Fairfax India new issue

[SafetyinNumbers]

1 hour ago, Madpawn said:

This might’ve been discussed in the past, but in the event where Fairfax wins the bid for IDBI, do we expect FIH to participate? 
 

If not and instead FFH does it alone, does it destroy the long-term thesis of having FIH as a standalone entity? 

FIH has rights on investing every new investment outside of insurance in India so they have to be involved. My guess is a GP/LP structure where FIH is the GP. If that’s not the case, tnen they presumably would be compensated in some other way, 

[This2ShallPass]

2 hours ago, TwoCitiesCapital said:

Nobody wants to own this today. Everyone is bitching about hypothetical performance that undervalues BIAL,uses that hypothetical performance to justify 'underperformance' relative to ETFs or some other benchmarks, all to clamor that Fairfax should return fees it was contractually owed because they want to feel better about a flat share price when that is always a risk in a closed fund structure... 

Hypothetical performance?? So Fairfax is collecting fees on made up numbers then...got it.

 

Since this IV of $45 is so great we should pay Fairfax another $1B upfront while we are it. For some on this board even that might be ok because they have "performed" and these hypothetical numbers (aka stock price) is giving them a bad rap. Fairfax needs to be rewarded more, no they can't be patient to collect their reward in due time...that's asking too much. But the people paying these high fees are being constantly told they have to be patient since it's value investing duh..

 

 

[benchmark]

4 hours ago, Cod Liver Oil said:

I own some of this. It has been meh like most downstream "value" entities. I remain willfully deluded with my ultra cheap Bollore, Odet and Exor.  Most of the time, the upstream entities do better: BN, UMG, Tencent, FFH etc... There are only about 7 guys in the world who incel this stuff. Buy the principal entity even if it doesn't scream as cheap.

I'm curious if anyone has done some work on the impact/gains of FFH if the airport ipo happens.

[Crip1]

21 hours ago, Viking said:

Fairfax India has become a play on BIAL. I outlined the reasons in my previous post. When the Anchorage IPO happens, shareholders will get paid - and probably very well (especially from where the stock is trading today). The question is timing and this requires patience. (Importantly, the airport is increasing in value every year - you are getting paid handsomely while you wait.) What not to like about the current set up?

Man, I hate offering dissenting opinions with you, Viking, as you're knowledge, acumen and intellectual generosity is above reproach. But, my thoughts are not 100% in line with yours.

 

To answer the question of "What's not to like about the current setup?" I offer two things, and a third possibility"

• Yes, it has become almost a pure-play investment with BIAL. The issue is that, while we see this as undervalued right now, we MAY be wrong...or made wrong by the stroke of a governmental pen. I don't expect this, but if that comes true, we're in financial deep doo-doo.
• Those of us who bought this early in its history did so to provide patient capital to management to make long term investments in India. That's not been happening...few new investments over the past few years. I understand that it's wrong to "buy for buying sake", but the lack of new investments is concerning that, perhaps, we're not being sufficiently opportunistic...or we're sitting on capital loading up for an elephant where a few smaller targets would be better.

The term "Patient Capital" is key...like many others on this board, I have been patient which is what FIH, FFH, Berkshire, MKL and other like companies want. We've been rewarded by the latter 3, but FIH management has not done so as of yet. Someone referred to my earlier post as "bellyaching" and, while I see the point, I respectfully disagree. It's one thing if I bought this in the middle of Q1 this year and am bi***ing now, but, this position has been established for several years and, yeah, the returns have been suboptimal. In any relationship, both sides need to do their part and my brokerage statements demonstrate conclusively that I have done mine.

 

Finally, I really do want to reiterate what I said above in terms of your intellectual generosity. There are plenty of investment newsletters who charge good money offering less useful insights and analysis that you've provided for free on this board. I am wealthier because of you and, for that, you have my deepest appreciation.

 

-Crip

[73 Reds]

16 minutes ago, Crip1 said:

Man, I hate offering dissenting opinions with you, Viking, as you're knowledge, acumen and intellectual generosity is above reproach. But, my thoughts are not 100% in line with yours.

 

To answer the question of "What's not to like about the current setup?" I offer two things, and a third possibility"

• Yes, it has become almost a pure-play investment with BIAL. The issue is that, while we see this as undervalued right now, we MAY be wrong...or made wrong by the stroke of a governmental pen. I don't expect this, but if that comes true, we're in financial deep doo-doo.
• Those of us who bought this early in its history did so to provide patient capital to management to make long term investments in India. That's not been happening...few new investments over the past few years. I understand that it's wrong to "buy for buying sake", but the lack of new investments is concerning that, perhaps, we're not being sufficiently opportunistic...or we're sitting on capital loading up for an elephant where a few smaller targets would be better.

The term "Patient Capital" is key...like many others on this board, I have been patient which is what FIH, FFH, Berkshire, MKL and other like companies want. We've been rewarded by the latter 3, but FIH management has not done so as of yet. Someone referred to my earlier post as "bellyaching" and, while I see the point, I respectfully disagree. It's one thing if I bought this in the middle of Q1 this year and am bi***ing now, but, this position has been established for several years and, yeah, the returns have been suboptimal. In any relationship, both sides need to do their part and my brokerage statements demonstrate conclusively that I have done mine.

 

Finally, I really do want to reiterate what I said above in terms of your intellectual generosity. There are plenty of investment newsletters who charge good money offering less useful insights and analysis that you've provided for free on this board. I am wealthier because of you and, for that, you have my deepest appreciation.

 

-Crip

@Crip1  In the spirit of wholesome discussion, I think you are blaming the company for your mistake.  We all make investments with specific expectations.  When those expectations don't play out for whatever reason, we are free to act.  What I learned over the years is when looking at a downtrodden "undervalued" investment, there needs to be a reason why something will change for the better in order for the investment to be at all attractive.   Otherwise, I always tend to revert back to Newton's Law.

[TwoCitiesCapital]

They're probably #1 in line to purchase IDBI bank and have been working on that for a fair bit - along with acquiring additional stakes in BIAL and furthering IPO progress.

 

As a matter of fact, some people are complaining because Fairfax HAS done other things. And now we have people complaining they're not doing enough! There is literally nobody happy with the approach of the management - as always - price leads narrative and the narrative is negative now and people will find any way to justify it. 

 

The IPO of BIAL and IDBI auctions are binary outcomes. They either happen or they don't. None of the progress, time, capital, etc will make incremental improvements to give us comfort along the way - it'll all happen at once at the end. I'm optimistic about those outcomes and KNOW I'm getting a good price just by witnessing the narratives here. 

Edited December 13, 2025 by TwoCitiesCapital

[villainx]

It's around $7 billion for IDBI.  Deploying a big chunk of capital for FIH's stake, while receiving dividend and maybe earning fees, let's see.

 

 

 

 

[Viking]

3 hours ago, Crip1 said:

Man, I hate offering dissenting opinions with you, Viking, as you're knowledge, acumen and intellectual generosity is above reproach. But, my thoughts are not 100% in line with yours.

 

To answer the question of "What's not to like about the current setup?" I offer two things, and a third possibility"

• Yes, it has become almost a pure-play investment with BIAL. The issue is that, while we see this as undervalued right now, we MAY be wrong...or made wrong by the stroke of a governmental pen. I don't expect this, but if that comes true, we're in financial deep doo-doo.
• Those of us who bought this early in its history did so to provide patient capital to management to make long term investments in India. That's not been happening...few new investments over the past few years. I understand that it's wrong to "buy for buying sake", but the lack of new investments is concerning that, perhaps, we're not being sufficiently opportunistic...or we're sitting on capital loading up for an elephant where a few smaller targets would be better.

The term "Patient Capital" is key...like many others on this board, I have been patient which is what FIH, FFH, Berkshire, MKL and other like companies want. We've been rewarded by the latter 3, but FIH management has not done so as of yet. Someone referred to my earlier post as "bellyaching" and, while I see the point, I respectfully disagree. It's one thing if I bought this in the middle of Q1 this year and am bi***ing now, but, this position has been established for several years and, yeah, the returns have been suboptimal. In any relationship, both sides need to do their part and my brokerage statements demonstrate conclusively that I have done mine.

 

Finally, I really do want to reiterate what I said above in terms of your intellectual generosity. There are plenty of investment newsletters who charge good money offering less useful insights and analysis that you've provided for free on this board. I am wealthier because of you and, for that, you have my deepest appreciation.

 

-Crip

@Crip1 , as per usual, I appreciate the comments and the opportunity to debate/discuss. 
 

With any investment, starting point matters. With Fairfax India, mine is $16/share, bought a couple of weeks ago. That frames my thoughts on the investment.
 

I have said this before - Fairfax India is an enigma for me. I like management. I really like BIAL. The fee structure is what it is. Achorage IPO has been in the works for what seems like forever. So far, it has been a poor investment for many long term shareholders. It looked wicked cheap at $16. 
 

My strategy has been to hold Fairfax (the parent). And to trade Fairfax India. (With the shares help in my RRSP/LIF accounts so there are no tax implications.) The IPO of the airport is likely getting close enough that I might hold a small position in Fairfax India. 

From my perspective, long term shareholders have had many good opportunities to keep averaging down on weakness, with $16 being the latest. (Sell the shares added when it pops.) If I hold it as a permanent position that is what I will be doing. 
 

Best of luck.

 

Edited December 13, 2025 by Viking

[djokovic1]

On 12/12/2025 at 5:19 PM, SafetyinNumbers said:

They are also trying to run a business which means growing and strengthening their network. That means being able to do deals when they are available and keeping their investment professionals engaged. There is a balance. When the stock got hit in April, they did buy back stock. 

 

I have to disagree here. Decisions have to be made to maximise long term intrinsic value per share, and if Intrinsic value is truly at such a big discount then the buybacks are a no brainer compared to any other re-investment opportunities.

I think the problem is a bit more structural for Fairfax India, which is also a big difference between Fairfax and Fairfax India. Fairfax generates a lot of free cash flow. Fairfax India is instead a holding / investment company (i.e its intrinsic value is tied to its holdings rather than the cash flow it generates).

For Fairfax India this means, it doesn't have real significant cashflow to use towards buybacks to take advantage of the large potential gap between intrinsic value and price (unlike Fairfax). The cash flows can only be generated by selling its existing assets.

I don't disagree that FIH may be significantly undervalued. But I see a lot of companies in the UK too that are significantly undervalued. And the only way to solve that in the absence of flows is to take matters in your own hands with buying back your own shares with your cash flow if it's too cheap (eg. Plus500 on AIM - 5 year CAGR of 27% even though top and bottom line has been flat for 5 years! -> mainly driven by capital returns (Div + buyback) which also caused multiple expansion)

Btw. Prosus / Naspers is a great example of a holding company that has closed its discount a created lot of shareholder value through buybacks. It has sold its holdings in Tencent to continuously buy back shares at holding company (Prosus / Naspers) level. And since they have done that the discount has closed and share price has compounded at 30% CAGR + for 3 years. 

 

Unfortunately FIH doesn't really have that buyback lever, unless it can monitize its assets.
 

[LC]

Essentially this is a closed end fund that trades at a discount to NAV. One day it will liquidate and shareholders will get paid out close to NAV.

 

Your IRR will depend on how closely you buy to that liquidation event. 

 

Or you trade it like Viking suggests. IMO this isn't meant to be a long term investment for public minority shareholders, it's meant as a means for the Fairfax mothership to manage assets and investments in India. Reminds me a little of Brookfield and its related publicly traded investment vehicles: better to own the mothership.

 

But I agree with crip's dissatisfaction and also with djokovic's call for buybacks. The public market won't close the discount (why would it?), if management really cared about this trading near fair value they would do it themselves (liquidate non-BIAL holdings and buyback). But IMO that is not really the point of the vehicle. 

[SafetyinNumbers]

20 minutes ago, djokovic1 said:

I think the problem is a bit more structural for Fairfax India, which is also a big difference between Fairfax and Fairfax India. Fairfax generates a lot of free cash flow. Fairfax India is instead a holding / investment company (i.e its intrinsic value is tied to its holdings rather than the cash flow it generates).

FIH does get dividends from its portfolio companies. BIAL has the potential to start paying a dividend in 2029 when its latest capital program is complete which will help with new investments and buybacks. 

[SafetyinNumbers]

2 minutes ago, LC said:

Essentially this is a closed end fund that trades at a discount to NAV. One day it will liquidate and shareholders will get paid out close to NAV.

Why would it ever liquidate assuming FFH is still around?

[Hoodlum]

I came across this interesting analysis of how Kotak and Fairfax differ in their interest in IDBI.  That difference could work in Fairfax’s favour.  

 

https://www.linkedin.com/posts/ujwal-thakar-65b1951_fairfax-kotak-and-the-idbi-question-why-activity-7405482188441382912-Iy8K

 

 

Edited December 13, 2025 by Hoodlum

[Crip1]

22 hours ago, 73 Reds said:

@Crip1  In the spirit of wholesome discussion, I think you are blaming the company for your mistake.  We all make investments with specific expectations.  When those expectations don't play out for whatever reason, we are free to act.  What I learned over the years is when looking at a downtrodden "undervalued" investment, there needs to be a reason why something will change for the better in order for the investment to be at all attractive.   Otherwise, I always tend to revert back to Newton's Law.

 

I think we see eye to eye on this, specifically that if an investment doesn't work at the fault lies with the investor, not the investee. Mia culpa here. The thing preventing me from selling is that I like buying a dollar for $0.50, but I don't like selling a dollar for $0.50. And I think at current price FIH is worth a dollar but is selling for $0.50, so I don't plan on selling in the near future. It would be nice to see actions taken which will help the price move closer to the value.

 

If investing decisions were easy, everybody would be rich..

 

-Crip

Edited December 14, 2025 by Crip1

[djokovic1]

10 minutes ago, SafetyinNumbers said:

FIH does get dividends from its portfolio companies. BIAL has the potential to start paying a dividend in 2029 when its latest capital program is complete which will help with new investments and buybacks. 

 

But this a really small amount, see pg 71 from 2024 FIH annual report. ~50m of NII + div on a market cap of $2.3bn, that is really small at ~2% of market cap, even if all of it was deployed in buybacks it doesn't move the needle. Buybacks usually have a major impact in closing discounts when you buy ~10%+ shares out each year.

This comes back to my original point of a structural issue in the absence of flows coming in to close the discount.

 

 

[LC]

19 minutes ago, SafetyinNumbers said:

Why would it ever liquidate assuming FFH is still around?

 

It's not a perfect analogy - but essentially I envision periodic, big price discovery (monetization/liquidation) events (eg Anchorage/BIAL). In the interim you get what Crip is referencing - long periods of underpricing/underperformance because there is no price discovery event.

 

Given the fees paid to parent, the illiquidity of the underlying assets, poor ability to raise cash and close the discount, it's no wonder FIH trades at a discount.

 

I think the Prosus analogy is a decent one as well. 

 

Also what will happen if FIH wins IDBI? That will be a huge asset relative to the current market cap, and double so if FIH IPO's Anchorage. Essentially turning FIH into an IDBI holding company. The performance fee seems unjustified in that case.

[gfp]

9 minutes ago, LC said:

Also what will happen if FIH wins IDBI? That will be a huge asset relative to the current market cap, and double so if FIH IPO's Anchorage. Essentially turning FIH into an IDBI holding company. The performance fee seems unjustified in that case.

 

I don't think anyone envisions a $7 Billion chunk of IDBI going into FIH.  FIH will own some, but there are going to have to be financial partners like the pension funds and help from FFH parent.  If FIH "gets" IDBI I assume they will merge CSB in to it.

[SafetyinNumbers]

51 minutes ago, djokovic1 said:

Buybacks usually have a major impact in closing discounts when you buy ~10%+ shares out each year.

What are some Canadian examples? Is it percentage of shares outstanding that matters or percentage of float.

[SharperDingaan]

No dog in this, but a few observations.

 

FFH has Fairfax India and Fairfax Africa as long-term regional growth vehicles. FFH investors are free to participate at either the lower risk parent level (FFH), or the higher risk growth vehicle (India, Africa, etc). Assuming a buy/hold forever approach, it makes most sense for the young (via inheritances?) to hold the growth vehicles versus the parent. 

 

The growth vehicles make a great deal of sense when the investor doesn't have the connections &/or the expertise to invest in the regions directly; the alternative is a regional index fund, and associated expense. There will be ups/downs, but if the intent is to buy/hold forever it doesn't matter; what does matter is reasonable likelihood that the share price is 4-8x higher (depending on the CAGR), 20 yrs out.

 

The current price of 3rd world index funds is event/liquidity driven, and it will be the same with these vehicles. The alternative is to swing trade against a treasury position; systematically sell treasuries/buy the vehicle after big losses are reported, sell the vehicle, buy treasuries as/when there are liquidity events. Assuming an average 1 liquidity event 18 months, a would be market maker could do very well ... as long as the vehicle doesn't bankrupt. 

 

Old men hold the parent, grand-kids hold the regional subs, and the parents apply the gains from swing trades against the mortgage on the family house. Simultaneous and entirely different viable approaches, on the same stock.

 

SD

  

[This2ShallPass]

1 hour ago, djokovic1 said:

Btw. Prosus / Naspers is a great example of a holding company that has closed its discount a created lot of shareholder value through buybacks. It has sold its holdings in Tencent to continuously buy back shares at holding company (Prosus / Naspers) level. And since they have done that the discount has closed and share price has compounded at 30% CAGR + for 3 years. 

This is a good analogy and something they might be able to do post Anchorage IPO. Follow the same Prosus / Tencent model. Even without the IPO, BIAL value will increase, they have started marking up BV this year and will continue for a while. FIH price will follow (discount will likely persist though).

 

[73 Reds]

1 hour ago, SharperDingaan said:

No dog in this, but a few observations.

 

FFH has Fairfax India and Fairfax Africa as long-term regional growth vehicles. FFH investors are free to participate at either the lower risk parent level (FFH), or the higher risk growth vehicle (India, Africa, etc). Assuming a buy/hold forever approach, it makes most sense for the young (via inheritances?) to hold the growth vehicles versus the parent. 

 

The growth vehicles make a great deal of sense when the investor doesn't have the connections &/or the expertise to invest in the regions directly; the alternative is a regional index fund, and associated expense. There will be ups/downs, but if the intent is to buy/hold forever it doesn't matter; what does matter is reasonable likelihood that the share price is 4-8x higher (depending on the CAGR), 20 yrs out.

 

The current price of 3rd world index funds is event/liquidity driven, and it will be the same with these vehicles. The alternative is to swing trade against a treasury position; systematically sell treasuries/buy the vehicle after big losses are reported, sell the vehicle, buy treasuries as/when there are liquidity events. Assuming an average 1 liquidity event 18 months, a would be market maker could do very well ... as long as the vehicle doesn't bankrupt. 

 

Old men hold the parent, grand-kids hold the regional subs, and the parents apply the gains from swing trades against the mortgage on the family house. Simultaneous and entirely different viable approaches, on the same stock.

 

SD

  

One can easily hold both.  To your point, I own Fairfax India because of a lack of knowledge or true ability to evaluate and invest directly in Indian companies but trust management at both parent and sub.  That being said, I didn't own either until there was a specific reason; the parent simply got too cheap due to issues that appeared to have been corrected by management and the sub is a very cheap worthwhile holding due to the upcoming Anchorage IPO.       

[Hektor]

Cabinet approves Bill to hike FDI in insurance sector to 100%

 

https://www.bloomberg.com/news/articles/2025-12-12/india-cabinet-approves-100-foreign-investment-in-insurers

 

The Union Cabinet has approved a bill to raise foreign direct investment in the insurance sector to 100 per cent, a major reform aimed at expanding insurance penetration and attracting global capital. The move follows the proposal announced by Finance Minister Nirmala Sitharaman in the Union Budget and marks a significant shift from the existing 74 per cent cap on foreign ownership.

[Txvestor]

16 hours ago, Crip1 said:

Man, I hate offering dissenting opinions with you, Viking, as you're knowledge, acumen and intellectual generosity is above reproach. But, my thoughts are not 100% in line with yours.

 

To answer the question of "What's not to like about the current setup?" I offer two things, and a third possibility"

• Yes, it has become almost a pure-play investment with BIAL. The issue is that, while we see this as undervalued right now, we MAY be wrong...or made wrong by the stroke of a governmental pen. I don't expect this, but if that comes true, we're in financial deep doo-doo.
• Those of us who bought this early in its history did so to provide patient capital to management to make long term investments in India. That's not been happening...few new investments over the past few years. I understand that it's wrong to "buy for buying sake", but the lack of new investments is concerning that, perhaps, we're not being sufficiently opportunistic...or we're sitting on capital loading up for an elephant where a few smaller targets would be better.

The term "Patient Capital" is key...like many others on this board, I have been patient which is what FIH, FFH, Berkshire, MKL and other like companies want. We've been rewarded by the latter 3, but FIH management has not done so as of yet. Someone referred to my earlier post as "bellyaching" and, while I see the point, I respectfully disagree. It's one thing if I bought this in the middle of Q1 this year and am bi***ing now, but, this position has been established for several years and, yeah, the returns have been suboptimal. In any relationship, both sides need to do their part and my brokerage statements demonstrate conclusively that I have done mine.

 

Finally, I really do want to reiterate what I said above in terms of your intellectual generosity. There are plenty of investment newsletters who charge good money offering less useful insights and analysis that you've provided for free on this board. I am wealthier because of you and, for that, you have my deepest appreciation.

 

-Crip

I hear and feel your frustration, I suppose if I were sitting in it 11yrs seeing even the BSE triple whereas I'm up just 60-70% Id feel the same. 11yrs is certainly not being impatient. In the mean time Fairfax Africa was basically a failure, and rolled into Helios Africa fund. Investors there would have lost a significant chunk of their capital. So this sort of a risk was borne and is being borne by Fairfax India holders currently. so the returns measured over 11yrs are clearly inadequate except for some theoretical valuation we all have done to say it's undervalued.
Performance and advisory fees however are a reality and accrue triennially. 

Fortunately I initially traded Fairfax India out of the IPO gate for a nice profit and then sort of forgot about it until more recently, I got back in over the last 1.5yrs or so at about 15% under current levels as I sense some big moves coming. even so I'd have been better served from a risk reward standpoint by just buying the Fairfax mothership for a long term hold than waiting for the value unlocking event. Clearly luck can't be a strategy. 

In the interim it's gone to $20 and back down to $16. I think 2026 could be definitive, and if it's not, I may not be in it by this time next year. 

My Q is have you or anyone else asked this pointed question of management at the AGM? I think it's a reasonable question to ask at this point. 

Edited December 14, 2025 by Txvestor

[giulio]

A couple of observations from me:

1) fih is not a $1 selling for 50c; it's a GROWING $1 selling for 50c and this makes a big difference

2) prosus may not be the best analogy, they sold into tencent buybacks, keeping their % holding constant iirc. 

3) the best analogy imo is Pershing Square; 

4) if that's the case, then buybacks will have a minimal impact on the discount 

5) what I care is PERFORMANCE, I.e. NAV/BV growth. I want fih to expand, make investment and compound at 15%+.

6) When Anchorage is listed I want the proceeds to be invested in new infrastructure projects; they should hold cash if these are not available and possibly do a minor buyback if price is compelling enough.

7) On the 100% fdi insurance rule, I hope this allows them to one day buy the godigit shares they do not own. They don't need to raise cash anymore or have public markets validation. Keep everything in house, 100% controlled!

 

Best,

G

 

 

[dartmonkey]

A couple of observations from me:

1) fih is not a $1 selling for 50c; it's a GROWING $1 selling for 50c and this makes a big difference

… 

5) what I care is PERFORMANCE, I.e. NAV/BV growth. I want fih to expand, make investment and compound at 15%+.

…

 

Nice point, we are paid to wait. 

 

 

7) On the 100% fdi insurance rule, I hope this allows them to one day buy the godigit shares they do not own. They don't need to raise cash anymore or have public markets validation. Keep everything in house, 100% controlled!

 

You probably know this, but GoDigit is not owned by FIH. And even Fairfax FFH only owns a little less than 50% of it, so while the new law may give FFH some options if their partners wish to sell, it’s not just a matter of liquidity. 

 

 

More generally, the point was made that 11 years is a long time to be patient, and someone should ask management about this. What can management say? The trip is going well. Yes it’s long. No, we’re not there yet. Stop asking. Try to think about something else.