund, Inc. (IFN) be conducted?
