The India Fund is at year low…time to buy? (IFN)

November 25, 2011 at 10:14 am by

Future growth prospects for India are bright, but recent economic data and actions have The India Fund (IFN, quote), a closed end fund from The Blackstone Group (BX, quote), at a year low.

The economic woes of India have been detailed in many articles on www.emergingmoney.com.  Moody’s just downgraded the banking sector.  Auto sales are off.  The airlines are in terrible financial shape.  There is speculation that the sovereign debt of India will eventually be downgraded,

Thas has certainly been reflected in the performance of The India Fund.  Now trading around $22.21, it is down from a year high of $34.74.  It is down more than 6% for the week, more than 8% for the month, more than 10% for the quarter, more than 20% for the last six months, and more than 30% for the year.  Investors like predictability, but not like that!

At present, The India Fund is selling at a deep discount to its net asset value.  The price-to-earnings ratio is around 11.  This are not as attractive as might be considered due to the assets not being valued correctly.  What is appealing is there is no debt.

The past certainly provides hope for the future of The India Fund, as for the country.  IFN used to have a very healthy dividend yield, even though in 2007 it was trading at well over $60 a share.  India will be back, and so will The India Fund.

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  • The Kid

    Ive been looking at the India Fund and started building a position this week as the India selloff has indeed been large and the discount is very attractive. I like India and after my visit in 2010 it is still growing with decades of strong growth ahead-it is still some 20years behind China. I plan to add more as the European crisis and shocks continue to hit global markets-these are great buying opportunities.
    Good job Tim. Your insights are most valuable and much appreciated. Regards, The Kid

    • Jonathan Yates

      Hi-

      Thanks for the email.

      I could not agree with you more about
      dips in the market being a buying opportunity.
      Many of the valuations on stocks in emerging
      markets are very tempting, particularly the
      dividend yields.

      What stocks are you looking to acquire for
      your position?

      Best Wishes-

      EMERGING MONEY

  • Ron Ferrill

    This is probably a lot smarter play than IBN for long-term speculative $$.

    Man, you guys keep us thinking. If I hadn’t lost my job at 64, and my wife spent 8 of the last 12 months in the hospital (after COBRA ran out), I’d be all over your service. As it is I’ll continue to follow and always try to catch you on CNBC. What happened to the Friday slot? or am I missing something.

    Thanks again for the excellent perspective on Emerging Markets

    • Jonathan Yates

      Dear Mr. Ferrill:

      Thank you for your email. We are sorry to hear about your wife.
      We have been writing quite a bit about India, lately. Many of
      the sectors of the economy have been downgraded. It appears
      as if the debt of the country is next. But, “smart money” such
      as KKR and The Blackstone Group are looking to invest billions
      over a period of years, so there is definitely an upside to the
      country.

      Did you read this article from http://www.emergingmoney.com on The
      Blackstone Group looking to buy in India?

      http://emergingmoney.com/stocks/the-blackstone-group-is-looking-for-deals-in-india-bx-ifn-ttm/

      Best Wishes-
      Emerging Money