Fairfax India new issue

[This2ShallPass]

11 hours ago, nwoodman said:

We shall see.  Fairfax seems happy to wait it out, so that’s good enough for me. 

Thanks for the detailed explanation.

 

8 hours ago, gfp said:

I had assumed they would accomplish bigger deal sizes by using some convoluted LP structure or friendly preferred co-investors but it seems to me like merging FIH.U into FFH is the cleanest solution and there is plenty of capital at the mother ship going forward.

Yes it's clean structure wise and lot of cash available at FFH. But would be a bummer for all us minorities holding for so many years. The other question is do they shelve the Anchorage IPO? I wouldn't be so bummed if they do the merger some time after Anchorage so everyone can profit from the airport's market value..

 

[mananainvesting]

 

[villainx]

Does Michael Fritzell post on this forum?  

[gfp]

General update on markets in India - it is unusual for charts to look this perfectly bad, but we could be getting closer to a bottom in the sensex.  Fairfax india shareholders need to keep an eye on the currency - it could get worse than it has been.

 

 

[mananainvesting]

Bangalore Airport: https://www.financialexpress.com/business/airlines-aviation-bengaluru-airport-unveils-greenfield-domestic-cargo-terminal-3762639/?ref=morelatest_hp

 

[gfp]

Gopal and Ben's annual letter to Fairfax India owners is here ->

 

https://www.fairfaxindia.ca/wp-content/uploads/2025/03/Shareholders-Letter-2024.pdf

[Hektor]

Thanks @gfp. Interesting read.

[nwoodman]

Speculation that final bids for IDBI will be in by June.

 

https://www.financialexpress.com/business/banking-finance-financial-bids-for-idbi-bank-by-june-3775882/

[thowed]

Just did my votes for the Annual Meeting.  I didn't realise quite how many Directors there were!  Can anyone justify this?  Feels like quite a lot of costs for an investment fund.

 

I say this as a general fan and holder of FFH and FIH.

[This2ShallPass]

"Fairfax India intends to complete an IPO of Anchorage, although we did not move forward on this in 2024 as we are still in the process of obtaining regulatory approvals."

 

It's the only thing they said about the IPO in the annual letter. I was just thinking about this today, BIAL is not the first airport to be listed, so why this huge delay of many years in getting approval? 

 

[Junior R]

6 hours ago, This2ShallPass said:

"Fairfax India intends to complete an IPO of Anchorage, although we did not move forward on this in 2024 as we are still in the process of obtaining regulatory approvals."

 

It's the only thing they said about the IPO in the annual letter. I was just thinking about this today, BIAL is not the first airport to be listed, so why this huge delay of many years in getting approval? 

 

India has alot of regulation so you need to satisfy them and I think Fairfax stated once you statisfy one a new one comes up 

[Hsmpanl]

Nice selloff today and opportunity to add. Not seeing any news, this just forex movements or is anyone tracking anything new?

[Cod Liver Oil]

My friends who have half their fund in India visit  twice per year and say it takes eons to get anything done there.

[hardcorevalue]

Might wait to see if it hits $12 or $13 again before adding. 

 

I think a lot of investors are getting up fed waiting. 

With those comments in Ben's letter it seems no IPO coming in 2025. 

[Crip1]

58 minutes ago, Hsmpanl said:

Nice selloff today and opportunity to add. Not seeing any news, this just forex movements or is anyone tracking anything new?

I missed this last week but was able to catch a low quote today to add another 11% to my holdings, which now moves FFHI from #3 holding to #2.

 

-Crip

[Crip1]

6 minutes ago, hardcorevalue said:

Might wait to see if it hits $12 or $13 again before adding. 

 

I think a lot of investors are getting up fed waiting. 

With those comments in Ben's letter it seems no IPO coming in 2025. 

Maybe you’re right on the timing of the IPO, or maybe you’re inferring more than what’s there. Either way, the fact of the matter is that whether or not the IPO happens in ’25, ’26 or ’27, what’s less debatable is that the intrinsic value of FFHI continues to increase. BAIL, unless something unforeseeable happens, is going to be worth more in March of 2026 than it is currently in March of 2025. That only makes the IPO more attractive. So I am OK with letting this sit and increase in value for the next 12-24 months, even if the stock price does not reflect this. And to the extent we get buying opportunities like we’ve seen in the past few weeks, any dry powder can be used to buy more.

 

-Crip

[Junior R]

14 minutes ago, Crip1 said:

Maybe you’re right on the timing of the IPO, or maybe you’re inferring more than what’s there. Either way, the fact of the matter is that whether or not the IPO happens in ’25, ’26 or ’27, what’s less debatable is that the intrinsic value of FFHI continues to increase. BAIL, unless something unforeseeable happens, is going to be worth more in March of 2026 than it is currently in March of 2025. That only makes the IPO more attractive. So I am OK with letting this sit and increase in value for the next 12-24 months, even if the stock price does not reflect this. And to the extent we get buying opportunities like we’ve seen in the past few weeks, any dry powder can be used to buy more.

 

-Crip

easy 50% gain from here within next couple years as IPO comes out 

[hardcorevalue]

14 minutes ago, Crip1 said:

Maybe you’re right on the timing of the IPO, or maybe you’re inferring more than what’s there. Either way, the fact of the matter is that whether or not the IPO happens in ’25, ’26 or ’27, what’s less debatable is that the intrinsic value of FFHI continues to increase. BAIL, unless something unforeseeable happens, is going to be worth more in March of 2026 than it is currently in March of 2025. That only makes the IPO more attractive. So I am OK with letting this sit and increase in value for the next 12-24 months, even if the stock price does not reflect this. And to the extent we get buying opportunities like we’ve seen in the past few weeks, any dry powder can be used to buy more.

 

-Crip

 

Yes, that's fair, It's just time value of money here with other opportunities and left tail concerns that limit my position size. (If something goes wrong politically with Modi and India pivots back something less capitalistic and tries to steal this crown jewel). 

[gfp]

I got filled at 16.55, 16.66 and 16.77 today.  Usually I wouldn't buy shares breaking down from that perfect head and shoulders top and all those recent clueless buyers that came out of nowhere to push this into the 20's.  But I don't believe this thing gets pushed back to 14 or whatever the technical pattern suggests.  I would be excited if it did.  But you can't count on that happening.

 

The airport, surrounding airport city development and the potential option on the 2nd airport get more valuable the longer it takes to IPO anchorage.  The IPO might mark the end of our opportunity to accumulate shares at an attractive discount.  That's bad news for me when it happens, not good news.

[Hsmpanl]

51 minutes ago, gfp said:

I got filled at 16.55, 16.66 and 16.77 today.  Usually I wouldn't buy shares breaking down from that perfect head and shoulders top and all those recent clueless buyers that came out of nowhere to push this into the 20's.  But I don't believe this thing gets pushed back to 14 or whatever the technical pattern suggests.  I would be excited if it did.  But you can't count on that happening.

 

The airport, surrounding airport city development and the potential option on the 2nd airport get more valuable the longer it takes to IPO anchorage.  The IPO might mark the end of our opportunity to accumulate shares at an attractive discount.  That's bad news for me when it happens, not good news.

I’m always excited when I find out GFP has been buying at the same time I am… Good omen for sure!

[Crip1]

1 hour ago, hardcorevalue said:

 

Yes, that's fair, It's just time value of money here with other opportunities and left tail concerns that limit my position size. (If something goes wrong politically with Modi and India pivots back something less capitalistic and tries to steal this crown jewel). 

That's fair (right back atcha!). My other concern is the currency depreciating against my home (USD) currency. 

 

Now, of course I need to ask...other opportunities? Do tell. I'm not seeing much.

 

-Crip

[Hektor]

3 hours ago, Cod Liver Oil said:

My friends who have half their fund in India visit  twice per year and say it takes eons to get anything done there.

https://www.washingtonpost.com/world/2025/03/16/india-manufacturing-foreign-investment-apple-samsung/

 

Excerpt

 

Businesses are pivoting away from China — but few wind up in India
Red tape, restrictive import policies and unpredictable regulations have prevented global companies from committing to India, executives and officials say.

 

NEW DELHI — When companies began shifting their global supply chains away from China, India declared it was ready to become the world’s factory. But the moment hasn’t arrived.

 

A decade ago, India positioned itself as the prime destination for companies looking to diversify their manufacturing base, known as the China Plus One strategy. Now it is grappling with a sobering reality: Smaller countries such as Vietnam have been much more successful at attracting foreign investment.

 

Bureaucratic red tape, restrictive import policies and unpredictable regulations have prevented global companies from fully committing to India, according to interviews with more than two dozen business executives, government officials and diplomats

 

Often obscured by the flashy messaging of Prime Minister Narendra Modi’s signature “Make in India” campaign is a more complicated story — one of missed deals, stalled investments and companies quietly choosing to go elsewhere.

The urgency for India is mounting amid a slowdown in its economic momentum. The country is in the midst of an acute employment crisis, unable to create enough jobs for the 14 million people entering the workforce each year.

 

Lagging foreign investment in manufacturing — the kind of labor-intensive industry India needs to develop — is central to the problem.

 

The Indian government is considering fresh incentives to lure foreign companies, including subsidies for component manufacturing. It is also hoping to seal a trade deal with the Trump administration, which would be likely to reduce India’s tariffs and make manufacturing in the country more attractive.

[SafetyinNumbers]

2 hours ago, Crip1 said:

That's fair (right back atcha!). My other concern is the currency depreciating against my home (USD) currency. 

 

Now, of course I need to ask...other opportunities? Do tell. I'm not seeing much.

 

-Crip

I’m worried about being long all fiat currencies although I may be positioned too aggressively in that direction. 
 

I’m not too worried about the rupee. India and Indians own a lot of gold. That should help support the currency. 

[Txvestor]

3 hours ago, gfp said:

I got filled at 16.55, 16.66 and 16.77 today.  Usually I wouldn't buy shares breaking down from that perfect head and shoulders top and all those recent clueless buyers that came out of nowhere to push this into the 20's.  But I don't believe this thing gets pushed back to 14 or whatever the technical pattern suggests.  I would be excited if it did.  But you can't count on that happening.

 

The airport, surrounding airport city development and the potential option on the 2nd airport get more valuable the longer it takes to IPO anchorage.  The IPO might mark the end of our opportunity to accumulate shares at an attractive discount.  That's bad news for me when it happens, not good news.

 

Another risk I thought of especially for the non BIAL part of the portfolio, Maxop, Jaynix and other manufacturing and export companies is the tariff issue. India actually does have quite high tariffs to imports relative to most large economies and Trump has promised reciprocal tariffs in April. Many of those companies set up nicely for 10-15% annual growth could actually see negative growth instead. Likewise BIALs cargo volumes could take a hit. We already saw the results of Chinese dumping on their Sanmar investment. Irrespective of execution these extraneous risks are much more now than ever. I agree that the major risks to their financials and airport investment are more general economic slowdown. 
Overall still a decent bet for a patient investor as I think this is easily a 60c dollar right now with an indeterminate time of full valuation. If you're prepared to stick it out for 10yrs though the odds improve significantly in your favor for a solid returns outcome. 

Edited March 17, 2025 by Txvestor

[jbwent63]

I read somewhere that the Indian government is privatizing some airports. Any chance FFHI et al might be involved in a purchase of more airports given the success of BIAL?