Viking Posted July 14, 2021 Share Posted July 14, 2021 (edited) I updated my spreadsheet for Fairfax India equity holdings (to June 30) and it looks to me like Fairfax India is sitting on about $1/share in gains (pre tax) from their publicly traded positions. Book value finished Q1 at $17.98 so we should see BV close to $19 when they report Q2 results. Shares closed today at $13.05 = 0.7 x Q2 BV. It is impressive how well the publicly traded equity holdings are performing given the covid situation in India. (And it looks like the publicly traded equities are up another +$100 million 2 weeks into Q3 so BV is likely close to $20 as of July 13.) Q3 is shaping up to be a very active quarter for Fairfax India. There is the share buyback/dutch auction, two potential IPO’s (Seven Islands and Sanmar) and the Anchorage transaction. These transactions, in aggreggate, should propel BV higher yet to over $20/share). The big event that closed in Q2 was the sale of Privi for $165 million. Increasing the ownership in Fairchem to 66.7% at the end of April was well timed as it has since doubled in price. The pending transaction is the Dutch auction to repurchase $105 million in Fairfax India shares. This will remove about 5% of shares outstanding at a price significantly below BV (max paid is $15) so this will be accretive for remaining shareholders (boost BV/share by about 1%). This transaction will close in August. Fairfax India currently values their 48.5% stake in Seven Islands at $107 million. This should increase nicely post IPO as 2020 was a very good year for the tanker company. The Sanmar stake is currently valued at $338 million; i am not sure what to expect with this IPO as Sanmar has had its challenges especially during covid. The 800 pound gorilla is BIAL and the ever delayed Anchorage transaction. Perhaps Q3 will see the deal finally get done (approved by regulator). Perhaps we also get some clarity on the sale of the governments stake in BIAL. This one asset comprises about 40% of the BV of Fairfax India so it bears watching closely. And of course, the plan is to also spin Anchorage off as an IPO. This IPO will likely be a significant catalyst for Fairfax India shares - this is when we find out if BIAL is worth $1.395 billion (Fairfax India’s 54% interest). If BIAL is properly valued then Fairfax India is crazy cheap at current prices. And if Fairfax India’s stake in BIAL is actually undervalued at $1.395 well... Fairfax India shareholders can dream The really interesting thing to me about Fairfax India is all the positive catalysts to drive the share price higher are in play and plain for everyone to see. Buying back 5% of shares outstanding at well below BV. Their publicly traded equity holdings are hitting the ball out of the park (very well managed companies with a share price that is shooting higher). Two IPO’s are in the works and once completed there is a good chance Fairfax India will see its fair value estimates move higher. Completing the Anchorage transaction will then allow for the IPO to happen. Chug, chug, chug... Fairfax Equity Holdings June 30 2021.xlsx Edited July 14, 2021 by Viking Link to comment Share on other sites More sharing options...
glider3834 Posted July 14, 2021 Share Posted July 14, 2021 12 minutes ago, Viking said: I updated my spreadsheet for Fairfax India equity holdings (to June 30) and it looks to me like Fairfax India is sitting on about $1/share in gains (pre tax) from their publicly traded positions. Book value finished Q1 at $17.98 so we should see BV close to $19 when they report Q2 results. Shares closed today at $13.05 = 0.7 x Q2 BV. It is impressive how well the publicly traded equity holdings are performing given the covid situation in India. (And it looks like the publicly traded equities are up another +$100 million 2 weeks into Q3 so BV is likely close to $20 as of July 13.) Q3 is shaping up to be a very active quarter for Fairfax India. There is the share buyback/dutch auction, two potential IPO’s (Seven Islands and Sanmar) and the Anchorage transaction. These transactions, in aggreggate, should propel BV higher yet to over $20/share). The big event that closed in Q2 was the sale of Privi for $166 million. Increasing the ownership in Fairchem to 66.7% at the end of April was well timed as it has since doubled in price. The pending transaction is the Dutch auction to repurchase $100 million in Fairfax India shares. This will remove about 5% of shares outstanding at a price significantly below BV (max paid is $15) so this will be very accretive for remaining shareholders. This transaction will close in August. Fairfax India currently values their 48.5% stake in Seven Islands at $107 million. This should increase nicely post IPO as 2020 was a very good year for the tanker company. The Sanmar stake is currently valued at $338 million; i am not sure what to expect with this IPO as Sanmar has had its challenges especially during covid. The 800 pound gorilla is BIAL and the ever delayed Anchorage transaction. Perhaps Q3 will see the deal finally get done (approved by regulator). Perhaps we also get some clarity on the sale of the governments stake in BIAL. This one asset comprises about 40% of the BV of Fairfax India so it bears watching closely. And of course, the plan is to also spin Anchorage off as an IPO. This IPO will likely be a significant catalyst for Fairfax India shares - this is when we find out if BIAL is worth $1.395 billion (Fairfax India’s 54% interest). If BIAL is properly valued then Fairfax India is crazy cheap at current prices. And if Fairfax India’s stake in BIAL is actually undervalued at $1.395 well... Fairfax India shareholders can dream The really interesting thing to me about Fairfax India is all the positive catalysts to drive the share price higher are in play and plain for everyone to see. Buying back 5% of shares outstanding at well below BV. Their publicly traded equity holdings are hitting the ball out of the park (very well managed companies with a share price that is shooting higher). Two IPO’s are in the works and once completed there is a good chance Fairfax India will see its fair value estimates move higher. Completing the Anchorage transaction will then allow for the IPO to happen. Chug, chug, chug... Fairfax Equity Holdings June 30 2021.xlsx 119.12 kB · 0 downloads Yes Viking definitely a lot of positive catalysts for Fairfax India and FFH is carrying their position in Fairfax India at around $9.66 per share (at 31 Dec-20) which looks to be close to 50% of Fairfax India's book value if it is around $18-19 which does not even capture potential appreciation from BIAL & other privately owned investments. With BIAL, I suspect they will be patient with the IPO & they have said it will be IPO'd subject to 'market conditions'. Hopefully they can increase their stake in BIAL by bidding for the govt stake & then deferring the listing at least until covid situation (3rd wave) settles down. THat would then set the stage for hopefully a successful IPO and also reduce any risk of OMERS exercising their ratchet clause. Link to comment Share on other sites More sharing options...
glider3834 Posted July 14, 2021 Share Posted July 14, 2021 1 minute ago, glider3834 said: capture potential appreciation from BIAL & other privately owned investments. I meant to say 'potential appreciation from the listing of BIAL & other privately owned investments' Link to comment Share on other sites More sharing options...
valueinvesting101 Posted July 15, 2021 Share Posted July 15, 2021 https://www.livemint.com/market/ipo/zomato-tatva-chintan-chemplast-sanmar-get-sebi-nod-to-raise-funds-via-ipo-11625490797220.html Chemplast Sanmar has filed DRHP with SEBI on 2 May. Chemplast Sanmar's IPO, which is backed by Canadian billionaire Prem Watsa, consist of a fresh issue of ₹1500 crore and an offer for sale of ₹2000 crore by its current promoters and shareholders. An offer for sale comprises sale of ₹1850 crore by Sanmar Holdings Ltd, ₹150 crore by Sanmar Engineering Services Ltd Link to comment Share on other sites More sharing options...
ICUMD Posted July 29, 2021 Share Posted July 29, 2021 Great results. BV $19.26 Share price $13.50. That's a pretty steep disconnect. Especially when paying performance fees on the BV increase AND FIH buying back shares at less than book. It also doesn't take into account the IPOs of Anchorage and Seven Islands which would likely send the BV higher. So, any guesses how long it will take to bridge this gap?! Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted July 30, 2021 Share Posted July 30, 2021 16 hours ago, ICUMD said: Great results. BV $19.26 Share price $13.50. That's a pretty steep disconnect. Especially when paying performance fees on the BV increase AND FIH buying back shares at less than book. It also doesn't take into account the IPOs of Anchorage and Seven Islands which would likely send the BV higher. So, any guesses how long it will take to bridge this gap?! Who knows. The gap has been there since pre-covid when BV was estimated to be ~$16-17 and shares traded for $12-13. I'm tendering my shares at various strikes with the hope the share price remains flattish below those strikes and I can buy the position back. I only have the confidence to do this because the discount has been so persistent. Link to comment Share on other sites More sharing options...
Viking Posted August 1, 2021 Share Posted August 1, 2021 (edited) Fairfax India’s publicly traded stocks have been on fire for the past 9 months. And since June 30 my quick math says they are up another $150 million ($1/share increase in BV) with the IIFL triplets leading the way. All of Fairfax’s investments in India have been performing exceptionally well (Fairfax India, Quess, Thomas Cook) since Nov of last year. Is the Indian stock market getting a little bubbly? Or is it a situation where the stocks were crazy cheap and they are now more fairly valued? The performance of the Indian stock market the past 6 months has been a surprise to me given how hard the Delta variant hit the country. The dutch auction for Fairfax India shares closes this week. It will be interesting to see what prices they pay for shares. And where Fairfax India shares trade after the auction closes. With Aug 1 BV of $20 and shares trading at $13.20 it certainly is a head scratcher for me. Sanmar and Seven Island IPO’s could boost BV higher when they happen. And the Anchorage transaction is another wild card. Bottom line, lots of catalysts which is encouraging. I hope management at Fairfax India continues to be aggressive with share buybacks after the Dutch auction is completed. Soak up all the shares they can at $13 Given how cheap Fairfax India shares are trading, that has to be the best use of cash for management right now. This is also a big win for Fairfax as their ownership stake increases materially. Edited August 1, 2021 by Viking Link to comment Share on other sites More sharing options...
valueinvesting101 Posted August 5, 2021 Share Posted August 5, 2021 (edited) Chemplast Sanmar Limited IPO opens on August 10. https://www.globenewswire.com/news-release/2021/08/05/2275506/0/en/Fairfax-India-Announces-Filing-of-Prospectus-by-Chemplast-Sanmar-Limited.html Fairfax India -> Sanmar Chemicals Group (42.9% equity interest) -> Chemplast Sanmar Limited IPO ( 23.6% indirect equity interest after IPO for Fairfax India) Looks like they will also own stake in the Egyptian operation via Sanmar but CSL being IPOed will not have that. Seems bit complicated and can lead to conflict of interest between listed entity CSL and privately owned Egyptian operation. Edited August 5, 2021 by valueinvesting101 Link to comment Share on other sites More sharing options...
ICUMD Posted August 5, 2021 Share Posted August 5, 2021 2 hours ago, valueinvesting101 said: Chemplast Sanmar Limited IPO opens on August 10. https://www.globenewswire.com/news-release/2021/08/05/2275506/0/en/Fairfax-India-Announces-Filing-of-Prospectus-by-Chemplast-Sanmar-Limited.html Fairfax India -> Sanmar Chemicals Group (42.9% equity interest) -> Chemplast Sanmar Limited IPO ( 23.6% indirect equity interest after IPO for Fairfax India) Looks like they will also own stake in the Egyptian operation via Sanmar but CSL being IPOed will not have that. Seems bit complicated and can lead to conflict of interest between listed entity CSL and privately owned Egyptian operation. Looks like the IPO funds will be towards paying off debt. https://www.livemint.com/market/ipo/chemplast-sankar-fixes-ipo-price-band-at-530-541-per-share-11628133305178.html Link to comment Share on other sites More sharing options...
Viking Posted August 5, 2021 Share Posted August 5, 2021 From my limited research on Fairfax India, Sanmar was the only large holding that looked concerning. If it is able to raise $500 million next week and pay down high cost debt then that looks like a significant win (compared to the $ coming from Fairfax… which perhaps would have been what happened a few years ago). We will see where the shares trade post IPO. I do like the added visibility with the shares soon to be publicly traded. ———————— From the article: The NCDs of ₹1,270 crore were issued by the company in multiple tranches in December 2019 at a coupon of 17.50% per annum payable monthly and have a scheduled tenor of up to seven years from the deemed date of allotment. "The early redemption of the NCDs in full will help reduce our outstanding indebtedness and debt servicing costs, assist us in maintaining a favorable debt to equity ratio and enable utilisation of our internal accruals for further investment in business growth and expansion", the company said in a DRHP. "In addition, we believe that our improved leverage ratio, consequent to such redemption of NCDs, will improve our ability to raise debt in the future to fund potential business development opportunities and plans", the company added. Link to comment Share on other sites More sharing options...
Sullivcd Posted August 9, 2021 Share Posted August 9, 2021 4.7% of outstanding shares taken out at $14.90 a share. Bumps book value up to $20 a share. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 9, 2021 Share Posted August 9, 2021 27 minutes ago, Sullivcd said: 4.7% of outstanding shares taken out at $14.90 a share. Bumps book value up to $20 a share. Not a bad return on the shares I bought solely to tender. Will be happy if I can use the proceeds to buy them back at the current price of ~$14. Link to comment Share on other sites More sharing options...
hobbit Posted August 9, 2021 Share Posted August 9, 2021 (edited) Sanmar Look at the finance costs for 2021 . This should drop drastically post IPO. Essentially there ipo price is at almost half the P/e of their peers. https://twitter.com/nbalajiv/status/1424426082002882561?s=20 Edited August 9, 2021 by hobbit Link to comment Share on other sites More sharing options...
ICUMD Posted August 11, 2021 Share Posted August 11, 2021 On 8/9/2021 at 2:56 PM, hobbit said: Sanmar Look at the finance costs for 2021 . This should drop drastically post IPO. Essentially there ipo price is at almost half the P/e of their peers. https://twitter.com/nbalajiv/status/1424426082002882561?s=20 So far so good. It appears Sanmar has sold about 50% of their IPO allotment at 541Rs. https://www.moneycontrol.com/news/business/ipo/chemplast-sanmar-mobilises-rs-1732-5-crore-from-anchor-investors-ahead-of-ipo-7300641.html Link to comment Share on other sites More sharing options...
MikeL Posted August 16, 2021 Share Posted August 16, 2021 (edited) Does anyone know when the tender result will show up in your account? Edited August 16, 2021 by MikeL grammar Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 24, 2021 Share Posted August 24, 2021 On 8/16/2021 at 9:54 AM, MikeL said: Does anyone know when the tender result will show up in your account? IB paid out my odd-lots on Monday. I'm still waiting for my other non odd-lots at Schwab to settle. Link to comment Share on other sites More sharing options...
MikeL Posted August 24, 2021 Share Posted August 24, 2021 Thanks. Got mine at RBC (Canada) several days ago. Link to comment Share on other sites More sharing options...
glider3834 Posted August 25, 2021 Share Posted August 25, 2021 India on Wednesday approved Canada’s Fairfax Financial Holdings Ltd’s proposal to invest ₹15,000 crore in infrastructure projects through its local arm, boosting the government’s efforts to kick-start its ambitious ₹6 lakh crore infrastructure asset monetization programme. The government statement said the investment will be a significant boost to the recently announced national monetization pipeline (NMP). “Anchorage Infrastructure Investment is proposing to make downstream investment in some of the sectors covered under the NMP,” according to the statement. It said the investment will considerably substantiate the Indian government’s plan to develop world-class airports and transport-related infrastructure through private partnerships. https://www.hindustantimes.com/business/govt-okays-15-000-cr-fdi-plan-101629925826989.html Link to comment Share on other sites More sharing options...
Viking Posted August 26, 2021 Share Posted August 26, 2021 It looks like Fairfax’s next big swing could be infrastructure in India. This swing will include partners like OMERS. What is the conversion of 15,000 crore? US $2 billion? Link to comment Share on other sites More sharing options...
Crip1 Posted August 26, 2021 Share Posted August 26, 2021 34 minutes ago, Viking said: It looks like Fairfax’s next big swing could be infrastructure in India. This swing will include partners like OMERS. What is the conversion of 15,000 crore? US $2 billion? Yup, more or less. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 2, 2021 Share Posted September 2, 2021 On 8/24/2021 at 3:20 PM, TwoCitiesCapital said: IB paid out my odd-lots on Monday. I'm still waiting for my other non odd-lots at Schwab to settle. Anyone have Schwab and know when this is going to pay? Just seems strange that I was paid out on IB over 10 days ago and still waiting for Schwab. Schwab representatives were less than helpful in giving me an ETA and basically said they don't know as it is Computershare processing. Link to comment Share on other sites More sharing options...
obtuse_investor Posted September 2, 2021 Share Posted September 2, 2021 6 minutes ago, TwoCitiesCapital said: Anyone have Schwab and know when this is going to pay? Just seems strange that I was paid out on IB over 10 days ago and still waiting for Schwab. Schwab representatives were less than helpful in giving me an ETA and basically said they don't know as it is Computershare processing. Maybe we are witnessing Computershare’s float in action. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 2, 2021 Share Posted September 2, 2021 1 hour ago, obtuse_investor said: Maybe we are witnessing Computershare’s float in action. Maybe just another checkmark in IB's favor. I know there's a thread where people were hating all over IB awhile back. They do have some of their own issues, but seem vastly better than any other broker I work with. This is just another example of them excelling where others are marginal and mediocre. Link to comment Share on other sites More sharing options...
glider3834 Posted September 8, 2021 Share Posted September 8, 2021 https://www.fairfaxindia.ca/news/press-releases/press-release-details/2021/Fairfax-India-Receives-All-Regulatory-Approvals-to-Complete-Sale-of-Minority-Position-of-Anchorage-Infrastructure/default.aspx Link to comment Share on other sites More sharing options...
Viking Posted September 8, 2021 Share Posted September 8, 2021 (edited) 50 minutes ago, glider3834 said: https://www.fairfaxindia.ca/news/press-releases/press-release-details/2021/Fairfax-India-Receives-All-Regulatory-Approvals-to-Complete-Sale-of-Minority-Position-of-Anchorage-Infrastructure/default.aspx I like that these previously announced deals are finally getting closed (Riverstone sale by Fairfax was another). It will be interesting to see where Fairfax India takes Anchorage from here. It will also be interesting to see what Fairfax India does with the proceeds of $129 million. Chug, chug, chug… Edited September 8, 2021 by Viking Link to comment Share on other sites More sharing options...
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