Fairfax India new issue

[TwoCitiesCapital]

On 12/12/2025 at 1:58 PM, TwoCitiesCapital said:

Honestly feels like the set-up for Fairfax in 2021 to me. Everything was going up except Fairfax. Plenty of investors threw in the towel after sitting  in it for years with no to show and the rest of the market going up around them.

 

Nobody wants to own this today. 

 

The value is obvious. There are catalyst potentially on the horizon. The management remains focused not just on BIAL, but other long term opportunities, and nobody wants to own it. Seems like I should be buying a hell of a lot more. 

 

Decided to put my money where my mouth was. Converted my 401k to self directed and increased my position by 50% today at $17.00. 

Edited December 19, 2025 by TwoCitiesCapital

[villainx]

22 minutes ago, TwoCitiesCapital said:

Converted my 401k to self directed and increased my position by 50% today at $17.00. 

 

!!!!!!!!!

[CoGreenwich&Laight]

Corporate governance reform / reducing discount to nav actions. Article from FT yesterday. 1st 3 have free access. 

 

https://giftarticle.ft.com/giftarticle/actions/redeem/2097e32e-aac8-4f9b-9223-d0cdc30ba30b

"The routine rubber-stamping of such transactions by compliant boards and a largely toothless shareholder base reinforced the notion that Korea was run by and for its largest shareholders."

"In 2025, the government has been sprinting to change this. After an overhaul, the country’s corporate governance code now requires directors to consider all shareholders, not just the “company”. Cumulative voting, which enables minority shareholders to concentrate their votes on specific board candidates in proxy fights, is no longer optional for large listed companies with assets over Won2tn; if a shareholder with just 1 per cent requests it, boards must allow it. And there is now a cap on voting rights for any single shareholder — 3 per cent — for the election of board audit committee members, constraining the influence of controlling parties on these critical positions."

 

"Companies are acting, too. Along with other investments in the country, my fund has a stake in SK Square, which has been an early leader in corporate governance improvement, narrowing the discount of its share price to net asset value from over 70 per cent to 50 per cent by divesting non-core businesses and buying back stock."

 

 

[CoGreenwich&Laight]

 

"Turns out discounts close when accountability shows up. "

 

https://x.com/boazweinstein/status/2002077686471282722?s=20

[Viking]

1 hour ago, CoGreenwich&Laight said:

Corporate governance reform / reducing discount to nav actions. Article from FT yesterday. 1st 3 have free access. 

 

https://giftarticle.ft.com/giftarticle/actions/redeem/2097e32e-aac8-4f9b-9223-d0cdc30ba30b

"The routine rubber-stamping of such transactions by compliant boards and a largely toothless shareholder base reinforced the notion that Korea was run by and for its largest shareholders."

"In 2025, the government has been sprinting to change this. After an overhaul, the country’s corporate governance code now requires directors to consider all shareholders, not just the “company”. Cumulative voting, which enables minority shareholders to concentrate their votes on specific board candidates in proxy fights, is no longer optional for large listed companies with assets over Won2tn; if a shareholder with just 1 per cent requests it, boards must allow it. And there is now a cap on voting rights for any single shareholder — 3 per cent — for the election of board audit committee members, constraining the influence of controlling parties on these critical positions."

 

"Companies are acting, too. Along with other investments in the country, my fund has a stake in SK Square, which has been an early leader in corporate governance improvement, narrowing the discount of its share price to net asset value from over 70 per cent to 50 per cent by divesting non-core businesses and buying back stock."

 

 

The article certainly summarizes the situation at Fairfax India perfectly (I am being sarcastic). From the article:

“The Korea discount stemmed from investors’ fears of abusive transactions, especially value-destructive mergers and acquisitions and related-party deals to support family empire-building and estate planning. The routine rubber-stamping of such transactions by compliant boards and a largely toothless shareholder base reinforced the notion that Korea was run by and for its largest shareholders.”

 

[CoGreenwich&Laight]

FIH has 11 directors, Apple has 8. Of the 11, only 2, just 2, dont have an affiliation to FFH, Hodgson and Kenny. The rest either work there, are on the Board of the parent, or have worked for or are on the Board of one of the investees. The Board has one legal obligation, to look after the interests of shareholders. With a rubber stamp conflicted Board, 9 of the 11 being related in one way or another, and of the other 2, the Lead Director is Christopher Hodgson who has been there since prior to FIHs IPO. He owns a WHOPPING 5000 share. In 11 years, 5000 shares. Incentives drive human behavior. The sycophant Board is cuckold. These are the reasons for the discount.

 

link to 2024 Proxy page 7 for you to read on your own.

2024-Proxy-Circular (3).pdf

[Crip1]

1 minute ago, CoGreenwich&Laight said:

FIH has 11 directors, Apple has 8. Of the 11, only 2, just 2, dont have an affiliation to FFH, Hodgson and Kenny. The rest either work there, are on the Board of the parent, or have worked for or are on the Board of one of the investees. The Board has one legal obligation, to look after the interests of shareholders. With a rubber stamp conflicted Board, 9 of the 11 being related in one way or another, and of the other 2, the Lead Director is Christopher Hodgson who has been there since prior to FIHs IPO. He owns a WHOPPING 5000 share. In 11 years, 5000 shares. Incentives drive human behavior. The sycophant Board is cuckold. These are the reasons for the discount.

 

link to 2024 Proxy page 7 for you to read on your own.

2024-Proxy-Circular (3).pdf 336.52 kB · 0 downloads

Yeah, there is something a little concerning when I own more of a company than a board member. Betting scores of folks posting here can say the same thing.

 

-Crip

[CoGreenwich&Laight]

9 minutes ago, Viking said:

The article certainly summarizes the situation at Fairfax India perfectly (I am being sarcastic). From the article:

“The Korea discount stemmed from investors’ fears of abusive transactions, especially value-destructive mergers and acquisitions and related-party deals to support family empire-building and estate planning. The routine rubber-stamping of such transactions by compliant boards and a largely toothless shareholder base reinforced the notion that Korea was run by and for its largest shareholders.”

 

The article discusses the Korea discount, as well actions by a company to reduce the NAV discount. And yes, I do believe this is a compliant Board per my last post, and the shareholder base is toothless - due to the supervoting shares. Another reason for the discount.

[CoGreenwich&Laight]

4 minutes ago, Crip1 said:

Yeah, there is something a little concerning when I own more of a company than a board member. Betting scores of folks posting here can say the same thing.

 

-Crip

If they dont own anything but a superficial amount of shares, they have no incentive to maximize the value for the rest of us. Need a wholesale change with the Board. Interested shareholders should form a group and write to the company and push for an improvement in our situation.

[CoGreenwich&Laight]

conflicts underlined in red. other than watsa' and ceo.

[CoGreenwich&Laight]

But hey, its going real well for them. Their cost basis is...negative. $-0.82 as per my calculation below, way better than mine...or yours. Cant lose money and it will only get better. Toothless shareholders...hmmmm.

 

 

[hardcorevalue]

I can't fathom being a director and not owning a decent chunk of shares just to be aligned mentally. 

 

[SafetyinNumbers]

15 minutes ago, hardcorevalue said:

I can't fathom being a director and not owning a decent chunk of shares just to be aligned mentally. 

 

Some directors are really good at administration and legal matters. They are really important at making sure that things are done correctly. I didn’t appreciate that until recently. 

[SafetyinNumbers]

Fairfax India is doing podcasts to help shareholders understand the holdings and get to know the management teams better.

 

Here is the first one on BIAL:

 

https://www.fairfaxindia.ca/podcast/

[Hsmpanl]

52 minutes ago, SafetyinNumbers said:

Fairfax India is doing podcasts to help shareholders understand the holdings and get to know the management teams better.

 

Here is the first one on BIAL:

 

https://www.fairfaxindia.ca/podcast/

This is an incredible idea… hope it’s a good listen!

[djokovic1]

Yeah its really good, I don't own any Fairfax India, but just listening to it makes me want to learn more about BIAL and its long term value.

[This2ShallPass]

On 12/19/2025 at 12:06 PM, CoGreenwich&Laight said:

FIH has 11 directors, Apple has 8. Of the 11, only 2, just 2, dont have an affiliation to FFH, Hodgson and Kenny. The rest either work there, are on the Board of the parent, or have worked for or are on the Board of one of the investees. The Board has one legal obligation, to look after the interests of shareholders. With a rubber stamp conflicted Board, 9 of the 11 being related in one way or another, and of the other 2, the Lead Director is Christopher Hodgson who has been there since prior to FIHs IPO. He owns a WHOPPING 5000 share. In 11 years, 5000 shares. Incentives drive human behavior. The sycophant Board is cuckold. These are the reasons for the discount.

 

link to 2024 Proxy page 7 for you to read on your own.

2024-Proxy-Circular (3).pdf 336.52 kB · 1 download

Irrespective of how we feel about the whole situation, aren't these some fundamental structural issues? Does anyone expect this board to act in our interest?

 

[SafetyinNumbers]

27 minutes ago, This2ShallPass said:

Irrespective of how we feel about the whole situation, aren't these some fundamental structural issues? Does anyone expect this board to act in our interest?

 

The structural issues are it’s not eligible for passive ETFs, it’s a PFIC and it doesn’t screen well for quants. It’s hard to replace that demand for shares so the price is set by the marginal buyer who wants a big discount to BV. Could they be more like Brookfield and mark everything to a full valuation? Probably not, because it’s not the culture. 

[Hsmpanl]

2 hours ago, This2ShallPass said:

Irrespective of how we feel about the whole situation, aren't these some fundamental structural issues? Does anyone expect this board to act in our interest?

 

Personally, I trust Prem and Fairfax. They’ve always done right by partners and shareholders. Yes Fairfax has unchecked authority to do basically whatever they want with Fairfax India, you have to be comfortable that they aren’t going to use that nefariously. If you’re not then I wouldn’t own FIH.

[CoGreenwich&Laight]

2 hours ago, This2ShallPass said:

Irrespective of how we feel about the whole situation, aren't these some fundamental structural issues? Does anyone expect this board to act in our interest?

 

There are people on both sides of the fence. To measure their aptitude towards their fiduciary duty, the Funds underlying performance, their attitude to shareholders, some feel the last 11 years are enough, and some not so. Some on here were shocked that the Lead Director Hodgson over 11 years owned just 5,000 shares. Worse is that the CEO Ratnaswami owned only 7,000. For those who dont want to leave the next performance period of the shares to their benevolence, to their nonchalance, to chance, there is no downside to expressing our concerns and suggestions, as a collective to the Board. Wheres the downside? Now its one subservient troop member competing to genuflect even deeper to the Emperor at every chance. Change comes with every cremation. PW has passed the baton.

 

To quote James Baldwin, ""Not everything that is faced can be changed, but nothing can be changed until it is faced."

[This2ShallPass]

45 minutes ago, CoGreenwich&Laight said:

There are people on both sides of the fence. To measure their aptitude towards their fiduciary duty, the Funds underlying performance, their attitude to shareholders, some feel the last 11 years are enough, and some not so. Some on here were shocked that the Lead Director Hodgson over 11 years owned just 5,000 shares. Worse is that the CEO Ratnaswami owned only 7,000. For those who dont want to leave the next performance period of the shares to their benevolence, to their nonchalance, to chance, there is no downside to expressing our concerns and suggestions, as a collective to the Board. Wheres the downside? Now its one subservient troop member competing to genuflect even deeper to the Emperor at every chance. Change comes with every cremation. PW has passed the baton.

 

To quote James Baldwin, ""Not everything that is faced can be changed, but nothing can be changed until it is faced."

I agree there's not much downside to expressing our concerns,  at least they should know. It might even be better to write directly to Ben in X. A bunch of unhappy shareholders expressing concern publicly might get a better response.

 

CEO owning only 7000 shares is shocking..

[hobbit]

4 hours ago, This2ShallPass said:

I agree there's not much downside to expressing our concerns,  at least they should know. It might even be better to write directly to Ben in X. A bunch of unhappy shareholders expressing concern publicly might get a better response.

 

CEO owning only 7000 shares is shocking..

my understanding is that chandran then and gopal now are mere figure heads for compliance purposes. the real work was done by Harsha and now Sumit and team. If you are looking for alignment of interests apart from obvious alignment of FFH,  you should be looking at how much shares Harsha owned or still owns and how much shares Sumit owns and how much of his liquid net worth is invested in FIH shares . 

Also for someone looking for an understanding of what Prem's perspective is on FIH mgmt fees, please read some of the annual meeting transcripts online , it comes up more than a couple of times and is a heated exchange. I do not hold FFH mgmt in any regard when it comes to equity investing however in FIH case they are absolutely fishing in the right pool.

Edited December 22, 2025 by hobbit
update

[hardcorevalue]

I don't really care if they are figureheads, they are on the board.

 

Those are rookie numbers, they've gotta pump those numbers up.

 

It's kind of wild that my retiree mother owns more shares than some board members. 

[jbwent63]

16 hours ago, This2ShallPass said:

I agree there's not much downside to expressing our concerns,  at least they should know. It might even be better to write directly to Ben in X. A bunch of unhappy shareholders expressing concern publicly might get a better response.

 

CEO owning only 7000 shares is shocking..

While it may seem the FIH directors are under invested, do any of them have stakes in FFH of size, and therefore indirectly hold more shares of FIH than is disclosed in the FIH proxy statement? For example Ben and Prem... (Note, I haven't looked at the FFH proxy to tell, just making a general comment about indirect ownership that is possible).

[hardcorevalue]

I do trust FFH to do the right thing but Isn't part of the issue the potential conflicts with the parent? 

 

How does that help?

 

Also, FIH Isn't even a dominant asset on their balance sheet. the priority mentally would still be FFH, not FIH.