Fairfax India new issue

[Hsmpanl]

31 minutes ago, CS said:

110mm in cash and 8.2mm in shares (this is an expense too) roughly $130mm at todays close. Net -240mm(and growing as FV rises). Thoughts and opinions please? 

Seems reasonable over 10 years. They effectively bought back the shares that were issued, so more like -$216MM and not growing with FIH share price. Book value is a little more than a double over that time period, and includes the fee paid. I own both FFH and FIH, although I have a higher ownership % in FIH. The fee being paid to FFH doesn't concern me, I think FFH is being fair to FIH owners in how they are calculating and allowing FIH to settle the fee, and I think per typical fairfax modus operandi the book value is understated and actual IV is quite a bit higher than book.

[Munger_Disciple]

11 minutes ago, Hsmpanl said:

Seems reasonable over 10 years. They effectively bought back the shares that were issued, so more like -$216MM and not growing with FIH share price. Book value is a little more than a double over that time period, and includes the fee paid. I own both FFH and FIH, although I have a higher ownership % in FIH. The fee being paid to FFH doesn't concern me, I think FFH is being fair to FIH owners in how they are calculating and allowing FIH to settle the fee, and I think per typical fairfax modus operandi the book value is understated and actual IV is quite a bit higher than book.

 

Don't forget the 1.5% annual management fee. That's a whole lot of fees over 10 years. That's why I own the mothership, the recipient of such fees.

 

Honestly I don't even understand why FIH exists as a public entity. Seems like a lot of frictional costs for public retail shareholders of FIH. FFH could have got one of those Canadian pension funds as an LP in a private partnership with the mothership as the GP to invest in India & avoid all of this and all the additional costs associated with being a public entity. But what do I know? 

Edited November 21, 2025 by Munger_Disciple

[Junior R]

I plan to add for quick trade soon

[giulio]

12 hours ago, petec said:

 

Agreed. Do you have a good idea of the IV? I need to do some work on this.

Assuming the rest of the holdings are carried at their fair value, which I highly doubt, I think you can add another $6 or $15 per share due to BIAL "true value". 

Here is the way I look at it:

• BIAL did $300M in EBITDA in 2024, they did $170M in the first 6m 2025 (from FIH reports) so they should do $350M EBITDA in 2025
• I would argue a 15x-20x multiple is fair
• net leverage should be ~3x (I expect this to be 4x as they expand)
• 350*15 = 5.25B| 350*20 = 7B
• Net debt should be ~1B
• this nets an equity value of 4.2-6B
• Their ownership is 69% iirc, considering Anchorage, so their stake should be = $2.9-4.1B
• at Q3 end, BIAL was on the books for basically $2B, so there is 0.9-2.1B difference
• on 135M s/o it = $6.7-$15.5

Now I could be wrong on many of these numbers so please don't take them for granted and correct me if I am wrong.

 

Importantly, BIAL is a growing assets, projected to do ~2.5x more passengers by 2040. Why should EBITDA not 3-4x from here? Also, I would argue that other assets will be worth more in the future because of 1) India growth trajectory, very well outlined at the agm and 2) why invest in them if you don't expect them to be more valuable?

(I am not saying all the investments will be stars, some will flop for sure, but on average, given their track record, they should do well).

If you apply other currently listed indian airports' valuation to BIAL, it gets truly ridiculous! these sell for 30x EBITDA. 

 

I have a ~5% position in FIH and would like to add more at current prices.  Very happy to receive some pushback!

 

Best,

G

Edited November 22, 2025 by giulio
I forgot that fih owns 69% and not 100%. I adjusted my calculations to reflect this

[TwoCitiesCapital]

3 hours ago, CS said:

110mm in cash and 8.2mm in shares (this is an expense too) roughly $130mm at todays close. Net -240mm(and growing as FV rises). Thoughts and opinions please? 

 

It doesn't bother me. 

 

They can elect to pay in cash or shares. Them electing to pay most in cash sits well with me. While I'd prefer they not use any shares, using shares that were purchased at an average price of $14 and then being redeemed at higher values could be argued to be better than paying in cash - particularly if you're looking to preserve some liquidity for upcoming deals. 

 

The fee was a much larger issue after they IPO'd. They were still unproven, it was trading at a significant premium to its NAV, and the fees are high. 

 

Now, we have a demonstrated track record, and asset trading at what we estimate to be a significant discount. The fees are high - but they are known - and haven't yet prevented the results from being decent. Only Mr. Market keeps giving us the opportunity to buy a proven team for the price of a mediocre one. 

 

 

[villainx]

4 hours ago, Munger_Disciple said:

Honestly I don't even understand why FIH exists as a public entity. Seems like a lot of frictional costs for public retail shareholders of FIH. FFH could have got one of those Canadian pension funds as an LP in a private partnership

 

Fees?

 

JK!, I think there's reasons but the persistent discount is part of why thesis for FIH feels a little stuck.

 

Thanks, 

Edited November 22, 2025 by villainx

[Munger_Disciple]

FIH stock should rationally trade at a discount to BV  IMO. You have the manager charging 1.5% management fees + incentive fees on BV. So let's call them total fees equal to roughly 2.5% of BV per annum on average. Capitalizing the fees at a 10% discount rate gets you to a fair value equal to 75% of Book. 

Edited November 22, 2025 by Munger_Disciple

[This2ShallPass]

On 11/20/2025 at 2:45 PM, Crip1 said:

Perm vs. Trading: I’ve had the vast majority of my position for a while now but have done a fair amount of trading in and out to bring my average cost to around $11. The return has been unsatisfactory considering I bought roughly half of my core position in 2018 and the rest in 2022.

 

Position size: It’s #3…in line with MKL and BRK but well behind Fairfax, so it’s not a small position.

 

The problem is that I am struggling to figure out fair value. Similar to Fairfax in that I can’t give a rock-solid “This is what it’s worth” figure, but I’m more than reasonably sure that both are worth substantially above where it’s currently trading. Dissimilar from Fairfax is that I’d have done way better by simply investing in an S&P Index fund over the past 3-7 years, so opportunity cost is significant. 

 

Ultimately, the plan is to keep the core position and will trade in and out where it make sense. I’ve endured suboptimal price action such that it would be foolish to sell out before receiving the reward for my patience.  

 

-Crip

 

P. S. It's kinda self-centered to talk about me in that post compared to the company. I do so wondering if others are in of a similar predicament. 
 

I'm in that same predicament, except I never traded it so worse. I bought my initial position in 2015 and added over the years. I have now trimmed my position to 5% and will let it play out from here as BIAL is truly an unique asset. But something is wrong w the IPO. Even accounting for slow bureaucracy, this is now running into many years.

 

I have been vocal about my concerns about the fees, using BV is a double whammy. None of us can sell at the prices they're using to calculate their fees!  I did the math and posted a while back, there was a point in time when the stock was ~$14..on a  per share basis, we would have paid Fairfax more in fees than we would have been able to realize in profit. Pretty unbelievable. 

 

 

[SafetyinNumbers]

10 hours ago, Munger_Disciple said:

FIH stock should rationally trade at a discount to BV  IMO. You have the manager charging 1.5% management fees + incentive fees on BV. So let's call them total fees equal to roughly 2.5% of BV per annum on average. Capitalizing the fees at a 10% discount rate gets you to a fair value equal to 75% of Book. 

Actual fees have been 1.9%. I think we all agree that IV is significantly higher than BV so is there a benefit from deferring fees that should be included in the analysis? Also, is there any mitigation to fees from the benefit of cheap leverage in part due to the relationship with Fairfax? What fee would be fair? 
 

Also, if you own Fairfax are you frustrated they pay fees to outside managers?
 

[dartmonkey]

10 hours ago, Munger_Disciple said:

FIH stock should rationally trade at a discount to BV  IMO. You have the manager charging 1.5% management fees + incentive fees on BV. So let's call them total fees equal to roughly 2.5% of BV per annum on average. Capitalizing the fees at a 10% discount rate gets you to a fair value equal to 75% of Book. 

I don’t think there’s much point in worrying about book value, the important thing, for a long-term investor, is how much value they have created. Despite the fees paid, they have increased book value by a bit about  107% (6.5%/yr) which is disappointing, but anyone investing in this company believes that the airport is at least twice the reported $2.5b, meaning FIH’s value is at least $30, conservatively assuming that the other half of FIH’s book value is fairly valued. 

 

If this is so, then FIH has returned about 200%, or let’s say 180% considering that FFH will take another 1/5 of the increase in book value from $20 to $30. That means we have a 10% annual return, net of fees. Still not great, but perhaps acceptable.

 

More pertinent to me, going forward, that would mean we should expect an increase from the current share price of $16 to something like $28, once the value of BIAL becomes clear and if the shares trade up to book value, i.e. a 75% ‘catch-up’ return, which I don’t care to miss out on. And the airport and other holdings may well be worth more, and we may get CSB, and share repurchases way below value will help in the meantime… 

[Viking]

When it comes to the fees Fairfax earns from Fairfax India i think one of Buffett’s core principles might help the discussion: ‘Price is what you pay. Value is what you get.’ 
 

Lots of focus on ‘price paid’. (Fees) It is the easy part. 

 

Very little focus on ‘value received.’ This is the difficult part. Book value tells part of the story. But there is much more to it:

• What is economic/intrinsic value of Fairfax India today?
• How much hidden value has been created?
• How good is management? 
• What is the ‘earnings power’ of Fairfax India (i.e. its potential, the value of decisions yet to be made)?

On top of this, Fairfax India shares are trading at US$15.85. Looks like a Black Friday sale to me.

[SafetyinNumbers]

58 minutes ago, dartmonkey said:

Despite the fees paid, they have increased book value by a bit about  107% (6.5%/yr) which is disappointing, but anyone investing in this company believes that the airport is at least twice the reported $2.5b, meaning FIH’s value is at least $30, conservatively assuming that the other half of FIH’s book value is fairly valued. 

 

If this is so, then FIH has returned about 200%, or let’s say 180% considering that FFH will take another 1/5 of the increase in book value from $20 to $30. That means we have a 10% annual return, net of fees. Still not great, but perhaps acceptable.

Intrinsic value is likely in the $35-45 range so probably closer to 13% CAGR vs 10%.

Edited November 22, 2025 by SafetyinNumbers

[Munger_Disciple]

1 hour ago, dartmonkey said:

I don’t think there’s much point in worrying about book value, the important thing, for a long-term investor, is how much value they have created. Despite the fees paid, they have increased book value by a bit about  107% (6.5%/yr) which is disappointing, but anyone investing in this company believes that the airport is at least twice the reported $2.5b, meaning FIH’s value is at least $30, conservatively assuming that the other half of FIH’s book value is fairly valued. 

 

If this is so, then FIH has returned about 200%, or let’s say 180% considering that FFH will take another 1/5 of the increase in book value from $20 to $30. That means we have a 10% annual return, net of fees. Still not great, but perhaps acceptable.

 

More pertinent to me, going forward, that would mean we should expect an increase from the current share price of $16 to something like $28, once the value of BIAL becomes clear and if the shares trade up to book value, i.e. a 75% ‘catch-up’ return, which I don’t care to miss out on. And the airport and other holdings may well be worth more, and we may get CSB, and share repurchases way below value will help in the meantime… 

 

Yeah BV may be understated but it seems like FIH shareholders are waiting forever for payoff while the fees never sleep (I am not unhappy that FIH is paying those fees to the mothership FFH in which I am a shareholder). I agree though that FIH may be a good trade here until BIAL value gets recognized if it happens relatively soon. Personally I like to keep it simple & just own the mothership especially because I am a US resident. 

 

 

 

[Viking]

1 hour ago, SafetyinNumbers said:

Intrinsic value is likely in the $35-45 range so probably closer to 13% CAGR vs 10%.

 

+1. And I think the management team is stellar. 

[CS]

The corner of BERKSHIRE and Feefax

[Viking]

35 minutes ago, Munger_Disciple said:

 

Yeah BV may be understated but it seems like FIH shareholders are waiting forever for payoff while the fees never sleep (I am not unhappy that FIH is paying those fees to the mothership FFH in which I am a shareholder). I agree though that FIH may be a good trade here until BIAL value gets recognized if it happens relatively soon. Personally I like to keep it simple & just own the mothership especially because I am a US resident. 

 

As long as BIAL is increasing in value each year I am a happy camper. My view is that asset is special. An Anchorage IPO will simply be the cherry on top. 

Edited November 22, 2025 by Viking

[Junior R]

4 minutes ago, Viking said:

 

As long as BIAL is increasing in value each year I am a happy camper. My view is that asset is special. An Anchorage IPO will simply be the cherry on top. 

there has been no insider buying or selling / or buybacks since Aug 3 2025...Maybe this is going happen sooner then later as you would have saw at least one insider buy even 175 shares like Ben did before...Since its significant insider news prob thats the hold...

[Madpawn]

21 hours ago, giulio said:

•  BIAL did $300M in EBITDA in 2024, they did $170M in the first 6m 2025 (from FIH reports) so they should do $350M EBITDA in 2025
• I would argue a 15x-20x multiple is fair
• net leverage should be ~3x (I expect this to be 4x as they expand)
• 350*15 = 5.25B| 350*20 = 7B
• Net debt should be ~1B
• this nets an equity value of 4.2-6B
• Their ownership is 69% iirc, considering Anchorage, so their stake should be = $2.9-4.1B
• at Q3 end, BIAL was on the books for basically $2B, so there is 0.9-2.1B difference
• on 135M s/o it = $6.7-$15.5

 

Some observations: 

- Passengers growth has gone from ~32M (pre-covid peak) -> 46-47M (projections for 2025-2026)

- 74% ownership as of Feb 2025 (43.6% through Anchorage and 30.4% through Mauritius-based sub)

- OMERS bought 11.5% interest in Anchorage in 2021, with BIAL valuation at $2.6 billion 

- To your point, in Q3, FIH was carrying it at fair value around $2 billion 

 

Looking at the big picture, it's crazy how BIAL's book value which is arguably very conservative, is [as a standalone asset] almost the same as the stock's current market cap. 

 

[TwoCitiesCapital]

16 hours ago, Munger_Disciple said:

FIH stock should rationally trade at a discount to BV  IMO. You have the manager charging 1.5% management fees + incentive fees on BV. So let's call them total fees equal to roughly 2.5% of BV per annum on average. Capitalizing the fees at a 10% discount rate gets you to a fair value equal to 75% of Book. 

 

The argument when it IPO'd was that it should trade at a premium due to access to private assets and a stellar management team. 

 

Narrative drives the premium/discount debate. I can see the Anchorage IPO as a possible catalyst to change the narrative - and perhaps it goes back to a premium with people justifying it again. 

[Madpawn]

I find this note from Q3 earnings quite interesting, gives us an idea of approx timeline for Anchorage IPO: 

 

"Non-controlling interests

At September 30, 2025 the company held 43.6% out of its 74.0% (December 31, 2024 - 43.6% out of its 64.0%) equity interest in

BIAL through Anchorage. As a result, the company's fully-diluted equity interest in BIAL was 69.0% (December 31, 2024 - 59.0%).

Net earnings attributable to non-controlling interests of $12,593 and $12,796 during the third quarter and first nine months of 2025

(2024 - $3,341 and $3,641) principally related to net unrealized gains on Anchorage's investment in BIAL based on OMERS' present

economic interest.

The company shall use commercially reasonable efforts to list Anchorage by way of an IPO in India, subject to regulatory approvals

and market conditions by the IPO long-stop date. During the third quarter of 2025, the company and OMERS agreed to extend the IPO

long-stop date by one year to September 16, 2026. If the valuation of Anchorage upon closing of the IPO is below approximately

$1.0 billion (at period end exchange rates) (91.6 billion Indian rupees), then OMERS' ownership in Anchorage will increase to a

maximum of 15.0% and the company's ownership in Anchorage will decrease to a minimum of 85.0% (fully-diluted equity interest in

BIAL will decrease from 69.0% at September 30, 2025 to a minimum of 67.5%). If Anchorage does not list by way of an IPO in India

by the IPO long-stop date, then OMERS' ownership in Anchorage will remain at its fully-diluted equity interest of 11.5%. The net

assets of Anchorage at September 30, 2025 were $1,134,405 (100.7 billion Indian rupees)."

[SafetyinNumbers]

1 hour ago, TwoCitiesCapital said:

 

The argument when it IPO'd was that it should trade at a premium due to access to private assets and a stellar management team. 

 

Narrative drives the premium/discount debate. I can see the Anchorage IPO as a possible catalyst to change the narrative - and perhaps it goes back to a premium with people justifying it again. 

I think the odds are low of this but it’s possible. I think more than likely the discount persists but they will be able to sell some Anchorage to buy stock. I also think BIAL will start paying out dividends at some point which will provide capital as well for growth or buybacks.

[SafetyinNumbers]

27 minutes ago, hardcorevalue said:

 

I used to think the Anchorage IPO would be some huge event but it's such a big part of the NAV already I don't see how it will be a game changer on discount to NAV. 

 

Only a sale to Adani / GMR would move things. And it would still trade at a discount after. 

 

Love the asset but I think if Fairfax's balance sheet keeps improving they should just buy the rest of this at 2x book and call it a day. 

Doesn’t make sense from capital treatment perspective. I assume they think very long term. There are other ways to add value with a public vehicle. I think return expectations are very high because the market is particularly inefficient. 

[villainx]

2 hours ago, SafetyinNumbers said:

BIAL will start paying out dividends at some point

 

I thought there's bunch more renovation (was in T1?) and possibly other large cap ex to spend on.  Dividend is feasible?

 

 

[SafetyinNumbers]

55 minutes ago, villainx said:

 

I thought there's bunch more renovation (was in T1?) and possibly other large cap ex to spend on.  Dividend is feasible?

 

 

2029 potentially 

[This2ShallPass]

I keep thinking why does it take so long for the IPO to be approved. There are already airports in India that are trading publicly. One reason could be the govt is using it as leverage to get out of the exclusivity on the second airport until 2033? I don't think Fairfax will play ball here and that's the delay. It might take the next meeting for Prem w Modi for this to move..