SafetyinNumbers Posted January 14 Posted January 14 4 minutes ago, TwoCitiesCapital said: While I'm sure shareholders might prefer a one-time re-rating for a 50% pop in share price... A long-term discount of 35-40% is constantly providing management the opportunity of a 50+% RoE simply by giving away $0.60 to buy $1.00 worth of assets. Even if the discount never closes, that RoE is gonna drive long-term returns on incremental capital in addition to whatever the underlying portfolio does. 20+ years of having a 50+% RoE opportunity ultimately may be better for long term shareholders than a one-time 50% pop Sure but if they want to stay public there is a conflict. With ELF, they keep picking away at shares but at a much lower rate than when the discount was wider. With both ELF and FIH, there are good reasons to remain public and both have shareholders who think it’s a scheme to take the company private on the cheap which I think is nonsense.
djokovic1 Posted January 15 Posted January 15 18 hours ago, SafetyinNumbers said: Exactly. The discount to BV was 35% in 2015. It ballooned to ~45% by the time they started buybacks in 2020, bought back half of the float, raised the regular dividend 30x, paid big special dividends and split the shares 100-1. The discount is still about 35%. But look, they have barely made a dent in the share count in 5 years, so their buybacks are not a needle mover. This wouldn't qualify as meaningful buybacks in my world. If I was a shareholder, I would be screaming for big buybacks as a % of shares outstanding (not of free float, for me that is irrelevant). If they have the cashflow to do that you either get huge intrinsic value / share compounding or the share price will naturally go up as you will eat up all the sellers. The shareholder / the company wins both ways as long as the buyback is done at a meaningful discount to intrinsic value. If I was running this company, my mentality would be one of taking it private. If it truly trades at 5x sustainable earnings and I have the cashflow to prove it, I want to get my hands on every share I can at that price. Why not?
SafetyinNumbers Posted January 15 Posted January 15 26 minutes ago, djokovic1 said: But look, they have barely made a dent in the share count in 5 years, so their buybacks are not a needle mover. This wouldn't qualify as meaningful buybacks in my world. If I was a shareholder, I would be screaming for big buybacks as a % of shares outstanding (not of free float, for me that is irrelevant). If they have the cashflow to do that you either get huge intrinsic value / share compounding or the share price will naturally go up as you will eat up all the sellers. The shareholder / the company wins both ways as long as the buyback is done at a meaningful discount to intrinsic value. If I was running this company, my mentality would be one of taking it private. If it truly trades at 5x sustainable earnings and I have the cashflow to prove it, I want to get my hands on every share I can at that price. Why not? It doesn’t trade at 5x earnings it’s a holding company like FIH. The family and the company itself controlled 3m out of 4m shares at the end of 2019 when they started and now it’s 300m out of 345m shares. They don’t want to take it private much like FFH doesn’t want to take FIH private. In ELF’s case there are no real benefits from being private and likely gives them less tools the next time there is a market dislocation. If you don’t think stock prices are based on supply and demand then there isn’t much to talk about. Fwiw, the stock has done pretty well despite the discount not changing much.
djokovic1 Posted January 15 Posted January 15 (edited) 48 minutes ago, SafetyinNumbers said: If you don’t think stock prices are based on supply and demand then there isn’t much to talk about. Fwiw, the stock has done pretty well despite the discount not changing much. Yes that's a pretty good return! My main point is don't expect the discount to close by buying a small amount of shares outstanding. It really only works if you can buy a meaningful amount (10% + of total shares outstanding) each year. If the structure restricts you from doing that, then it's a handicap and you have one arm tied behind your back i.e you can't really use the buyback tool to take advantage of the dislocation. I would rather bet on stock prices following intrinsic value creation over the long term (although supply demand can definitely have an impact in the short term). Edited January 15 by djokovic1
dartmonkey Posted January 15 Posted January 15 32 minutes ago, djokovic1 said: Yes that's a pretty good return! My main point is don't expect the discount to close by buying a small amount of shares outstanding. It really only works if you can buy a meaningful amount (10% + of total shares outstanding) each year. If the structure restricts you from doing that, then it's a handicap and you have one arm tied behind your back i.e you can't really use the buyback tool to take advantage of the dislocation. I would rather bet on stock prices following intrinsic value creation over the long term (although supply demand can definitely have an impact in the short term). I believe FFH owns 40% of FIH shares, why not repurchase most of the other 60% (but not ours, of course) and then, as the squeeze comes, bidding for the final non-FFH shares (ours), the price would rise up close to fair value. At that point, they could start issuing small numbers of shares to reestablish a public share base, having generated a ton of value for remaining holders and having provided an opportunity for us to sell a few shares if we needed the liquidity, no?
gfp Posted January 15 Posted January 15 (edited) A Freaking POD CAST?? https://www.fairfaxindia.ca/podcast/?utm_source=newsletter&utm_medium=email&utm_term=Thu+Jan+15+2026&utm_campaign=Fairfax+India+Podcast+-+Episode+1 It's really good. Definitely skip the entire beginning it is all forward looking statements disclaimers. Great idea guys Edited January 15 by gfp
gfp Posted January 16 Posted January 16 1 hour ago, Haryana said: This was already posted here a while ago and a few here watched and discussed about it. By the sound of your enthusiasm I thought Episode2 was uploaded but nothing new there. Haha - i just got an email about it today but didn't see it during the holidays
valueinvesting101 Posted January 16 Posted January 16 https://economictimes.indiatimes.com/opinion/et-commentary/does-tiger-global-leave-investors-confused-or-finally-put-economic-substance-over-legal-form/articleshow/126550812.cms?from=mdr Fairfax has structured investments of Fairfax India via Mauritius entity to get favorable tax treatment. This was established pattern for foreign investments in India for last two decades. This mostly adds new tax/legal complications for realizing Fairfax India's all investments.
gfp Posted January 16 Posted January 16 1 hour ago, valueinvesting101 said: https://economictimes.indiatimes.com/opinion/et-commentary/does-tiger-global-leave-investors-confused-or-finally-put-economic-substance-over-legal-form/articleshow/126550812.cms?from=mdr Fairfax has structured investments of Fairfax India via Mauritius entity to get favorable tax treatment. This was established pattern for foreign investments in India for last two decades. This mostly adds new tax/legal complications for realizing Fairfax India's all investments. Thanks for posting the article. I guess someone needs to tell Ben Watsa he has to move to Mauritius to keep the capital gains taxes down... Fortunately for everybody, Fairfax India ought not to have any short term gains and the long term capital gains tax rate in India appears to be pretty reasonable (12.5% plus certain surcharges) - maybe something like 15%.
Hektor Posted January 18 Posted January 18 https://www.thehindu.com/news/cities/chennai/tn-government-faces-setback-as-defence-ministry-rejects-proposal-to-set-up-airport-in-hosur/article70519070.ece# T.N. government faces setback as Defence Ministry rejects proposal to set up airport in Hosur In a letter sent last week, the Minister said Hindustan Aeronautics Limited needed the airspace in the region and denied the request from the Tamil Nadu government
Hoodlum Posted January 21 Posted January 21 The Indian government has invited bids to be submitted, with the winning bidder to be announced by the end of March. https://www.ndtvprofit.com/business/idbi-sale-10797773/amp/1
hobbit Posted January 21 Posted January 21 (edited) details on BIAL airport city and second airport Edited January 22 by hobbit
Hoodlum Posted January 30 Posted January 30 (edited) The Indian government has requested that final bids for IDBI be submitted before the end of next week. https://www.moneycontrol.com/news/business/dipam-sets-february-5-deadline-for-final-idbi-bank-bids-13800733.html The divestment of IDBI Bank is said to have entered the last leg . Highly placed sources aware of the development say shortlisted bidders have been asked to place final bids by February 5 . “An invite for final bid along with the deadline was sent to select bidders,” said a highly placed sources who didn’t want to be named. The communication was sent from DIPAM (Department of Investment and Public Asset Management) to the three contenders, namely Kotak Mahindra Bank, Emirates NBD and Fairfax India Holdings around the third week of January this year. “It has been sent along with the final bid document and bidders will quote the acquisition price in the final bid”, said another source. Given that IDBI Bank is a listed entity, the final bid price is expected to reflect the acquisition price applicable for takeovers as per Sebi norms. This means that the H1 or highest bid will be the highest among the negotiated price, volume-weighted average price (VWAP) in the past 52 weeks, highest price at which the stock traded in in the past 26 weeks or the 60-day VWAP. Once financial bids are submitted, sources say the bids will be opened in the presence of the transaction advisers, members of the inter-ministerial group (IMG) and authorised representatives of the bidders. “The evaluation and identification of H1 is a fairly straightforward exercise and does not take much time,” the source added. “Once selected the proposal goes to the IMG for its recommendation, followed by approval from the finance minister. Depending on the strategy adopted by the government and the readiness of bidders, it is possible to move ahead with the process within the current quarter,” said the person cited above, indicating the clear winner for IDBI Bank divestment may be identified by March 2026. Edited January 30 by Hoodlum
Hoodlum Posted February 7 Posted February 7 (edited) Fairfax may have been the only company to submit a bid for IDBA Bank https://m.economictimes.com/industry/banking/finance/banking/kotak-mahindra-bank-says-it-has-not-submitted-financial-bid-for-idbi-bank/amp_articleshow/128024785.cms Kotak Mahindra Bank on Saturday said it has not submitted a financial bid as part of the ongoing disinvestment process for IDBI Bank Ltd. “We observed material price movement in the Bank’s scrip on February 6, 2026, and therefore would like to clarify that the Bank has not submitted a financial bid as part of the disinvestment process relating to IDBI Bank Limited,” the lender said in an exchange filing. According to an ET report dated February 6, Prema Watsa’s Fairfax Financial and Kotak Mahindra Bank were said to have submitted financial bids for a majority stake in IDBI Bank. ET has also learnt that Emirates NBD did not submit any bid. All three entities had earlier submitted expressions of interest (EoIs). Edited February 7 by Hoodlum
Madpawn Posted February 7 Posted February 7 Looks like we're getting IDBI Bank ! Fingers crossed the financing of it will be favourable to FIH shareholders
Hoodlum Posted February 7 Posted February 7 (edited) If Fairfax India shares jump on Monday then Fairfax may need to at least issue a press release stating if they have submitted a bid. I don’t believe we will hear anything from Emirates NBD and the India government is not saying anything. https://www.ndtvprofit.com/economy/ndtv-profit-conclave-dipam-secy-on-idbi-stake-sale-reached-final-stage-undertaking-valuation-approval-10964882/amp/1 "We are careful about the privacy of strategic investors and the integrity of the transactions, the tweet we put out is worded very carefully, we do not give either the number or identity of bidders or any information that will help you figure it out," he said. Edited February 7 by Hoodlum
Madpawn Posted February 7 Posted February 7 49 minutes ago, Hoodlum said: If Fairfax India shares jump on Monday then Fairfax may need to at least issue a press release stating if they have submitted a bid. I don’t believe we will hear anything from Emirates NBD and the India government is not saying anything. We'll see about a jump...it'd really depend on the deal structure as FIH does not have the capacity to finance it
gfp Posted February 7 Posted February 7 Yeah, I've been saying for a while that we may not be too happy initially if we "win." Long-term I get Prem's point about banks participating in GDP growth.
Xerxes Posted February 7 Posted February 7 The Competitive Landscape • Fairfax India: Widely considered the frontrunner. Reports suggest Fairfax is offering an all-cash deal, which may be viewed more favorably by the government than complex stock-swap structures. • Kotak Mahindra Bank: Although long considered a top rival, Kotak issued a clarification to stock exchanges today (February 7) stating it has not submitted a financial bid for IDBI Bank, citing material movement in its share price as the reason for the public denial. • Other Bidders: While Emirates NBD and Oaktree Capital were previously cleared by the RBI's "fit and proper" assessment, recent reports indicate they may have also stayed away from the final financial bidding round.
[email protected] Posted February 7 Posted February 7 Anyone know what kind of structure this deal is likely to take? Something like Fairfax does with Omers? Equity that works like debt?
gfp Posted February 7 Posted February 7 5 minutes ago, [email protected] said: Anyone know what kind of structure this deal is likely to take? Something like Fairfax does with Omers? Equity that works like debt? That's a good guess. Sounds like we are about to (finally) find out. Some FIH cash, CSB bank merger into IBDI, Fairfax mothership capital, outside investors like the usual suspects, GP/LP structure, preferred equity that looks a little like debt. You name it
backtothebeach Posted February 7 Posted February 7 Finally some action here, I don't even care where the stock goes in reaction to this!
Madpawn Posted February 7 Posted February 7 Anyone has thoughts on a potential BIAL IPO announcement to help fund this?
Haryana Posted February 7 Posted February 7 What about their condition that at least two resonable bidders are required for the process?
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