Fairfax India new issue

[Txvestor]

29 minutes ago, dartmonkey said:

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. 

So, are we paid to wait, or are we paying to wait?  

 

Sure you'd expect a boiler plate answer on the 11yr Q but it's a way to register protest and also pile on some pressure to at an opportune time take some value add actions. It's a very reasonable thing to make them aware that shareholders are not happy and their track record to date both on this and Fairfax Africa has been poor. That's just the reality. 

[LC]

Agree with @Txvestor 

 

The more I think about it, the more I don't like this FFH <-> FIH setup as a long term investment vehicle, from the perspective as an outside minority shareholder of FIH. (For Fairfax parent, it's a great "Heads I win, tails I don't lose" situation) 

 

Everything based on book value...well the market price becomes irrelevant. And lo and behold, the market returns have indeed been irrelevant. There is no incentive to correct for this. Over the short term that is OK - but over the long term, management should be aligning market value with fair value. 

 

And if controlling stakeholders don't care about that, why is this listed as a publicly traded vehicle? I don't think it's for the benefit of public investors.

 

I'm probably jaded from Atlas/Poseidon but this does smell a bit like a "Fair and friendly" setup. 

 

And full disclosure: I've got a few shares here as a trade, most recently purchased in the 16s. But its invisible compared to my Fairfax investment which is ~35% of my portfolio.

[CoGreenwich&Laight]

On 12/9/2025 at 8:46 PM, Xerxes said:

Prem has repeatedly mentioned that financials are the best assets to own in a growing economy. Believe he gave the example of Singapore. 
 

Why would we not want for FIH to take a big swing at these privatizations opportunities or other like assets. 
 

Buying back shares in an ocean that is full of opportunities (India) would be incredibly short sighted of them, and should be the very last resort. 

 

On 12/9/2025 at 11:25 PM, villainx said:

 

Feels like these kinda deals is something Fairfax is good at pulling off though.

 

On 12/10/2025 at 12:01 PM, TwoCitiesCapital said:

Yea, I'm ok with them deploying energy/capital/resources into the bank. 

 

I don't mind the exposure/diversification that will make FIH something other than a direct play on the airport - particularly once the airport IPOs then they'll be looking for other avenues of growth and capital deployment and I don't want them to pass on this simply because the timing is inconvenient. 3-4 of these large infrastructure investments is what I'm hoping for our do the long-term nature of the structure. 

If you want financials exposure, its easily attained. In a far more liquid form. With even better performance. And no absurd, unearned leakage of fees, nor risk of reinvestment. See attached chart on ADRs of HDFC, ICICI, and the govt! owned SBI. FIH performance is pathetic. 72% over 11 years vs 204%-244%. Management should be ashamed, that they are a third of other accessible financials. They should desist from non-airport investments, divest from non BIAL investments, and buyback stock. We can get as much financials exposure as needed but not airports. This is the only way to get closer to intrinsic value. Getting involved in IDBI is unnecessary, the price has tripled since this misadventure started. It would be poisonous to the discount narrowing.

[TwoCitiesCapital]

I just can't take anyone seriously when they take the share price as the measure of return - particularly for CEFs where one of the widely known risk factors is deviations from NAV. 

 

With this logic, Zuck should have been fired from Meta in 2022 when they lost 80% of their MV and went back share prices of 2015.

"7-years with nothing to show for it?!?! In a bull market?!?! A trash CEO at best IMO!!! Could've made more money buying bonds!!! How is this guy a billionaire CEO?!?"

 

It's the NAV growth that I care about. Im good with that measure, largely believe it to be understated making it even more favorable, and can buy at a significant discount to that amount. The share price will take care of itself over time and I'm entirely unconcerned with the backwards looking performance - that is entirely why the opportunity exists today. 

Edited December 14, 2025 by TwoCitiesCapital

[CoGreenwich&Laight]

And if the Anchorage IPO is to happen, this share buyback should be accelerated and be explosive, or have a tender as suggested earlier by someone else. I like the idea of compounding with the airports value thru 100mm pax but as im unlikely to see that fully reflected in FIH, i almost prefer a trade sale, they will pay up, assuming we get a div from the proceeds.

[villainx]

 

39 minutes ago, LC said:

Everything based on book value...well the market price becomes irrelevant. And lo and behold, the market returns have indeed been irrelevant. There is no incentive to correct for this. Over the short term that is OK - but over the long term, management should be aligning market value with fair value. 

 

 

Presumably with Anchorage IPO and if FIH wins IDBI, this flips quite a bit to market prices swing book value, right?

 

 

[djokovic1]

7 hours ago, giulio said:

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

 

This is incorrect. Prosus is a good analogy however the difference being Tencent is liquid, whereas BIAL is not (until an IPO).

 

21 hours ago, SafetyinNumbers said:

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

 

Its % of total shares out. If a stock is at 5x PE and uses all its cashflows to buyback shares then it grows EPS and intrinsic value 20% in that year (even if revenue / profits are stagnant). It's rare but happens, Plus500 was an example of this.

Terravest is a Canadian company that has used buybacks smartly and also issued shares when multiples have gone up. It has compounded at 40%+ for 10 years, a 30x in 10 years! (The smart buybacks and share issues have helped but most of the value creation has been M&A).

[Hoodlum]

22 minutes ago, villainx said:

 

 

 

Presumably with Anchorage IPO and if FIH wins IDBI, this flips quite a bit to market prices swing book value, right?

 

 

Even if there is no anchorage IPO, an IDBI purchase would likely involve FIH with additional shares being issued.  With OMERS owning ~15% of FIH today and likely being involved with any new FIH share issue, they will want the shares issued at closer to current intrinsic value. 

[Hektor]

https://www.moneycontrol.com/news/india/bengaluru-s-2nd-airport-karnataka-floats-tender-to-appoint-consultant-for-feasibility-study-of-three-shortlisted-sites-13723868.html#
 

 

Bengaluru’s 2nd airport: Karnataka floats tender to appoint consultant for feasibility study of three shortlisted sites

[hardcorevalue]

10 hours ago, Txvestor said:

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. 

 

In regards to your question, has this been asked at the AGM? 

 

Yes, and it seems to be their answer is along the lines of the stock price will approach IV in the end but knowing when is impossible to forecast. 

 

While I don't disagree, it's difficult watching fees continue to accrue.

 

Yes FFH are the biggest shareholders but they are being paid to wait while we are paying to wait. 

[villainx]

15 minutes ago, Hoodlum said:

an IDBI purchase would likely involve FIH with additional shares being issued.  With OMERS owning ~15% of FIH today and likely being involved with any new FIH share issue, they will want the shares issued at closer to current intrinsic value.

 

 

How would that work?  Some on this board said FIH will just be GP, but they still have to put in a sizable stake.  With shares at discount now, issuing more shares seems like ... an issue?

 

I know Fairfax can be creative but I guess will have to see.

[SafetyinNumbers]

25 minutes ago, djokovic1 said:

 

This is incorrect. Prosus is a good analogy however the difference being Tencent is liquid, whereas BIAL is not (until an IPO).

 

 

Its % of total shares out. If a stock is at 5x PE and uses all its cashflows to buyback shares then it grows EPS and intrinsic value 20% in that year (even if revenue / profits are stagnant). It's rare but happens, Plus500 was an example of this.

Terravest is a Canadian company that has used buybacks smartly and also issued shares when multiples have gone up. It has compounded at 40%+ for 10 years, a 30x in 10 years! (The smart buybacks and share issues have helped but most of the value creation has been M&A).

I don’t think we can compare operating companies to closed end funds. Terravest stock really took off when it was insight of being added to the TSX Composite. FIH has no hope of that. 
 

ELF, UNC and EVT are closer to FIH and they have done buybacks, capital return and stock splits but the discount hasn’t closed much because there is no passive demand and active investors have high return expectations. 

[SafetyinNumbers]

9 minutes ago, villainx said:

 

 

How would that work?  Some on this board said FIH will just be GP, but they still have to put in a sizable stake.  With shares at discount now, issuing more shares seems like ... an issue?

 

I know Fairfax can be creative but I guess will have to see.

Zero chance FIH will issue equity in my opinion. They can contribute CSB in kind for IDBI shares and put up some cash. 

[villainx]

3 minutes ago, SafetyinNumbers said:

Zero chance FIH will issue equity in my opinion. They can contribute CSB in kind for IDBI shares and put up some cash. 

 

That doesn't seem like an all cash offer.

 

 

[Hoodlum]

4 minutes ago, villainx said:

 

 

How would that work?  Some on this board said FIH will just be GP, but they still have to put in a sizable stake.  With shares at discount now, issuing more shares seems like ... an issue?

 

I know Fairfax can be creative but I guess will have to see.

With any new FIH share issue, Fairfax would likely purchase 35-40% of the new shares to keep them close to their existing 43% ownership of FIH (~$2.5B).  OMERS will want to do the same to at least continue owning 15%.  

I could see other Canadian Pension funds get involved.  Then remaining new shares would be available to brokers. I suspect that Fairfax already has commitments from the pension funds which is why we are hearing of a cash only purchase of IDBI.  
 

I could see all of this getting done through FIH at a price much higher than the current FIH share price, as both Fairfax and OMERS want new shares issued at closer to current intrinsic value.

[SafetyinNumbers]

1 hour ago, TwoCitiesCapital said:

just can't take anyone seriously when they take the share price as the measure of return - particularly for CEFs where one of the widely known risk factors is deviations from NAV. 

 

Not only a CEF but also a CEF of private equity investment with a sponsor unlike all of its PE peers known for using very conservative valuations. It’s easy to see in the track record that the monetized and public equities have well outperformed the private names. Are they just bad at buying private names or are they conservative in their valuation assumptions? One look at the discount rates and terminal growth rates used and it’s pretty obvious. 

[SafetyinNumbers]

2 minutes ago, villainx said:

 

That doesn't seem like an all cash offer.

 

 

IDBI can issue new equity for the CSB stake. The LPs put up the new cash. It’s not that difficult to see how it can happen. There is still going to be a public listing. 

[djokovic1]

24 minutes ago, SafetyinNumbers said:

ELF, UNC and EVT are closer to FIH and they have done buybacks, capital return and stock splits but the discount hasn’t closed much because there is no passive demand and active investors have high return expectations. 

I dont think either three of them have bought back 10% of shares outstanding each year for lets say three consecutive years (or even 1 year!) so I wouldn't expect the discount to close.

[villainx]

46 minutes ago, SafetyinNumbers said:

IDBI can issue new equity for the CSB stake. The LPs put up the new cash. It’s not that difficult to see how it can happen. There is still going to be a public listing. 

 

Just looking at FIH ownership % of investments:  15.2% IIFL Finance, 24.6% 5paisa, 27.3% IIFL Capital, 40% CSB Bank, and 42.9% Sanmar.

 

So what are you thinking FIH actual ownership in IDBI win?

[Xerxes]

4 hours ago, TwoCitiesCapital said:

It's the NAV growth that I care about. Im good with that measure, largely believe it to be understated making it even more favorable, and can buy at a significant discount to that amount. The share price will take care of itself over time and I'm entirely unconcerned with the backwards looking performance - that is entirely why the opportunity exists today. 

I agree about NAV. 
 

Broadening the components of the NAV (more than airport proxy) would also help with the discount. 

[SafetyinNumbers]

3 hours ago, djokovic1 said:

I dont think either three of them have bought back 10% of shares outstanding each year for lets say three consecutive years (or even 1 year!) so I wouldn't expect the discount to close.

10% of shares outstanding a year is a crazy number to expect. It’s essentially a go private and as soon as the buying is done the discount will widen again and the buying wouldn’t have as much economic benefit. Better doing it slowly at bigger discounts. 

[SafetyinNumbers]

1 hour ago, Xerxes said:

Broadening the components of the NAV (more than airport proxy) would also help with the discount. 

Arguably the only reason the discount is as small as it is now is because the airport is so big. It makes it a much easier bet for institutions. 

[SafetyinNumbers]

3 hours ago, villainx said:

So what are you thinking FIH actual ownership in IDBI win?

probably better to look at the dollar amount and not the percentage. They would have control as GP anyway.

[MMM20]

58 minutes ago, SafetyinNumbers said:

10% of shares outstanding a year is a crazy number to expect. It’s essentially a go private and as soon as the buying is done the discount will widen again and the buying wouldn’t have as much economic benefit. Better doing it slowly at bigger discounts. 

Prosus recently ramped the buyback back up to that sort of annualized rate after the discount widened out a bit again. That’s a pretty unique case because they don’t pay capital gains on the Tencent sales, the CEO is in line for a massive bonus and the discount was/is so wide that you’re getting more Tencent per Prosus share even as they’re selling Tencent. Isn’t FFH buying back almost that much recently? MGM and IAC too. I can give you more. The cash generation and alignment have to be there. 
 

Edited December 14, 2025 by MMM20

[villainx]

50 minutes ago, SafetyinNumbers said:

probably better to look at the dollar amount and not the percentage. They would have control as GP anyway.

 

you are saying FIH will own 3-7% of IDBI, putting in $400-$700 million USD depending on cash in addition to CSB bank stake, where other partners will put in $6.6 billion?