Fairfax India new issue

[SafetyinNumbers]

6 hours ago, This2ShallPass said:

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..

They don’t need the equity capital to grow BIAL so it doesn’t make sense to use political capital to get the IPO done faster.

[villainx]

do you think delay in ipo is attempt to end exclusivity earlier?

[This2ShallPass]

5 hours ago, SafetyinNumbers said:

They don’t need the equity capital to grow BIAL so it doesn’t make sense to use political capital to get the IPO done faster.

I agree, I don't think Prem will escalate this but if the meeting presents itself he will most likely bring it up. The govt officials probably don't realize how patient Fairfax can be.

 

3 hours ago, villainx said:

do you think delay in ipo is attempt to end exclusivity earlier?

The years long delay simply doesn't make sense to me. There must be some other reason, this is the best I could think of.

 

[Viking]

Time to get reacquainted with Fairfax India. Why? The shares are trading at $16.00. BVPS is $20.72. So shares are trading at a discount to BV of $4.72/share, or 23%. Is 23% enough of a discount to get excited about? No, it's not. 

 

OK, so why am I so interested in Fairfax India at $16.00/share? I think book value of Fairfax India is materially understated. As a result, the discount the stock is currently trading at is far in excess of 23% to its economic/intrinsic value. I also think Fairfax India is exceptionally well managed. 

 

What is the problem at Fairfax India? 

 

One investment the company initiated in 2016 (it closed in 2017) - the purchase of part of Bangalore International Airport Limited (BIAL), the third largest airport in India. It performed spectacularly well for Fairfax India the first 3 years (in terms of growth in BV). But since 2019, its performance has been terrible - literally a dog with fleas. To make matters worse, management at Fairfax India has been aggressively buying much more of it over the years. Today it has an economic ownership stake in BIAL of 74%. What a bunch of dummies! BIAL now represents 53% of Fairfax India's total investments. 

 

How can management at Fairfax India be both 'exceptional' and 'dumb'?

 

Of course, they can't be both. So, let's try and figure out which it is. 

 

What is the problem at BIAL?

 

The 'value' of the company has not really changed in 6 years. At December 31 2019, 100% of BIAL was valued at $2.65 billion (using Fairfax's FV). At September 30 2025, 100% of BIAL was valued at $2.67 billion. 

 

How is this impacting Fairfax India?

 

BIAL is Fairfax India's largest holdings. Over the past 6 years, BIAL increased from 23% of total investments to 53% today. BIAL is such a large holding, its 'poor performance' has submarined Fairfax India's performance.   

 

As a result, common shareholders' equity at Fairfax India has changed only modestly over the past 6 years. At December 31 2019, it  was $2.58 billion. At September 30 2025 it was $2.83 billion. 

 

But here is where the Fairfax India story gets interesting. 

 

Do you really think the value of BIAL is the same today as it was 6 years ago?

 

Of course, those of us who have followed BIAL over the past 6 years KNOW it's worth much more today than it was worth at the end of 2019.
 

And guess what… the management team at Fairfax India knows it too. That is why they have been buying all of BIAL they can get their mitts on. To answer the question we posed earlier, the management team at Fairfax India is smart like a fox (they are NOT dumb).

 

BIAL is exceptionally well managed (and has been since Hari Marar was installed as Managing Director and CEO in July 2017, after Fairfax India got a control position in BIAL). It is a completely different airport today than it was 6 years ago. It added a second runway which began operating December 2019. And a second terminal, which doubled capacity from 25 million to 51.5 million passengers, which began operating early 2023. An expansion plan for T2 will increase capacity further to 80 million passengers by the end of the decade. Passenger growth at BIAL is taking flight - with a long runway still ahead of it. The plans to develop the property adjacent to the airport are also progressing nicely (an initiative called 'Airport City') - creating a third earnings stream for BIAL with strong growth prospects over the next decade.   

 

How much is BIAL worth? 

 

Fairfax India is planning to IPO part of BIAL to the public in India (as part of Anchorage). When this happens, we will get an updated market value for BIAL. My guess is it will be significantly more than Fairfax India's current fair value. And given the size of BIAL within Fairfax India, this has the potential to significantly increase the BV of Fairfax India. Which should increase the share price of Fairfax India.  

 

When will the IPO of Anchorage/BIAL happen?

 

That is the rub. We don't know. But given the economic/intrinsic value of BIAL is growing nicely every year, a delay in the IPO is actually a good thing for a long term investor. 

 

Of course, there is much more to the Fairfax India story. And the BIAL story. So please do your own due diligence before making an investment decision. 

 

For a more in-depth review of Fairfax India:

• James Emanuel: https://youtu.be/Ksctkf4Frkw?si=D-xfhumWl8wlcesX

 

 

Edited November 25, 2025 by Viking

[gfp]

I've added to FIH.U recently but it is also important to keep an eye on the currency since it hasn't been great and this result has been with CB interventions!

 

 

 

edit: and a longer term look

Edited November 25, 2025 by gfp

[Viking]

1 hour ago, gfp said:

I've added to FIH.U recently but it is also important to keep an eye on the currency since it hasn't been great and this result has been with CB interventions!

 

 

 

edit: and a longer term look

@gfp, great point. Definitely something to include when thinking about Fairfax India was an investment. We kind of had a nice period there for a couple of years where the currency was somewhat stable.

[Viking]

It appears relations between Canada and India are improving. Nice to see. When things fell off the rails a year or two ago, there were concerns if it would impact Fairfax/Fairfax India’s business interests in India. 
 

Canada's Foreign Minister says Ottawa is working fast to advance India trade deal

 

https://www.thehindu.com/news/national/canadas-top-diplomat-says-ottawa-is-working-fast-to-advance-india-trade-deal/article70320053.ece

 

Both countries expect to be able to double bilateral trade by 2030, and noted that Canada is India's seventh largest trade partner for goods and services

 

[Hektor]

15 hours ago, gfp said:

I've added to FIH.U recently but it is also important to keep an eye on the currency since it hasn't been great and this result has been with CB interventions!

 

 

 

edit: and a longer term look

Besides currency risk, how would one handicap the (perceived?) risk of the (federal or state) government forcing a sale to other preferred entities?

 

https://pulitzercenter.org/stories/adanis-acquisitions-inside-companys-growth-machine#:~:text=He also turned on the,awarded the project to Adani.

[gfp]

17 minutes ago, Hektor said:

Besides currency risk, how would one handicap the (perceived?) risk of the (federal or state) government forcing a sale to other preferred entities?

 

https://pulitzercenter.org/stories/adanis-acquisitions-inside-companys-growth-machine#:~:text=He also turned on the,awarded the project to Adani.

 

I'm not particularly worried about that risk.  I think Fairfax has a good relationship with Modi and India wants some diversification from their current stable of elite families that seem to own everything.

[vinod1]

In India, any business that is connected with a large real estate footprint has risks.

 

To give an example, when Andhra Pradesh was split into two states a decade back, a new capital was announced for Andhra and the ruling party at that time choose a capital and spent billions of dollars on its development. Of course all the land surrounding that capital was bought by people close to the ruling party at that time prior to the announcement. In the next election another party was elected, and they duly chose another city as capital. Again the people close to this party all bought up land prior to the announcement. It is an easy no brainer (heads I make millions, tails I make billions). This is a large scale example, but happens at every level, before a new development area that gets permit, before a company announces a location for its major investment, etc. ("In the election this year there is another change of party and the capital reverted back to the original city." If you make a movie, no one would believe the plot.)

 

At a micro level, a relative bought land a couple of decades back for $20k and it now worth $500k. So the local strongman, just occupied it and wanted $80k to vacate. His argument "You made so much money, why are you being so stingy when all I am asking is $80k and you still make $400k?" He does not even bother to argue that he has some connection to this land or that my relative does not own that land. Going to court means spending the next 10-20 years visiting court once a month. Sure you get justice, it would just take 10-20 years of your life and a few thousand hours of court appearances. 

 

To us in North America this might sound too ridiculous, but this is common there. Real estate is an area people understand and a lot of money is made from development of previously undeveloped areas. You need to be politically connected or have muscle of your own. Or you might find that your real estate suddenly has problems.

 

I have no idea of Fairfax's connections and if this even a relevant risk. Just the idea of a 2nd airport, introduces long term risks. As long as BIAL does good, but not spectacularly good, this might not be a risk. A 2-3x over several years might escape attention, a 10x-20x would.

 

I am a cautious pessimist ("someone who anticipates negative outcomes but I am open to the possibility that it all works out"), and also uninformed about all the politics around this. So this might be utterly and completely ignorable risk.

 

 

 

Edited November 25, 2025 by vinod1

[Munger_Disciple]

20 minutes ago, vinod1 said:

In India, any business that is connected with a large real estate footprint has risks.

 

To give an example, when Andhra Pradesh was split into two states a decade back, a new capital was announced for Andhra and the ruling party at that time choose a capital and spent billions of dollars on its development. Of course all the land surrounding that capital was bought by people close to the ruling party at that time prior to the announcement. In the next election another party was elected, and they duly chose another city as capital. Again the people close to this party all bought up land prior to the announcement. It is an easy no brainer (heads I make millions, tails I make billions). This is a large scale example, but happens at every level, before a new development area that gets permit, before a company announces a location for its major investment, etc. ("In the election this year there is another change of party and the capital reverted back to the original city." If you make a movie, no one would believe the plot.)

 

At a micro level, a relative bought land a couple of decades back for $20k and it now worth $500k. So the local strongman, just occupied it and wanted $80k to vacate. His argument "You made so much money, why are you being so stingy when all I am asking is $80k and you still make $400k?" He does not even bother to argue that he has some connection to this land or that my relative does not own that land. Going to court means spending the next 10-20 years visiting court once a month. Sure you get justice, it would just take 10-20 years of your life and a few thousand hours of court appearances. 

 

To us in North America this might sound too ridiculous, but this is common there. Real estate is an area people understand and a lot of money is made from development of previously undeveloped areas. You need to be politically connected or have muscle of your own. Or you might find that your real estate suddenly has problems.

 

I have no idea of Fairfax's connections and if this even a relevant risk. Just the idea of a 2nd airport, introduces long term risks. As long as BIAL does good, but not spectacularly good, this might not be a risk. A 2-3x over several years might escape attention, a 10x-20x would.

 

I am a cautious pessimist ("someone who anticipates negative outcomes but I am open to the possibility that it all works out"), and also uninformed about all the politics around this. So this might be utterly and completely ignorable risk.

 

 

 

 

I think there is another "political" risk for BIAL as well. I am not sure the Indian Govt wants a "Foreign Entity" especially a Canadian one to control one of the most important gateway airports to the country in the long run. I often wonder if this is the real reason for the delay in Anchorage IPO and the value FIH carries BIAL stake on its books. 

Edited November 25, 2025 by Munger_Disciple

[Hektor]

47 minutes ago, vinod1 said:

Just the idea of a 2nd airport, introduces long term risks.

Could the 2nd airport be a ploy to shake the asset out of their hands? There are at least two 2nd airport ideas floating around, both with in 150 kms of the Bangalore airport. One in Karnataka, the state where BIAL is and the other in Hosur, Tamil Nadu, a neighboring state.

[gfp]

25 minutes ago, Hektor said:

Could the 2nd airport be a ploy to shake the asset out of their hands? There are at least two 2nd airport ideas floating around, both with in 150 kms of the Bangalore airport. One in Karnataka, the state where BIAL is and the other in Hosur, Tamil Nadu, a neighboring state.

 

My bet would still be that BIAL management ends up operating the second airport.  Or a second airport and a reactivation of the old airport for domestic flights.  They are doing a good job operating Kempegowda, they have access to a lot of capital on good terms, and they have a non-compete radius.   

[CoGreenwich&Laight]

I was curious as to why FIH was able to purchase the two 10% stakes in BIAL from Siemens at what seems to be materially below intrinsic / fair market value, ie ~2.6bn for 100%, ...knowing well that Siemens understands the airports economics and growth outlook intimately as they were an insider. Any thoughts?

[TwoCitiesCapital]

17 hours ago, CoGreenwich&Laight said:

I was curious as to why FIH was able to purchase the two 10% stakes in BIAL from Siemens at what seems to be materially below intrinsic / fair market value, ie ~2.6bn for 100%, ...knowing well that Siemens understands the airports economics and growth outlook intimately as they were an insider. Any thoughts?

 

I think what we're witnessing now is evidence enough.

 

Siemens doesn't own and operate airports.  Having the capital tied up has a cost.  Navigating local politics to push for an IPO has a cost.

Navigating the risks associated with the unrelated business in another country comes has a cost. 

And all of those costs remove resources, time, and focus from their core business that they're good at. 

 

Selling at a reasonable valuation to get out from under those costs to immediately redeploy into your primary business and generate an attractive return for years while the asset you sold sits and waits doesn't seem insane to me even if the end result is a slightly lower return. 

 

[Junior R]

I truly believe something is coming soon no insider trading or buybacks since August ...this could be due to them having some insider news

[Xerxes]

18 hours ago, CoGreenwich&Laight said:

I was curious as to why FIH was able to purchase the two 10% stakes in BIAL from Siemens at what seems to be materially below intrinsic / fair market value, ie ~2.6bn for 100%, ...knowing well that Siemens understands the airports economics and growth outlook intimately as they were an insider. Any thoughts?

Siemens was a motivated seller. Their job was done. They are not there to operate a concession on a long term basis. 
 

Siemens AG group itself went through restructuring that saw the spin off of its health, and energy as independent companies, 2018 and 2020. 
 

Why would it keep an airport as a minority investor in a not so clear odd jurisdiction, when they tried so hard to simplify Siemens story. Siemens is there to sell picks and shovels and not make directional bet in India by directly owning and operating airport. 
 

Here are some other Siemens asset sales:

 

 

 

When a motivated seller (Siemens) meets a patient owner-buyer (FIH), there is a market. 

[dartmonkey]

IIFL has had a nice move up, gradually over the last year, to INR569, within spitting distance of the share price at the end of 2023 when it dropped from the low 600s to about 350, when the RBI suspended its ability to issue gold loans, and then even lower to about 310 a year ago. 

 

We don’t talk much about shares that aren’t called BIAL, for good reason, since that one stock is about half of FIH’s book value, and maybe 2/3 of FIH’s real value. But IIFL was #2, at 452 as of Sept 30, and has moved up another 25% since then. 

[TwoCitiesCapital]

1 hour ago, dartmonkey said:

IIFL has had a nice move up, gradually over the last year, to INR569, within spitting distance of the share price at the end of 2023 when it dropped from the low 600s to about 350, when the RBI suspended its ability to issue gold loans, and then even lower to about 310 a year ago. 

 

We don’t talk much about shares that aren’t called BIAL, for good reason, since that one stock is about half of FIH’s book value, and maybe 2/3 of FIH’s real value. But IIFL was #2, at 452 as of Sept 30, and has moved up another 25% since then. 

 

+1 

 

Always difficult to keep track, or have the motivation, since I cannot buy the individual securities myself. 

 

Thanks for the reminder and tracking this one! 

[This2ShallPass]

2 hours ago, dartmonkey said:

IIFL has had a nice move up, gradually over the last year, to INR569, within spitting distance of the share price at the end of 2023 when it dropped from the low 600s to about 350, when the RBI suspended its ability to issue gold loans, and then even lower to about 310 a year ago. 

 

We don’t talk much about shares that aren’t called BIAL, for good reason, since that one stock is about half of FIH’s book value, and maybe 2/3 of FIH’s real value. But IIFL was #2, at 452 as of Sept 30, and has moved up another 25% since then. 

Yes, IIFL was a big win - remember their original investment has now been split into 3 companies (and 5 Paisa that came for almost free). 360 Wealth management has been fully monetized.

The other big investment, Sanmar hasn't worked out. CSB has done ok.

[SafetyinNumbers]

6 minutes ago, This2ShallPass said:

Yes, IIFL was a big win - remember their original investment has now been split into 3 companies (and 5 Paisa that came for almost free). 360 Wealth management has been fully monetized.

The other big investment, Sanmar hasn't worked out. CSB has done ok.

This is the track record to the end of Q325 and performance for the public stocks this quarter.

 

 

 

[dartmonkey]

Nice graph, and it shows that the biggest non-BIAL investments at Q3 end (IIFL FInance, CSB Bank, IIFL Capital) are all up 8-26%), whereas FIH itself is down 8%. The 2 that are down (5Paisa, Fairchem Organics) are tiny. 

 

Bought a little more today, which is crazy, because I already have way too much. Trading sardines.

[Junior R]

2 hours ago, dartmonkey said:

Nice graph, and it shows that the biggest non-BIAL investments at Q3 end (IIFL FInance, CSB Bank, IIFL Capital) are all up 8-26%), whereas FIH itself is down 8%. The 2 that are down (5Paisa, Fairchem Organics) are tiny. 

 

Bought a little more today, which is crazy, because I already have way too much. Trading sardines.

same added today as well

[Hektor]

News about the proposed airport at Hosur. It’s not a given that the airport proposal will be green light A long way to go, I think.
 

https://www.deccanherald.com/india/tamil-nadu/hosur-airport-tamil-nadu-floats-bid-to-select-dter-consultant-3812696
 

Hosur airport: Tamil Nadu floats bid to select DTER consultant

The consultant, to be chosen by the Tamil Nadu Industrial Development Corporation (TIDCO), would be expected to prepare the report — including surveys, master planning, financial modelling

 

 

 

 

 

 

 

[Junior R]

Quote

India Q2 GDP growth quickens on year to 8.2% even before full impact of GST cut kicks in
 

Read more at:
https://economictimes.indiatimes.com/news/economy/indicators/india-q2-gdp-growth-quickens-on-year-to-8-2-even-before-full-impact-of-gst-cut-kicks-in/articleshow/125634777.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst