dartmonkey

I am the one who said that the current P/E is 5 (well, 5.5) if the P/B is 1.1 and the E/B (i.e. ROE) is 20%, because P/E is mathematically the same as P/B/(E/B), so 1.1/.2=5.5. I think that for the next few years, those earnings are pretty much locked in, so it is reasonable to say that Fairfax is currently trading at about 5.5 the annual earnings we expect for the next few years. In other words, the company should earn more than half of its market cap in the next 3 years. If anything, I think this is an understatement - the company is quite likely to have even HIGHER earnings - those are just the operating earnings currently expected, before considering the fact that there will be some extra earnings from opportunistic sales like Gulf Re and PetCo and Stelco. But it is true that we cannot count on earning 20% of equity forever - 18% is the history that includes when the company was very small, 15% is the goal that the company has often aimed for in the past, and after a few years of 20%, 12% is a realistic, conservative number that they should be able to hit fairly easily. So using just one number (20%, 18%, 15%, 12%, 10%) probably is too simplistic. If the company can opportunistically repurchase a lot of shares with the cash pouring in the next few years, then that longer term return on equity, let's call it 12%, might be in comparison to a much smaller P (market cap), and we might get the same high low P/E anyways. But if you want to be super pessimistic, and use 12% return on current book even for the next few years, then you still get a pretty low number: P/E = 11./.12 = 9.2. That's not quite a worst case scenario, but it's a strikingly low ratio for a very pessimistic prediction of how the company will do, and they will only do that badly if there are some quite horrific things (like a really bad megacap) that hit them in the next few years.

This is a good point, and it emphasizes that ROE is the missing link, when we are thinking about P/B and P/E and value. It would be more obvious if we didn't use E for 2 different things (equity and earnings), like if we said ROB instead of ROE, and even better if we said E/B instead of ROE. But we have to live with the conventions and everyone talks about ROE, not E/B. At the end of the day, we shareholders shouldn't give a damn about what B is - as Buffett has said, value is the discounted sum of future earnings. Fairfax has a very high ROE, and this is partly because it is heavily levered by its massive insurance float, much more so than Berkshire. This is a great model to have, but it is true that leverage cuts both ways, and so Fairfax arguably deserves a lower multiple on its levered earnings, in addition to worries about possible misallocations of capital like Blackberry and shorts on tech stocks and deflation bets that may have made some investors mistrustful of Fairfax. I think, and I suppose most of us probably think, that this discount for leverage/mistrust is a bit excessive. At current levels, P/B is about 1.1, ROE=E/B is about .20, so P/E is about 1.1/.20=5.5, whereas in Berkshire's case, P/B = 1.6, ROE=E/B is about .12, so P/E is about 1.6/.12 = 13.3. Thoughts?

Yes, and Under Armour is the biggest add, 2.4% of the US publicly traded share portfolio. I wonder what they see in it? Declining revenues, negative earnings recently, 10x highest earnings from a few year's back, so a recovery seems already priced in. Of course, the important thing to keep in mind is that whole portfolio is only worth $1.2b, which is $64b, so 'big' investments revealed in the 13-F are actually tiny compared to things like Poseidon, Eurobank, Recipe, Digit, etc. For example, Blackberry's 'big' 9.8% share of the 13-F portfolio was actually 0.2% of Fairfax's total invested assets, at quarter end, and is even lower now. But don't tell that to the investing community, gotta reduce that share count!

I don't think intrinsic value and "what the market will ever give you" are the same thing. Say you are pessimistic and think the market will never give you more than 1.2x BV, and you can buy the shares at 1.0x BV. But that company is earning 15% of BV every year. In 5 years, that BV will be 2.01x higher. 15% is still a pretty good return, and if the market is now giving you 1.2BV, it means shares will be up by 2.4x, giving you an annualized return of 19%, which is good enough for me. If I buy Sleep Country at a P/E of 19, growing at 10% a year, then I can expect a 5.3% return plus 10%, or 15%, if multiples stay about the same. SJ makes a good argument that regulators will require that insurance companies' liabilities be covered by assets, so there is a very good argument for Fairfax to acquire a big steady earner instead of just investing in its own shares at 1.0x BV. But I think repurchases would provide the higher investment return, even if Mr Market keeps its pessimistic multiple, just because Fairfax is making such a high return on its equity.

I have never seen this happen, and here's why it would generally not work. Say you had a company with 23m shares trading at $1075 per share, for a market cap of $24.75b for instance, and that company was earning $3b a year for the foreseeable future, much of which they intend to use mostly for share repurchases. (I actually am familiar with one company like this.) If they could succeed in spending that $3b on You might think that But there are a few problems. With volume of about 40k shares sold per day, if they were to buy a fifth of that volume on the open market(that would be the limit for a normal course offering on the Toronto exchange, for instance), and if they were allowed to do this 200 trading days a year (they aren't, because of the timing around reports, etc., but being optimistic), that would mean they could buy about 1.6 million shares in a year, or $1.7b worth if the share price didn't change. That problem could be remedied by doing a substantial issuer bid, so it is not the principal problem. Second, in Canada, there is now a 2% tax on repurchases of over $1 million. I have not seen this addressed by Watsa or, for that matter, by Buffett, for Berkshire, given that there is now a 1% tax on transactions in the USA. But the biggest problem, for a company that wanted to take itself private, is that if the share repurchase is done at attractive prices, then the earnings per share of such a company would increase enormously, and it is almost certain that share prices would go much higher. I think this is likely to happen with Fairfax. There may be a few years where you could slip this manoeuvre pas ordiinary shareholders, who still believe that Fairfax's management is incompetent (Blackberry would be the prime example, or the failed shorts on tech companies, or the failed bet on deflation, or fraudulent (as accused by Muddy Waters, for instance), or just a boring company like EL-Financial that is cheap for a reason, since it has no moat and no sexy high-tech future. But if Fairfax got down to a 50% reduction in share count, and earnings held up, I am pretty sure the price of shares would soar, and Fairfax would find it increasingly difficult to repurchase substantial numbers of shares. I guess the last point is that fit would be very out of character for Watsa to attempt to take the company private. I believe that he feels a sense of obligation to shareholders such that he would never dream of doing such a thing just out of principle. It is one thing to take another company private, despite the disappointment of minority shareholders, and it is quite another to take one's own company private, against the will of one's own minority shareholders. Anyways, Fairfax management only owns a small percentage of the firm right now: about 10%, and other directors have minimal stakes I believe. So they are a long way from taking the company private, even if they wanted to.

$125/ share is the right number. However, it’s possible that Watsa meant that current assets are expected to generate $125/share for 4 years. But that $500/share will be invested, too. If, for instance, it’s all invested in buybacks (it won’t be, but just to simplify the math), that would mean almost half (500/1077) of the shares would be retired, and earnings/share would be almost double. In real life, most of that $500/share will be reinvested in something else with somewhat lower returns, but nonetheless, the actual earnings will be much, much higher than $125/share. In other words, Watsa is NOT saying that he expects there will be zero investment gains and zero returns on the $16b of operating earnings generated in the next 4 years.

This Q2 report: During the first six months of 2024 the company purchased for cancellation 854,031 subordinate voting shares (2023 – 179,744) principally under its normal course issuer bids at a cost of $938.1 (2023 – $114.9), of which $726.5 (2023 – $70.4) was charged to retained earnings. Included were 275,000 subordinate voting shares purchased from Prem Watsa, the company's Chairman and CEO, for $304.3 pursuant to an exemption from the issuer bid requirements contained in applicable Canadian securities laws. Q1 report, to subtract out the first 3 months: During the first quarter of 2024 the number of common shares effectively outstanding decreased by 172,075, primarily as a result of purchases of 240,734 subordinate voting shares for cancellation, partially offset by net issuances of 68,659 subordinate voting shares from treasury (for use in the company’s sharebased payment awards). At March 31, 2024 there were 22,831,173 common shares effectively outstanding. So in Q2 alone, they purchased 854,031 - 172,075 = 681,956 shares, 275,000 of which were the Watsa bloc, so 406,956 shares, still a substantial acceleration from 172,075, and this is despite generally higher prices in the second quarter, . That would make for an annual rate of 1,627,824 shares, or 7.1% of the current number of implied shares outstanding (22.92 million).

Not quite true: Watsa said this in the 2023 annual report (my emphasis): We can see sustaining our adjusted operating income for the next four years at $4.0 billion (no guarantees), consisting of: underwriting profit of $1.25 billion or more; interest and dividend income of at least $2.0 billion; and income from associates of $750 million, or about $125 per share after taxes, interest expense, corporate overhead and other costs. These figures are all, of course, before fluctuations in realized and unrealized gains in stocks and bonds! https://www.fairfax.ca/wp-content/uploads/FFH_Fairfax-Financial-Shareholders-Letter-2023.pdf

I just increased my stake from 36% to 39%. I love the idea of paying the same price that shares were trading for in March, despite now knowing that we have 2 blowout quarters, almost all the big associated investments are doing brilliantly, share repurchases are steaming ahead, and share prices are close to book. And this is DESPITE the repurchases, which tend to make the price:book ratio higher. I think Mr Market is very likely to swing back to a more reasonable (higher price) when he sobers up.

Yes. Courts do sometimes make judgments I don't agree with, but the judgment by 2 different judges that Fairfax supported a transfer of these Fibrek shares at a price that was beneath fair value (half of fair value or 2/3, according to the appellate judge), does mean you have a point. On the other hand, I think one could make a strong argument that it was hard to know exactly how much these shares were worth, and the $1 price, which included a premium, was accepted by the majority of minority shareholders. I can see how this would be disappointing and even infuriating, if I were a minority shareholder who thought it was worth much more, but I don't see why Fairfax should pay more than it has to for those minority shares. And given that this was not even an acquisition, but rather a purchase of Fibrek by Resolute, Fairfax had an incentive to price the shares higher, not lower. A low Fibrek share price was a benefit to Resolute, but not to Fairfax itself. Or am I misunderstanding the incentives here?

Yes the Fibrek case was neither fair nor friendly. But you don't have to take my word for it. Large shareholders sued Fairfax, took the matter to court and won. The Court found that the take over price was neither fair, nor friendly, nor legal. Yes and no. The initial ruling did double the share price, from $1 to $1.99, and found much to criticize with Resolute and Fairfax. But the case was appealed, and much of the appeal was allowed, with sale price adjusted down closer to the original $1 offered, from $1.99 to $1.597. The appeal judge found that the judge of the appealed ruling had committed numerous errors, for instance not considering the fact that the $1 price already included a premium, and ignoring the fact that a large majority of minority shareholders had accepted the $1 offered. The appeal judge also found that much of the criticism of the purchaser (Resolute) and the shareholders with which it had signed lock-up agreements (Fairfax) was unfounded. Ruling here: https://courdappelduquebec.ca/en/judgments/details/fixation-des-actions-de-fibrek-inc/ Excerpt: Appeal from a judgment of the Superior Court fixing the fair value of the shares under s. 190(15) of the Canada Business Corporations Act (R.S.C. 1985, c. C-44). Allowed in part. In the context of a hostile take-over bid, the application was filed after certain shareholders exercised their right to dissent pursuant to s. 190 of the Canada Business Corporations Act. To determine the fair value of the shares, the trial judge used as a starting point the value of a bid competing with the accepted take-over bid ($1.40), to which he added $0.27 to account for synergies arising from the transaction and $0.40 representing the added value of a lucrative Hydro-Québec contract. The judge then subtracted $0.08 per share for environmental liabilities identified after the assets were taken over, for a final value of $1.99 per share. In addition to contesting this value on appeal, the purchaser of the majority of Fibrek Holding Inc.’s common shares argues that the judge erred in adding the additional indemnity under art. 1619 of the Civil Code of Québec (S.Q. 1991, c. 64) to the amount payable. The judge committed certain palpable and overriding errors. First, he should not have disregarded the value of the purchaser’s offer as a starting point for the analysis. Without being the sole relevant factor, market value is a reliable indicator of the fair value of shares. The purchaser’s offer, however, included a premium over the price at which the shares were trading on the market. Further, a large majority of the shareholders, holding 115 million shares, had accepted it. Also, the judge’s criticism of the conduct of the purchaser and the shareholders with whom it had signed hard lock-up agreements for 46% of the outstanding shares was unfounded, although it is true that this made it practically impossible to put a competing bid over the 50% approval mark. The judge also committed a reviewable error by using a competing bid as the starting price. Indeed, it was nearly impossible for such an offer to materialize, given the conditions attached to it. Moreover, in the context where both the purchaser’s offer and the competing bid included consideration payable in shares, he ought to have taken into account the significant drop in the value of those shares on the valuation date, which he failed to do. He also committed many errors by adding the value of the synergies arising from the transaction to the competing bid, namely because that led him to conduct a hypothetical auction rather than use objective evidence. Although the added premium for the Hydro-Québec contract was somewhat speculative, there is no reason to intervene in this respect on appeal. In conclusion, by updating the purchaser’s offer as at the valuation date, by adding the value of the Hydro-Québec contract and subtracting the environmental liabilities, the Court fixes the value at $1.5973 per share. It is a good thing for Fairfax shareholders that making 'fair and friendly' offers does not extend to offering a price so high that no minority shareholders object to it.

I think there is a big difference between an investment vehicle that Fairfax has set up, where it has a bit of an obligation to investors to be fair, and minority investors in a company like Fibrek, who feel that their investment got taken away from them when it was acquired (at a 39% premium) by another company (Resolute) with the support of Fairfax. Fairfax has no obligation to other Fibrek investors, but it arguably does have an obligation to Fairfax India investors.

I completely agree. Fairfax India is a coiled spring, and it would probably be a great deal for Fairfax to take over the 57.5% of the company is doesn't already own. BUT... In addition to the factors Viking mentioned, Fairfax is getting an annual 1.5% fee on net asset value (including the 57.5% it doesn't own) plus a fifth of returns above 5%, so that's another reason to not disturb the golden goose. But the biggest reason, surely, is in Fairfax's name: they have set up this investment vehicle which has done well as far as increasing book value, but has done very poorly as far as share price increases go. If they were to take it private now, that would definitely not be seen as something that is 'fair and friendly', and would compromise their reputation and any future prospects of setting up similar funds. In the same way, they took their management fee in cash instead of in shares of FIH, not because the shares aren't a good deal, but because they don't want to appear like a vulture. As an investor with a big stake in FIH, almost as big as my FFH stake, I would be disappointed, although I would grudgingly take what would likely be a large premium to the current share price and reinvest in FFH, so it would work out ok for me. But I would prefer that the share price do this without a takeover, and I think that is quite likely in the next year or so, the 2 catalysts being the Bangalore airport IPO and the IDBI purchase. I would be very surprised to see Fairfax think it is fair and friendly to take out FIH just prior to one of these catalysts finally arriving.

It sure would be great to have a year by year summary of the 30 years of share issuance and repurchase, with a suitable metric demonstrating that the issuances happened at high valuations and the repurchases at low valuation, not that I doubt for a second that this has been the overall pattern. The above table, for 2018 to 2023, shows us the net share reduction, and I believe that there has been minimal share issuance in that period, and we all know that P/B has been low over this whole period, often beneath 1.0. But for 1985 to 2017, when share count went from 5.0 to 27.8 million, which as you say can be summarized as (5 + 29.5 - 6.7), do we have any detail on what valuations were like for the periods when 29.5 million shares were issued, versus the valuation when the 6.7 million shares were repurchased? The only way I can think of getting that would be to look at share counts quarter by quarter, with, say, book values at the beginning and end of each quarter, and seeing P/B during quarters when there were net issuances vs P/B during quarters when shares were issued. One would probably need to build up a spreadsheet with about 160 lines (4 quarters a year, for almost 40 years), with the share price, the book value, and the number of shares outstanding at the end of each quarter. Project for a rainy day...

Following the Henry Singleton example, periods of overvaluation can help, too. Singleton issued stock when valuations were high, and repurchased stock when they were low. He is known for the period when he retired almost 90% of outstanding shares at low multiples, sometimes <10 times earnings. But he also succeeded by raising capital at much higher multiples, typically 40-70 times, in an earlier period. The ideal would be to have both kinds of periods. By the way, here is what Watsa had to say about Singleton and buybacks, in the 1997 annual letter (my emphasis): While we have had very minimal stock buybacks in the past few years, we should remind our newer shareholders that we have bought back significant amounts of our shares in the past (i.e. 1.6 million shares or 25% in 1990). By the way, you may not know, but the Michael Jordan of stock buybacks was Henry Singleton at Teledyne. Henry began Teledyne in 1961 with approximately seven million shares outstanding and grew the company through acquisitions while shares outstanding peaked in 1972 at 88 million. From 1972 to 1987, long before stock buybacks became popular, Henry reduced the shares outstanding by 87% to 12 million. Book value per share and stock prices compounded in excess of 22% per year during Henry’s 27 year watch at Teledyne– one of the best track records in the business. We will always consider investing in our stock first (i.e. stock buyback) before making any acquisitions.

I think this is a very important point. Buffett had to change strategy as the company got bigger and bigger, and smaller workouts and trading anomalies and cigar butts became unavailable at a larger scale. I suspect Buffett really likes the idea of being a huge conglomerate that everyone talks about, and that influences business practices, and so he has been, until recently, remarkably resistant to buybacks that would shrink the canvas. After years of praising share repurchases done by the companies he had invested in, but not himself repurchasing Berkshare shares, Buffett finally started buying back Berkshire shares, in 2011 I believe, and at that time Berkshire had a market cap of about $189b (it is now $945b). Now Fairfax currently has a market cap of about $27b, with earnings of $3-4b in the last 3 years and probably in the next few years, too. If Watsa wants, he can avoid the fate of Berkshire of becoming a trillion dollar company, and keep things small, if he spends most of the $3-4b in earnings on buybacks. At ear end 2017, when there were 27.8m shares outstanding, the company had a market cap of $14.7b (share price of $530); at year end 2023, with 23.0m shares outstanding, the company had a market cap of $21.2b (share price of $921). Assuming they now have about 22.9m shares outstanding (we will know on Friday), and if they repurchased the 1.964m shares they have total return swaps on, the would now have 21.0m shares outstanding and a market cap of $24.1m, still not that much higher than 7 years ago, despite the price increase from $530 at the end of 2017 to $1146 now. In other words, they could decide to go the Henry Singleton route instead of the Warren Buffett route. They have started substantial buybacks at a market cap that is $14.7b instead of when Buffett started at a market cap of $189b, more than an order of magnitude sooner. Maybe Watsa should announce that he is increasing his investment in Blackberry by 10%, just to really piss off the shareholders who don't know that this has become an insignifcant holding, and then ramp the repurchases. I'm kidding, I'm kidding, stop throwing tomatoes at your computer screens. But ramping up the repurchases to keep the company reasonably small is still an option for Fairfax, and might be a preferable route for maximising our shareholder returns.

I'm a novice India investor, I still have to look up what a crore is (it's 10 million; 100 thousand is a lakh, 100 lakhs is a crore.) It's not clear to me why they talk about Kempegowda International Airport (KIA) getting to a crore and all Indian airports getting to 99.54 millions, which they could also have called 9.954 crore, but since 1 lakh is 10 million, it looks like Bengalaru accounts for over 10% of all Indian air traffic now. 7.1% growth year over year for all Indian traffic, and 7.2% growth at Bengalaru, so they are in line with national growth rates, which is good news I suppose. They also note that 89.3 lakh of the 100 lakh passengers were domestic, up 5.5%, and 13.4 lakh were the more profitable foreign travellers. They say that the percentage increase for foreign travellers at KIA was up by 20.3%, but unless I'm making a stupid mistake, that doesn't compute with their overall traffic increase of 7.2% ; I get foreign traffic up 38.9%, which would be even better news. Both numbers would be good, I guess we will see which one is right when KIA puts out a press release about their Q2 numbers.

Or maybe fires taking out half of Jasper? Parks Canada self-insures but the rest of the town might be a substantial exposure for a Canadian P&C insurer or reinsurer. https://www.canadianunderwriter.ca/insurance/jasper-wildfires-industry-braces-for-huge-losses-1004248763/

Small correction: BoC target is not 2-3%, it’s 1-3%: The Bank of Canada aims to keep inflation at the 2 per cent midpoint of an inflation-control range of 1 to 3 per cent. The inflation target is expressed in terms of total CPI inflation. The Bank of Canada uses measures of core inflation as an operational guide to help achieve the total CPI inflation target.

Muddy Waters in February said Digit would not go public and was worth $1.5b, not the implied $3.5b value as per the carrying value of Fairfax’s stake. But the IPO did happen, in May, with about 6% new shares issued at 286 INR (market cap $3.1b). With shares at 363 today, the market cap is grazing $4.b. This was the holding that MW thought FFH had overmarked the most, but if FFH carried it at market value, at today’s price they would actually have to mark it up by about 15%…

Yeah, that would make sense, although it would still increase the allocation to Financials, already by far the biggest proportion at 34%. That includes banks, insurance companies and asset managers: going by their rank in market cap for Canadian companies, the financial sector of the TSX60 includes banks: #1 Royal Bank, #2 TD Bank, #11 BMO, #12 Scotiabank, #16 CIBC and #27 National Bank; insurance companies: #14 Manulife, #25 Intact Financial, #28 SunLife, and #29 Great-West Lifeco; and also asset managers: #9 Brookfield Corp (BN), #44 Power Corp and #48 Brookfield Asset Mgmt (BAM). Fairfax has the #31st biggest market cap in Canada, so if included it would be the smallest of the 5 insurance companies but 2 of the 3 asset managers and almost as big as the #6 bank, National Bank. But if they dumped the smallest TSX60 component, Algonquin Power and Utilities, which is #88 with its market cap of $6.3b (CAD), and replaced it with Fairfax which is #26 at $38b, it would add roughly a bit more than 1% to the already big Financial sector. If balancing the sectors is also a goal of the index, then it might make more sense to dump the smallest financial (#48 BAM) and replace it with #31 Fairfax. Ultimately, the problem is that the index can not do everything it sets out to do: include the biggest Canadian companies, but keep sector representation similar to their importance in the Canadian economy. Given that we don't know how much importance is given to the different objectives, it is hard to say what they might do, as long as the smallest company (Algonquin) stays above the 20 bp criterion; right now at 20.2 bp, they are just 1% over. What is the biggest Canadian company that is NOT in the TSX60? Is it #31 Fairfax? It looks like #20 Lululemon, headquarters in Vancouver, takes that honour, probably because they are not listed on the TSX. Then there is #36 CGI, headquarters in Montreal, an IT services company which does have a TSX listing. #45 Ivanhoe Mines is up about 100% in the last year which probably explains their absence. #49 GFL, a waste manager, is a third the size of Waste Connections (WCN) which is in the index. Those seem to be the biggest Canadian companies not included.

The point is not that the public has a hard time buying shares, it's that the Dow Jones has a weird weighting system where each company is weighted by its share price, not by its market cap (the latter being how most indexes are weighted, like the S&P 500). That means that Apple, the company with the highest market cap ($3.5t) has a 3.8% weight because of its $228 share price, slightly less than American Express which has a 3.9% weight because its share price is $238, even though AmEx has a market cap of $171b, 1/20th of Apple's. Including Berkshire with its $620,000 A-share price would make Berkshire 99% of the index. Of course, nowadays, they could select the B-shares and that would make Berkshire the DJ element with the 4th largest weight (after United Health Group, Microsoft and Goldman Sachs). Since 2017, the DJ has excluded companies with multiple classes of shares, but Berkshire would easily have been in the top 30 companies in 2017 so I don't know why they weren't included prior to 2017.

Rebalances happen every 3 months, next one in September. One of the rules is that no company should constitute less than 0.2% of the index (obviously, the average is 100%/60=1.67%). Right now, the smallest constituent is Algonquin Power and Utilities (AQN), which, at $5.621b market cap, constitues 0.202% of the index, so they are flirting with ejection. They are in a sector (Energy) which is already heavily represented, at 17.9%; unfortunately for the prospects of Fairfax inclusion, so are Financials, at 34.4%. They could turf Canadian Apartment Properties Real Estate Investment Trust (CAR.UN) which is at 0.28% and put Fairfax in, given that Fairfax is #31 by market cap of Canadian companies, so would seem to belong to the TSX60 which is in principal "designed to represent leading companies in leading industries. Its 60 stocks make it ideal for coverage of companies with large market capitalizations and a cost-efficient way to achieve Canadian equity exposure." I'm guessing it won't happen yet, but it would be a nice surprise, if you like that sort of thing.

Fairfax gives FIH a carrying value of $1971m at March 31st, and a 'fair value' of $3083m. Note 5 in the Q1 report (p.9) shows that this is just the sum of cash, bonds, commons stocks and the carrying value of investments in associates (primarily the airport), $1426m, with a fair value of $2538. But does anyone know how they come up with that carrying value? Note 2 on p.47 of the Q2 report suggests that this is just equity ("The adjusted carrying value of each subsidiary represents its total equity as included in the company's interim consolidated financial statements for the three months ended March 31, 2024, less the subsidiary's non-controlling interests as included in note 12 (Total Equity) to those interim consolidated financial statements."), but FIH's equity is much higher than the share price, so I don't understand how they are calculating the carrying value of FIH.

The recovery of IIFL Finance continues. To recap, they got into some regulatory trouble in March as the Reserve Bank of India (RBI) asked IIFL FInance to stop sanctioning or disbursing gold loans after raising concerns about the company's gold loan portfolio. The share price dropped from about 600 to close to 300, and IIFL issued shares (at 300 INR) and debt, FIH participating in both. FIH now owns 15.1% of the firm, and with shares at 517.60 at the June 30 close, well up from 340.10 at the end of Q1 and 2/3 of the way back to the 600 region. For FIH, the impact on Q2 results should be significant, as this represents a $137m increase in this mark-to-market stake, reversing most of the $178m Q1 loss, for a gain of almost exactly $1 per FIH share. Most of FIH's book value is in the Bangalore Airport, and there are other private investments like Sanmar Chemical, 7 Islands Shipping and Maxop Engineering. But looking at the five big public investments, worth about a third of FIH's total book value, they seem to have all gone in the right direction. Ignoring USD:INR (which stayed at exactly 83.7), FIH's 5 biggest public investments were up 30% in total: Q2 report was August 3rd last year, so I guess we'll know in about 4 weeks, but it looks like results should be dramatically better than Q1.