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@SafetyinNumbers 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.

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.

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?

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.

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.

https://www.business-standard.com/companies/news/canada-based-firm-fairfax-offers-all-cash-deal-to-acquire-idbi-bank-124031800325_1.html

Mine: Use active excess cash flow to Increase net passive cash flow

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.

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.

Interesting that Fairfax India is potentially becoming a lender to a lender, IIFL. Hopefully they manage the risk appropriately.

Hopefully Anchorage gets the same approval. Now Fairfax has a track record of obtaining IPO clearance in the local market.

Sounds like the WeWork fiasco.

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.

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.

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.

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!

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.

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.

You've had a change of heart on Valentine's. LoL

Perhaps a good part of that $260 B in real estate is in unfinished homes. Seems like Evergrande faced a liquidity crisis. Not sure the partially finished homes in ghost towns have any residual value. These ghost towns have likely been deteriorating over years, likely becoming negative equity (liabilities) so to speak. I don't think money was intentionally stolen from bond holders and risk getting black listed on the bond market permanently.

The wager here is that if the CCP wants to get the donkey (economy) to move, they will now need to dangle more than a single carrot. It's not just a 'want' anymore, but a need. They have no alternative. Countries like China cannot progress without FDI. They are getting desperate. Let's see what treats they have in store. Things are bound to get worse before they get better.

Modi commands a crowd today that no other leader can. He's basically inspiring the country and millions of diaspora around the world to achieve what was previously impossible. Under his leadership, India is that economic snowball lifting people out of poverty and inspiring them on an individual level. You don't have to understand what he says, you just have to listen and see the reaction of the crowds.

@dartmonkey Thanks for writing this detailed explanation. Your rationale and explanation make sense. However, we can't be certain that is how they are actually calculating the fee, as there are slight discrepancies. I wonder if it would be reasonable to submit your assumption to Fairfax India investor relations for confirmation or clarification. Really, they should offer an appendix showing their calculation to the annual report, at the end of each 3 yr period.

Thanks for the above posts. I certainly understand the rebalancing and exposure rationale for indexing. For discussion, I note the PE ratio of the S&P 500 to be averaging around 25. The tech sector is arguably loftily valued currently and the index is heavily weighted in this sector. PE of 25 doesn't seem like a value proposition currently. As a value investor, how does one seek value in an ETF? Or do you just average in?

@MMM20 Unable to access the file. Are you able to summarize the punch line? Thx!