ICUMD

Agree with the 20 M liquid asset definition of Rich. Over 100M is Ultra rich.

Of course. But assuming the discount is real (and I personally do), ultimately these large block trades should translate into the gap closing. They are happening frequently enough and in sizeable amounts relative to the shares outstanding. Also safe to assume that if the buyer is Fairfax, they will not resell them at a discount on the market.

Another block trade today of 335k shares, total trade of about 370k shares. At least someone seems to be think this is undervalued. Maybe FIH trying to close the gap to BV to strengthen its position?

I'd posit that small investments can sometimes present compounding opportunity. Also, they have had a good record for choosing quality private Indian companies and realizing value. BIAL is definitely the key gem in FIH. Agree that IDBI is an elephant that will be difficult to digest. It will definitely be a test of management to see how they navigate this.

I was reasoning the opposite, that the discount would close since IDBI is a listed company. By purchasing it, more of Fairfax India's holdings will be publicly valued and therefore we would get a stronger calculation on book value. I agree, raising so much money is not an easy feat for a small company. OTOH, if parent Fairfax buys IDBI, what is the reason for even having Fairfax India? Maybe they should simply buyout Fairfax India and carry on with their India investments using deeper pockets.

Not an expert, but they could offer buyouts to partners over time. Anchorage listing would raise funds also. They could also sell certain holdings. Share issuance is likely not on the table due to depressed stock price. I would think they have a solid plan if they are bidding. They are well respected and have been able to raise funds in the past. They refused to comment specifically on the IDBI bid at the AGM, so of course, it's all guesses.

They have indicated that they will obtain partners, which could include the parent company- Fairfax, to make the purchase.

Could be a number of reasons. 1. Allow for a longer runway to raise funds and do a gradual buyout over a few years. 2. Keep management and branding separate for CSB and IDBI. They operate in different spheres. 3. Independent bank licenses are better than one for bank listing.

Hard to fully anticipate, but I suspect iDBI is a prized asset. Either Kotak or Fairfax will work with officials to discuss options to make the buyout possible, rather than walk away. Maybe it does mean that Fairfax needs to join CSB with IDBI. Now just a hunch, but RBI could prefer the Fairfax India offer since Kotak is much larger than CSB. 2 large banks (Kotak + IDBI) combining would undermine competition vs a smaller bank (CSB) and larger (IDBI). They may also wish to attract more foreign ownership in banking.

IDBI https://www.thehindubusinessline.com/money-and-banking/kotak-vs-watsa-the-battle-for-acquiring-idbi-bank-intensifies/article66850311.ece Looks like Fairfax India is in a strong running position for IDBI bank, results anticipated for June. Adding a bank of this size to the Fairfax India portfolio would be an incredible deal. Well positioning the company in an important growth niche in coming years. Thoughts?

I'll add that this is a very thinly traded company. Not a lot of awareness and interest presently. Stock price is fairly meaningless in this sense. Lots of investors are tired of waiting for share price appreciation or are skeptical. These are the traded shares that are determining stock price - at depressed levels. Conversely, this allows Prem to be highly opportunistic at current levels. Don't forget he bought back substantially during the Dutch auction at $14.90. Despite excellent progress in the company, it's share price today is $12-13, where he continues to buy.

Don't think Prem is purposely managing the Fairfax India investment in that sense. I think he's really just doing what any value investor in his shoes would be doing- buying back shares since he sees it as undervalued. For example, BIAL is valued privately based on Fairfax's internal valuation model. Prospective shareholders of Fairfax India may choose to agree or disagree with that book value and price the shares accordingly. Over 60% of it's holdings are private I believe. This makes valuation is somewhat arbitrary. So maybe the market thinks book value overvalues the company hence the discount?

FIH itself is currently a concentrated play on BIAL. (This may change if they go elephant hunting for IDBI) BIAL has a lot going for it with COVID behind: Demographics - accessing 30-50 million passengers per yr is a tremendous opportunity for monetization. Growing wealth effect FDI bringing tech to Bangalore like Foxconn Favorable regulated rates of return on aero and non regulated in non aero activities Land monetization etc. The buildout of T2 shows how quickly they are progressing and management prowess. Land development is also moving at a good clip. India is at least 20 yrs behind China, but favorable developments so far geopolitically and demographically. Tech companies will be transformative in India. I still think of FIH as a venture capital/ closed end fund planting seeds of investment in India. BIAL I think is starting to bloom. Just not yet fully appreciated.

In the hopefully near term, it's an arbitrage opportunity for when BIAL goes public through a listing of Anchorage. In the longer term, it's a demographic growth play. Regardless, the value is there if you have the patience. Management is solid. Lots of quality holdings. Discount more than covers the fees. A deep pocketed investor could mark this thing to book in short order. It's not a hype stock by any stretch. More like 'watching paint dry' I'd say.

They are definitely following through with accreting value through share buybacks and buying another 10% BIAL. Either they have got it wrong or the market is severely underpricing this thing. I'm guessing the latter. A job well done by management. Anchorage IPO will unlock value.

Interesting. I wonder how such a trade happens on a thinly traded equity without causing share price to increase. Maybe a pre arranged deal?

Aviation in India BBC News - Air India, IndiGo: New record as 456,000 Indians take flights in a day https://www.bbc.co.uk/news/world-asia-india-65334390

China's aspiration is to dominate economically and technologically. Going to war over Taiwan would compromise both goals and it has in Russia. Literally, it would set them back decades. I highly doubt they would risk such a setback. Rhetoric, posturing and political chess games will continue.

Indeed. Racial segregation is a waste of energy and resources. Countries that encourage diversity prosper most, like USA and Canada where many a Fortune 500 is run by a visible minority. China is lacking in this regard. India, well racism there is a whole different story.

One of the most unfortunate events in my opinion was the partition of India into India and Pakistan in 1947. A division of territory based on religious faith: Hindu or Muslim. Muslim separatists 'won' their own territory in gaining Pakistan in 1947. Orthodox Hindu's feel India is theirs.

I attended the Fairfax India meeting online. Not a lot has changed from last year. Airport is doing very well and expanding at a brisk rate. They reinterated how it remains undervalued in their opinion. Bottleneck is lack of aircraft, not fliers. It seemed that they are hoping Air India will make it their base. Plan is for 90 million PPA by 2030. They have 350M in cash awaiting new opportunities. They refrained from commenting on IDBI since it's under discussion. Large acquisitions would require partnerships for additional capital rather than stock sale due to depressed stock price. Interestingly, they mentioned that if they were going for an outsized purchase, they could possibly partner with Fairfax, amongst others. Some people inquired about the depressed stock price. They basically said that it's a value play at these levels. Some creative ideas in the audience about how to potentially incr stock price. All other holdings are doing well except ncml.

Not disagreeing with you. Any shareholder of any company can be wiped out. Having said that, I'd argue a JPM or BAC failure wiping out shareholders and uninsured deposits, would cause severe financial unrest and undermine central banks and government. Pensions, trusts and corporations would fail also. There is therefore a vested interest to avoid/bailout/backstop such situations. I think this is exceedingly unlikely in USA and Canada. But for those that are worried about this possibility, crypto, gold and hard assets may be attractive alternatives.

Bank quality depends on their ability to manage risk through diversification and liquidity. Large banks and systemically important banks technically are backed by central banks and governments, so they are socialized in this way. Hence bailouts and deposit insurances. Further, they can have varied, highly profitable businesses spanning insurances, lending, credit cards and wealth management. I continue to hold a weighted portfolio in CDN banks, which form an oligopoly. In my estimation, the risk of a CDN bank failure is exceedingly low due to their diversified revenue base and recourse loan books. It is arguably a better business than insurance ala Fairfax/Berkshire alone, when done correctly. Long term CDN bank returns incl of dividends range in 8 - 14%.

CDN banks 36% Oil - SU 3.5% Utilities - FTS 23% Rail - CNR/CP 8.5% Asset Management - BN/BAM 3.5% Fairfax India - 15% Tech - Apple, Google, Broadcom - 8%

@dealraker Can't think of a company doesn't have a 20% drop from time to time. Tech are far worse - they get wiped out. CDN banks have an exceptional track record.