Last minute odd lot arbitrage (IFN)

Thanks to a reader I was alerted just in time that the India Fund (IFN) is buying back 5% of the outstanding stock for 98% of NAV (SEC filing). The fund is buying back shares at 98% of NAV and had a NAV of $24.51/share yesterday. Today the shares are up 3.6% and trading at $23.23. Assuming that the discount hasn’t changed this would imply that the EV of buying and tendering an odd lot is approximately (24.51 * 1.036 * 0.98 – 23.23) * 99 = $164. Unfortunately for my readers who want to participate, the deadline is today, and most brokers require you to buy and tender the shares multiple hours or even days in advance (IB has the deadline at 13:00).

Luckily for my readers the reason that I almost missed this opportunity also means that it’s coming again. Unlike other funds that buy back shares irregularly (and file a form SC TO-I) the India Fund has a regular tender offer program in place. They are buying back shares two times a year and file a form N-23C3A. The only other fund doing this that also always has an odd lot provision is the Asia Tigers Fund.

Disclosure

Long IFN

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