ICUMD
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Posts posted by ICUMD
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5 hours ago, rkbabang said:
, I look at people who had kids late and are my age with young kids and I feel so bad for them. They always look exhausted, that’s a young person’s game
@rkbabang Funny u should mention. I'm 48 with a 2 year old. Every day I'm thankful I'm doing this now rather than 20 yrs ago. Back then, I was so busy getting my career going that I doubt I would have been able to focus with studying, writing exams and manage kid expenses on a marginal income. The last 10 yrs, I had a chance to date and travel. Now, my career has plateaued, income and savings strong, I think I'm in a better position to raise a kid. Perhaps we justify our own reality?
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On 4/16/2024 at 9:17 AM, whatstheofficerproblem said:
- Hamas is actually quite genius, Haniyeh is a billionaire and lives in Qatar, like every other terrorist camp, the leader tells his subordinates to indulge in j!had & become mujah!deens to attain jahannum while the leader himself hides out and lives a life of luxury & indulgence.
Seems like Haniyeh, regardless of his billions, is not without suffering: from Wikipedia -
Haniyeh currently lives in Qatar.[59][60][61][62]
In October 2023, 14 members of his family were killed in an Israeli airstrike on his family home in Gaza City, among them a brother and nephew.[63] In November 2023, a granddaughter of his was reportedly killed in an Israeli airstrike in Gaza City.[64] Later that month his eldest grandson was killed in an Israeli strike.[65] Three of his sons and three grandchildren were killed in an Israeli airstrike in the Gaza Strip on 10 April 2024.[66] [6
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@giulio thanks for the excellent summary.
My main thoughts attending the meeting online were
1. Air India making BIAL a secondary hub is a game changer. All of a sudden you are guaranteed international connectivity and incr passenger volumes. This will translate into huge revenue streams, esp for their non aero businesses. International passengers have much deeper pockets than domestic, on average.
2. Financial services can grow faster than infrastructure developments. IDBI, if they can cinch the deal under Fairfax India, would be the next game changer. Hopefully announcement on this will happen after Indian elections close in June.
3. Anchorage
Doesn't seem to be a huge priority, though I could be mistaken.
4. SIB
Doesn't seem to be in the works.
They are apparently happy picking up shares on the market.
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Bought a little BCE.
BCE owns the telecom infrastructure.
Forced competition and cost reduction will slow build out of fibre to small communities. Ultimately, this company needs to survive and expand and all Canadians need to be connected.
Political interference can only go so far.
Starlink and satellite Internet are bandwidth constrained relative to fibre. (I know, since I have Starlink and wish I had fibre).
Hard not to add at these levels and dividend is highly attractive.
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7 hours ago, This2ShallPass said:
"Because of the significant underachievement of passenger traffic in the last year of the second control period and the intended completion of capital projects during the third control period (from April 2021 to March 2026), UDFs were expected to increase significantly in the third control period.With the higher UDFs and the ultimate return of passenger volumes to pre-pandemic growth levels, aero revenue was expected to return to normal levels at some point during the fiscal year ending March 2024. Based on current traffic volumes, this looks likely to happen."
From annual letter. We are 3 years into the third control period, when they say UDFs are expected to increase, do they not know yet or am I reading too much into it? I wouldn't be surprised given India's lumbering bureaucracy..
I've also not been able to get clarity on whether or not the UDFs were being recalculated in each control period as per the contractual agreement.
In their reports, there is never any confirmation the UDF was paid as per the agreement. Only vague statements. Recalculation was especially important during the pandemic.
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BNS.to
6.2% yield from a Canadian Charter bank, hard to pass up. Personally loaded up to the brim sub 60s.
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Appreciate the counterarguments. I've been too optimistic previously so its good to have expectations tempered.
Still not convinced the sidecar model is the way Fairfax will go since I think ultimately they will want to outright own BIAL and IDBI, which can most swiftly accomplished with FIH going private.
Potential investment partners will face regulatory hurdles possibly scuttling a deal or introducing delays.
FIHs market cap of 2 B means they are going elephant hunting for a 6 B IDBI with a pistol. Yes, they can use credit lines and sell assets, but still will fall considerably short.
Some reports say IDBI will sell expensive, maybe around 2x BV. Government of India needs to make this look like a good deal on their end. Indian markets are strong, so not expecting a fire sale here.
Yes privatization will mean FFH will have to give up the management fees that Fairfax India generates for them. So that is the negative and maybe the reason why privatization won't happen.
Long run, my wager is outright ownership outweighs the fee structure benefits for FFH. Prem outright owning two prized Indian assets will be a tremendous source of pride for him.
I think we can agree the next 12 months will be interesting none the less.
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6 minutes ago, SafetyinNumbers said:
With respect to IDBI, why is a sidecar structure not considered a possibility? Shouldn’t that be a giant catalyst for the shares as the fees generated offset a lot of the other fees paid to FFH? It’s probably the most popular reason I hear for avoiding FIH. I think that’s much more likely than FIH being taken private. Either way, shouldn’t either possibility be a reason to buy the stock at current levels? I’m dismissing outright the odds of an equity issue below BV.
You raise lots of great points, and I'm just presenting one scenario for arguments sake.
I'll address your Sidecar thesis:
Fairfax India has no money now after their 200M has been earmarked to back stop IIFL, if my accounting is correct. Yet they have soon thereafter confidently placed an all cash bid for IDBI.
They must already have a source of money lined up.
Seems to time well with their outperformance at FFH.
I personally doubt that they will find investors who will foot the majority of the bill for IDBI, and then pay heafty fees to FFH for management, based on an estimated BV, while trading at depressed values on the N. Amercan market.
The only investor to do so would be FFH.
Even Omers would be out.
Abu Dhabi investment fund or Siemens? Not a chance.
Dealing with these guys on such a large purchase would be a nightmare.
FFH buying IDBI directly is a possibility, but then they would be going back on their word that FIH is their non insurance investment vehicle in India.
In any case, I could be wrong, but buying out Fairfax India to make it private is what I would do under the circumstances. Once the Indian investment portfolio is more developed with acquisitions, option is always there to take it public again when it can act more favorably for raising capital.
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56 minutes ago, Viking said:
2.) i have long thought the ‘solution’ to Fairfax India’s big discount in recent years is for Fairfax to take it private. Step one - approach the remaining large shareholders and see if they are interested - and what price. Step two - take out remaining small shareholders - perhaps at BV.
Speculative, but Fairfax taking Fairfax India private is the best and most likely play.
Consider:
- Recent all cash offer for IDBI by Fairfax - the are serious bidders.
- BIAL is a jewel company with guaranteed return and growth. I suspect they view IDBI as another diamond in the rough. It probably is.
- They only coinvest with select pasive investors like OMERS. (They weren't too happy with GMR and paid a premium to kick them out of BIAL). Coinvestment only helps them manage their risk at the expense of their ownership and control. I doubt they will be keen to be part of a consortium to purchase IDBI when then can do so easily via FFH. Plus, they will need to share ownership with the government and LIC as it is.
- Fairfax India has performed poorly in North America, but Anchorage will truly value their Indian asset base. This I think will occur after they take Fairfax India private, since doing so before risks inflating the share price and increasing the price of a buyout.
- The only advantage I can see of Fairfax India trading publically is it's ability to raise capital through sale of shares. Ironically, due to depressed share price x 10 yrs now, they are now capital constrained to make large purchases, such as IDBI.
- They have used their 200M in the bank to back stop IIFL. They will need a billion or two in short order if they get IDBI.
- When your kid needs money in short order for a worthy venture, who is most likely to offer it?
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6 hours ago, Parsad said:
FFH is generally happier when they own the whole pizza, rather than a few slices.
In the meantime, they will bring in outside investors including some of their friends to fund the purchase of IDBI. Let's see where this $1B goes that they just raised.
Thanks Parsad,
If I were Prem, instead of inviting my investor friends to share another golden company that is IDBI, I would issue shares of FFH to buy FIH.U from existing investors to make it private, while conserving cash.
I would then use available cash to purchase IDBI.
That way I get to keep the whole pizza, including the airport.
I think this will happen sooner than later since IDBI divestment will happen within the next 12-24 months.
Of course, I own only Fairfax India, so I may be simply over optimistic.
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On 3/21/2024 at 4:08 PM, Viking said:
3.) The emerging question is what is Fairfax India's involvement with the bid for IDBI Bank? This would be a massive purchase. Where is the significant $ going to come from? And what does that mean for current Fairfax India shareholders? I am pretty sure Prem said at the AGM last year that Fairfax India would not be issuing any new shares for less than book value (perhaps someone else can confirm/deny this).
This is the billion dollar question.
Fairfax has said aside from insurance, Fairfax India will be the vehicle for all other investments in India. They have recently placed an all cash offer for IDBI bank. Where does the cash come from?
If they aren't issuing new shares at discounted market prices as previously stated, their only other option is to find an investment partner, like Omers.
Alternatively, could money laden Fairfax opt to buyout Fairfax India and take it private? They would then have deep enough pockets to chase IDBI. It would also optically solve their issue of discount.
Pretty sure Prem wants to close that IDBI deal badly.
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Mine:
- Use active excess cash flow to Increase net passive cash flow
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All of this is excellent imo. RBI oversight and review will help improve the quality and transparency of these businesses over the long run. This is necessary to attract FDI.
Through the vetting process, the value of underlying businesses increases.
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On 3/6/2024 at 5:17 PM, maplevalue said:
India’s Feet of Clay: How Modi’s Supremacy Will Hinder His Country’s Rise
https://www.foreignaffairs.com/india/indias-feet-clay-modi
A balanced article; thought there were quite a few similarities to Xi
Amongst his peer group, seems like a pretty good leader doing a great job. Not an easy task to lift a few hundred million out of poverty. Curious to read the critiques on Netanyahu, Putin, and Biden/Trump.
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Interesting that Fairfax India is potentially becoming a lender to a lender, IIFL.
Hopefully they manage the risk appropriately.
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Hopefully Anchorage gets the same approval.
Now Fairfax has a track record of obtaining IPO clearance in the local market.
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12 minutes ago, Hektor said:
Sounds like the WeWork fiasco.
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Great to see progress on this front.
BIAL becoming a southern hub for Air India should help ensure it's torrid growth in coming years.
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6 minutes ago, Gamecock-YT said:
A little too touristy for my taste. Crowded. Traffic was really bad and takes a long time to get anywhere. Locals who weren't working at a place of business weren't exactly friendly. Tough to get around if you didn't have your own transportation.
Probably compare it to visiting Phuket but Hindus instead of Muslims as the local populace.
Thanks for the heads up.
Crowds and traffic can be challenging for sure.
After being to India (and experiencing near death pushing a stalled car in traffic), tolerance is good.
North American travel is a bit too sterile for me, so looking forward to something substantially different.
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9 minutes ago, Gamecock-YT said:
Wasn't really a fan of Bali. Stayed in Nusa Dua, Sanur, Kuta, and Ubud. Read that Canggu/Seminyak had been taken over by instagram influencers/digital nomads so didn't bother. I think if I were to go back I'd try and get more north than Ubud or even just go across to Lombok/Gili Islands. Have some gado gado for me.
Interesting.
What were the negatives?
Going with the little one who's 1.5 yrs old.
So didn't want to go off the beaten path.
Have really enjoyed Thailand in the past, so expecting a similar experience.
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NSE is a great asset no doubt.
OTOH, they need to be able to raise cash for acquisitions. This can only happen through churning non core assets. Otherwise they have to use credit.
25M to 189M is a great capital gains.
Sell it and move on hopefully to something better!
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Great results overall I think.
They will have about 400M after the NSE sale, and about $288M after paying the performance fee in cash. Should allow some interesting acquisitions.
Trading at about 0.65 BV.
Hopefully they do more buybacks or announce the Anchorage listing. Bial is developing nicely, and is conservatively valued.
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Vacation booked in Bali at end of April.
Cangu, Seminyak and Ubud.
Seems like the dollar stretches decently since can rent villas with plunge pools for the price of modest hotels in N. America.
How old are you?
in General Discussion
Posted · Edited by ICUMD
I can imagine! I will admit though, you are right - age does catch up quickly with a person. Currently, I'm traveling through Bali with the wife and little one. As traffic and sidewalks here are insane, I'm carrying the baby in a front carrier during the daytime.
I literally had to train for this 2 months in advance doing yoga and push-ups like Rocky Balboa which has helped, but not completely mitigated back strain/pain.
It's a heck of fun though!
Btw, out of curiosity, how big is an Ericopoly sized portfolio?