Fairfax India new issue

[gfp]

On BIAL exclusivity and talks around a second airport:

 

- Exclusivity on the radius surrounding BIAL through 2033

 

- Possibility to offload the less desirable traffic to a 2nd airport (by 'less desirable' I assume they mean less profitable, ie, domestic)

 

- Talk about the possibility of reviving the old airport (HAL) - if HAL airport is reopened, we will operate it.  We have exclusivity on the old airport until 2038

 

- By 2033, BIAL will be at 85m and all peak time slots will be filled - so there is a need for another airport before the end of the exclusivity period

 

- We recommended our favorite of the 3 sites and state government, etc, will make their decision

 

- We will protect our interests and we have a very good relationship with state government and are included in the talks / process

Edited April 9, 2025 by gfp

[Crip1]

It's my #3 position and I put in a buy order today for more...US$15.00 or so is going to look like a steal a couple years down the road.

 

-Crip

 

P. S. When my buy orders get filled, it normally results in a 5% decline in share price, so...

[nwoodman]

1 hour ago, gfp said:

On BIAL exclusivity and talks around a second airport:

 

- Exclusivity on the radius surrounding BIAL through 2033

 

- Possibility to offload the less desirable traffic to a 2nd airport (by 'less desirable' I assume they mean less profitable, ie, domestic)

 

- Talk about the possibility of reviving the old airport (HAL) - if HAL airport is reopened, we will operate it.  We have exclusivity on the old airport until 2038

 

- By 2033, BIAL will be at 85m and all peak time slots will be filled - so there is a need for another airport before the end of the exclusivity period

 

- We recommended our favorite of the 3 sites and state government, etc, will make their decision

 

- We will protect our interests and we have a very good relationship with state government and are included in the talks / process

This was my (dodgy) transcript from that section

————————-

‘We very close partners with the state government, and therefore the state government trusts us and involves in all these involves us in all these discussions. So like you might be pointed out, there are exclusivity at that stage. What one must remember is that all the peak hours, and it's really 1585 and 15 million. That growth is coming from filling up the values, right? And the city is already choking at that point of time, because there's need for further capacity, and that capacity is going to come only. So we're aiding the government here. We were involved in the selection of those three sites. We recommended our favorite our part of those three sites, because we believe that that was the best process for the central government, as was going to happen at all points of time in this discussion, what we were trying to do is protect our interests at no point, because our interest.”

 

Future Airports:

"We're trying to hire the best possible candidates... We need several more, especially in the ambition of operating more airports, and the opinion for privatization, acquire more airports, several more CEOs and senior leaders in those positions."

Government Privatization Signals:

Gopal noted: "The government has been talking about many privatizations, infrastructure assets, more airports... 12 or 13 airports are likely to come up now, so we are migrating."

 

"Last time they were advertising their airports, we also participated, but we participated with discipline. We were outdid by more than substantially."

—————————

 

Consistent with your summary  they are very much involved in this process.  I came away with a good vibe.  Prior to today my concern was that given the long lead time on construction a competitor could cut ground prior to the expiration and started operating after expiration.  Much less concerned now, especially after the manning comments.  It also reinforced the competitive advantage Fairfax has when it comes to developing the talent
 

 

 

[This2ShallPass]

7 hours ago, nwoodman said:

I came away with a good vibe.  Prior to today my concern was that given the long lead time on construction a competitor could cut ground prior to the expiration and started operating after expiration.  

I would say this is still possible. It's great that BIAL is giving their inputs, but Hari also said it's to the state government but central (federal) govt will make the decision. It's entirely possible the central govt will decide against BIAL's interests. We should be prepared for it. 

 

They gave a honest answer on Anchorage IPO, said it will still take a while. Not sure if "a while" is multiple years (felt like it). My guess is it will come down to Prem bringing up the issue with Modi again, but obviously he can't pick up the phone. So will have to be when he gets an invite to speak w Modi again.

 

I bought more today (when my competition was out). I reduced my position by 30% in Dec'23 and now back to the full position. This will be a double in the next 3 years but we could be in flat zone for a while..

 

[gfp]

The nice thing about any delay in Anchorage going public is that the Airport and airport city development continue to get more valuable every day.  It would also be nice if markets were healthy and happy when an eventual IPO went down.  Right now we own as much as we are going to own.  Not a bad thing when its a great asset.

 

I don't see any reason for the local government to cut BIAL / Anchorage out of a deal for a second airport.  You have the exclusivity period, a very competent operator that has access to a TON of capital, and a great track record / relationship.  Keep everything win-win and you're golden.

 

Sell me some more in the 14's suckers!  

[Xerxes]

Thanks for the note guys. 
 

there was nothing mentioned on that IDBI bank from India ? Comments ?
 

and how exactly they are prepare to finance an investment into such a beast 

[gfp]

1 minute ago, Xerxes said:

Thanks for the note guys. 
 

there was nothing mentioned on that IDBI bank from India ? Comments ?
 

and how exactly they are prepare to finance an investment into such a beast 

 

No mention of IDBI with the cameras rolling that I heard.  Good discussion of technology investment at CSB.

 

The financing discussion was pretty amusing.  If there is opportunity, the money will be there. There is a humorous saying they bandied around that, basically, if there is opportunity, they only need to make one call (hint: it's Prem) and the money appears.

[villainx]

What about the tension between Canada and India?  

 

[gfp]

1 minute ago, villainx said:

What about the tension between Canada and India?  

 

 

The only mention I heard was positive

[villainx]

Trudeau sacrificed for Fairfax India's sake.

 

[Xerxes]

7 hours ago, gfp said:

 

No mention of IDBI with the cameras rolling that I heard.  Good discussion of technology investment at CSB.

 

The financing discussion was pretty amusing.  If there is opportunity, the money will be there. There is a humorous saying they bandied around that, basically, if there is opportunity, they only need to make one call (hint: it's Prem) and the money appears.

thank you. 
sounds like Prem is turning into a Masayoshi Son and his magic wallet. 

[gfp]

new iPhone just got delivered and it's from India

 

[backtothebeach]

Topped up today at $14.97. I doubt there will be many more days it will dip below $15. Famous last words, lol.

[gfp]

8 minutes ago, backtothebeach said:

Topped up today at $14.97. I doubt there will be many more days it will dip below $15. Famous last words, lol.

 

Yep!  Only 100 shares of my $14.90 order filled.  rocketshipemoji

 

[backtothebeach]

Sorry for jumping in front of you haha.

[giulio]

Transcript of AGM

FIH_agm2024.pdf

 

[mananainvesting]

https://www.reuters.com/world/china/apple-aims-source-all-us-iphones-india-pivot-away-china-ft-reports-2025-04-25/

 

 

[nwoodman]

https://www.moneycontrol.com/news/india/tamil-nadu-cm-meets-fairfax-bial-officials-as-hosur-airport-plan-gathers-pace-13007659.html

 

Interesting development,  if Hosur is given the greenlight under BIAL management does this preclude the second airport in Bangalore?  Hosur might be a better bet for Fairfax than a brand new airport that falls outside the exclusivity agreement

 

[gfp]

Thanks for the article.  I am a little confused on how you came to your conclusions (wild ass guesses?) in several of your boxes above.

 

Did someone tell you Karnataka is more adversarial towards BIAL?

 

Did someone tell you a brand new airport in Tamil Nadu would be less capital intensive with a faster ramp up than a brand new airport in Bangalore?

 

Did someone tell you there is something precluding BIAL being involved in a second Bangalore airport before their exclusivity period ends?

 

Why would a second Bangalore airport require breaking BIAL's exclusivity agreement if Anchorage was involved in its development?

 

But, yes - overall I agree that an Anchorage owned and developed airport in Hosur would be a big positive since Hosur doesn't have an airport presently and has to use Kempegowda as their closest option.

 

Maybe Hosur gets an international airport and BIAL also re-opens Bangalore's old airport to take some of the less profitable domestic traffic 

[nwoodman]

2 minutes ago, gfp said:

Thanks for the article.  I am a little confused on how you came to your conclusions (wild ass guesses?) in several of your boxes above.

 

Did someone tell you Karnataka is more adversarial towards BIAL?

 

Did someone tell you a brand new airport in Tamil Nadu would be less capital intensive with a faster ramp up than a brand new airport in Bangalore?

 

Did someone tell you there is something precluding BIAL being involved in a second Bangalore airport before their exclusivity period ends?

 

Why would a second Bangalore airport require breaking BIAL's exclusivity agreement if Anchorage was involved in its development?

 

But, yes - overall I agree that an Anchorage owned and developed airport in Hosur would be a big positive since Hosur doesn't have an airport presently and has to use Kempegowda as their closest option.

 

Maybe Hosur gets an international airport and BIAL also re-opens Bangalore's old airport to take some of the less profitable domestic traffic 

Are these actual questions or are you just trolling?

[gfp]

actual questions - why are you making those assumptions?

[nwoodman]

1 minute ago, gfp said:

actual questions - why are you making those assumptions?

It’s an interesting development. I don’t have any more insight into this than you.  Just trying to demonstrate pros-cons.  Thinking about the recent article it does allay some fears about the sunset.  My concern is that their leverage  is reduced with the second Bangalore airport and the time it takes to come on line in terms of the exclusivity.  I can see Hosur working even if it is a bargaining chip.  Potentially I can actually see Kepegowda plus two 30m passenger airports.  BIAL’s position is strengthened if they get to participate in both, with Hosur first. 

[Hektor]

7 hours ago, nwoodman said:

if Hosur is given the greenlight under BIAL management does this preclude the second airport in Bangalore?

If Hosur gets an airport, there will not be another viable airport in Bangalore, in my opinion. Hosur is about 25 or 30 miles away from Bangalore. 

[nwoodman]

10 hours ago, Hektor said:

If Hosur gets an airport, there will not be another viable airport in Bangalore, in my opinion. Hosur is about 25 or 30 miles away from Bangalore. 

I tend to agree, at least in the medium term (20 years).  Referring back to the exclusivity clause it depends on your definition of development but it’s hard to see a work around that doesn’t involve BIAL.  
 

https://www.civilaviation.gov.in/sites/default/files/2023-02/moca_000743.pdf

 

Typically development would extend to:

-Land Acquisition

-Planning and Approvals

-Zone changes etc

 

Some possible timing to bring on either option (Hosur or 2nd Bangalore airport)

 

 

Perhaps throw Chennai into the mix

 

“They (the Chief Minister and Watsa’s delegation) discussed various potential investment opportunities in Tamil Nadu, including Chennai and Hosur Airports. As the majority owners of the world-class airport in Bengaluru, they are keen to leverage their expertise to develop such facilities in Tamil Nadu also,” Thiaga Rajan said”

 

https://www.deccanherald.com/amp/story/india/tamil-nadu/fairfax-ceo-meets-tamil-nadu-cm-stalin-discusses-chennai-and-hosur-airports-3516836

 

Edited April 29, 2025 by nwoodman

[SafetyinNumbers]

1 hour ago, nwoodman said:

I tend to agree, at least in the medium term (20 years).  Referring back to the exclusivity clause it depends on your definition of development but it’s hard to see a work around that doesn’t involve BIAL.  
 

https://www.civilaviation.gov.in/sites/default/files/2023-02/moca_000743.pdf

 

Typically development would extend to:

-Land Acquisition

-Planning and Approvals

-Zone changes etc

 

Some possible timing to bring on either option (Hosur or 2nd Bangalore airport)

 

 

Perhaps throw Chennai into the mix

 

“They (the Chief Minister and Watsa’s delegation) discussed various potential investment opportunities in Tamil Nadu, including Chennai and Hosur Airports. As the majority owners of the world-class airport in Bengaluru, they are keen to leverage their expertise to develop such facilities in Tamil Nadu also,” Thiaga Rajan said”

 

https://www.deccanherald.com/amp/story/india/tamil-nadu/fairfax-ceo-meets-tamil-nadu-cm-stalin-discusses-chennai-and-hosur-airports-3516836

 

I assume they are raising money at Anchorage to support these investments if they come to fruition.
 

Could that lead to a significant increase in the mark on BIAL?