valueinvesting101

Looks like repurchasing continued from February 12 to March 6. About 2813 A shares were repurchased. Not sure if these were purchased from market or via private transaction. May be it was a private purchase from Gottesman family. Bit surprised that purchases continued during this period when average price of above 400 and lowest was around 395 for B shares.

I was looking at management of IIFL Finance as listed here: https://www.iifl.com/finance/about-us/leaders. Rupal Jain who is leaving IIFL had 10 years of experience total professional experience after finishing her bachelor's education in 2013-2014. Upcoming Chief compliance officer Mauli Agarwal also has less than 10 years of professional experience as she has finished her education in 2015. It might incorrect equate experience with capability but definitely make me circumspect about their ability to monitor complex operation effectively. I wouldn't be surprised if RBI's regulatory personnel looking down upon younger compliance manager in IIFL purely due to age or may be due to communication gaps. Definitely seems to have less experience than I would have expected for someone as head of compliance. Bio of some of the other leaders in the Gold loan business also seems like they have recently assumed responsibilities for larger operation.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/1d915198-cd20-434b-a2f5-360169c0b09e.pdf Fairfax India Agrees to Invest up to US$200 Million Liquidity Support to IIFL Finance Not much details about the possible investment. It seems IIFL Finance is in damage control mode right now. May need bigger liquidity support than $200 Million

Thanks a lot @gfp for posting this. There are no depository from Japan on page 39 of this filing. Can Japanese companies be held without depository? Also ICICI Bank, Mumbai India is listed as a depository with balance of 1,500. Does that mean Berkshire is holding investment in India valued at 1.5 Billion? I couldn't find any mention of Indian security in the filing. Is it related to Paytm holding which was liquidated earlier in 2023?

This one seems more serious than IIFL securities. That one was imposed by SEBI which was related to past misconduct which was overturned on an appeal. RBI action letter is flagging deficiencies about the entire gold loan business workflow. Gold loan is nearly 30% of the loan book. ”Certain material supervisory concerns were observed in the gold loan portfolio of the company, including serious deviations in assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default; breaches in Loan-to-Value ratio; significant disbursal and collection of loan amount in cash far in excess of the statutory limit; non-adherence to the standard auction process; and lack of transparency in charges being levied to customer accounts, etc. These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers. Over the last few months, the RBI has been engaging with the senior management and the statutory auditors of the company on these deficiencies; however, no meaningful corrective action has been evidenced so far. This has necessitated the imposition of business restrictions with immediate effect, in the overall interest of customers.” https://m.rbi.org.in//scripts/BS_PressReleaseDisplay.aspx?prid=57444

RBI bans IIFL finance from gold loan business due to regulatory violations https://www.vccircle.com/rbibars-fairfax-backed-iifl-finance-from-sanctioning-disbursing-gold-loans

Great article! @gfp thanks a lot for sharing. You have been very valuable member on this board. Thanks for posts and I hope you continue to prosper and share your wisdom with us. I hope medical school doesn’t increase fees and other expenses going forward too much such that this gift can benefit large numbers of doctors and hopefully inspire them for further philanthropy.

Welcome Charlie!! Great first post and hopefully many more to come. Wow!! 85 bagger over 33 years! Nice returns of 4 bagger and 2.5 bagger for 12 and last 4 years. Not sure how much of net worth people felt comfortable putting in Berkshire in early years especially when Buffett was hitting it out of the park but Berkshire investment had key man risk. Not sure if I would have felt tempted to reduce position after great returns over 5-10 year period. @charlieruane How did you made decision about holding Berkshire during 1998-2000 period? Was just ignoring daily prices or potential taxes or investment opportunities after paying taxes of gains were not interesting? I started holding it from 2015 and slowly built it over last few years. It seems much less risky to own it now as even in 2015 Buffett was playing in his extra time. I felt comfortable about it succeeding beyond Buffett as well.

Yeah Mr. Buffett definitely seems to have soured on investing additional sums in BHE and BNSF given the regulatory environment. He also highlighted the fact that "Berkshire does not currently pay dividends". Going back to last 5 letters from 2018 onwards, dividend was only reference when Berkshire was receiving dividends from investee or subsidiary. May be with rising valuation, reduced investment and acquisition opportunities, rising net equity sales, growing cash flows and cash balances, Berkshire dividend might be coming in 12-24 months.

Looks like Berkshire total asset base will cross 1 trillion this quarter. Market cap should follow it in 2025.

Another purchase of 3.46M shares for around $200M. https://www.sec.gov/Archives/edgar/data/315090/000089924323013283/xslF345X04/doc4.xml Now ownership at 24.4%.

As per annual letter BIAL generated ROE of 14% for 2nd control period. Not sure how relevant is 17% ROE of 1st control period when management wasn't involved. Certainly less than 16% ROE assured by regulators. Is comparison with S&P BSE Sensex 30 performance appropriate for Fairfax India? Would it be better to compare results with BSE Small cap index considering size of most investments? BSE Small cap Index performance from 01-30-2015 to 03-13-2023 is around 8.6% with dividend reinvested. This is actual price performance which is beating price performance of Fairfax India handily and even edging privately marked book value.

I feel annual letter adds too many details not relevant for shareholders while skipping important details. It mentions that "The tariff order for the second control period (from April 2016 to March 2021) was finalized by AERA in August 2018, well after the control period had begun." Isn't this weird that fees to be charged for the period are determined by the regulator for the 2.5 years after the actual period has began? I hardly find things are improving markedly in India in terms of government bureaucracy if it takes 2.5 year to decide tariff to be charged. Annual letter fails to inform tariff order for the 3rd control period even when it has already been approved by government and came in below the amount requested by BIAL. I found omission of this detail very perplexing. Regulator did better job of deciding new tariff for the 3rd period (Apr 2021 to March 2026) only 4 months after the period began. Even with new tariff for the 3rd control period, what will be the revenue for BIAL? It seems current revenue is around 200 million. Even if it doubles to 400 million, isn't airport trading at huge multiple of P/S to come up with valuation of $2.4-3 billion? Real estate and infrastructure development will be time consuming and tedious process in India which can easily take 3-5 years to add meaningful cash flow. Most of the investments made since 2018 have not generated good returns so far. Book value growth is determined to large extent by BIAL and Sanmar valuations but those valuation seems stretched. Even Sanmar investment has been done at the holding company level which also included Egyptian operation. Not sure if anyone has more insight into valuation of that Sanmar holding company and leverage at the Egyptian operation.

That's a great news. I felt company's projection about increase in traffic were too conservative as it enables them to ask for higher fee/passengers from regulator. If traffic turns out to be higher/lower than expected then rates are supposed to be adjusted after 2.5 year during the 5 year assessment period. As with most of the things in government and especially with Indian government these mid cycle evaluation can take 2-3 years. Hopefully higher passenger growth will lead to higher cashflows in near term and easing with debt burden.

Fairfax to sell stake in Bengaluru airport for $1.5bn https://www.livemint.com/companies/news/fairfax-eyes-1-5-bn-in-bangalore-airport-exit-11666808036906.html Not sure if the news is true.