Fairfax India new issue

[Viking]

Well… what happens when you have heavy buying of shares at a time when volumes are usually super light? +7% move in a couple of hours ($12.74). I guess this is why we all say Happy Holidays  

[ICUMD]

Complete speculation, but could be sellers of FFH in the Dutch Auction looking to re-  enter at an attractive BV discount.  Low volumes driving sp.

[hobbit]

This will help discover true value of BIAL. First airport business to be listed in India with 64% stake in Delhi airport. I believe the demerger date is Jan 11

 

https://www.livemint.com/companies/news/gmr-group-gets-nclt-nod-for-demerger-of-non-airport-businesses-11640265265179.html

 

https://investor.gmrgroup.in/pdf/GMR Demerger_Investor Presentation.pdf

 

Could be a catalyst for FIH

Edited January 4, 2022 by hobbit

[gfp]

The CEO of Catholic Syrian Bank - CSB - has decided to retire early due to health problems.

 

https://www.business-standard.com/article/finance/csb-bank-md-ceo-takes-early-retirement-lender-to-set-up-panel-to-find-successor-122010800539_1.html

 

Bloomberg has an article on it but there is probably a paywall:

https://www.bloomberg.com/news/articles/2022-01-08/billionaire-watsa-backed-indian-lender-says-ceo-to-retire-early

[hobbit]

https://www.thehindubusinessline.com/markets/stock-markets/demerged-gmr-infra-starts-trading-in-bourses/article38241204.ece

[hobbit]

Thesis on Fairfax India at MOI

 

https://moiglobal.com/jeffrey-stacey-202201/

[Viking]

1 hour ago, hobbit said:

Thesis on Fairfax India at MOI

 

https://moiglobal.com/jeffrey-stacey-202201/

@hobbit thanks for posting. Solid overview of Fairfax India (i quickly went through the presentation). I will listen to the audio tomorrow.

 

BIAL is really positioned well when get to the other side of Omicron/pandemic in another couple of months. I think international travel could spike (massive pent up demand). Fairfax India has performed exceptionally well the past year - even with 1/3 of its BV (BIAL) in a holding pattern. Looking forward to BIAL ‘taking off’. Hopefully this is one of the catalysts that finally get Fairfax India shares airborne  

[ICUMD]

Thanks for posting. At these prices, upside is very good IMO. Share repurchases I think will remain 'safety net' to ensure mark to BV periodically.

 

Bial continues to build out its infrastructure with construction of the Metro to its doors and terminal 2.  They are also executing well on their aerocity plan.  

 

An inflationary environment should make these assets even more valuable.

 

Not the worst way to have exposure to a emerging market, especially at current prices. 

[wondering]

https://www.fairfaxindia.ca/news/press-releases/press-release-details/2022/Fairfax-India-to-Acquire-70-of-Jaynix--Engineering-Private-Limited/default.aspx

[Daphne]

Fairfax India Holdings Corporation (TSX: FIH.U) announces fiscal year 2021 net earnings of $494.5 million ($3.22 net earnings per diluted share), compared to fiscal year 2020 net loss of $41.5 million ($0.27 net loss per diluted share), reflecting increased net unrealized and realized gains on investments, partially offset by increased performance fees and provision for income taxes. The company's book value per share increased by 20.0% from $16.37 at December 31, 2020 to $19.65 at December 31, 2021, representing a compound annual growth rate of 10.3% (10.7% prior to the performance fee recorded in 2021) from the initial public offering price or $10.00 per share.

[Sullivcd]

28 minutes ago, Daphne said:

Fairfax India Holdings Corporation (TSX: FIH.U) announces fiscal year 2021 net earnings of $494.5 million ($3.22 net earnings per diluted share), compared to fiscal year 2020 net loss of $41.5 million ($0.27 net loss per diluted share), reflecting increased net unrealized and realized gains on investments, partially offset by increased performance fees and provision for income taxes. The company's book value per share increased by 20.0% from $16.37 at December 31, 2020 to $19.65 at December 31, 2021, representing a compound annual growth rate of 10.3% (10.7% prior to the performance fee recorded in 2021) from the initial public offering price or $10.00 per share.

So trading at like .6x bv, crazy.

[Viking]

2 hours ago, Daphne said:

Fairfax India Holdings Corporation (TSX: FIH.U) announces fiscal year 2021 net earnings of $494.5 million ($3.22 net earnings per diluted share), compared to fiscal year 2020 net loss of $41.5 million ($0.27 net loss per diluted share), reflecting increased net unrealized and realized gains on investments, partially offset by increased performance fees and provision for income taxes. The company's book value per share increased by 20.0% from $16.37 at December 31, 2020 to $19.65 at December 31, 2021, representing a compound annual growth rate of 10.3% (10.7% prior to the performance fee recorded in 2021) from the initial public offering price or $10.00 per share.

What makes the performance in 2021 even more impressive is their biggest asset by far - BIAL (airport) - has been suffering for 2 years. As business rebounds in 2022 BIAL will transition from a headwind to a tailwind for Fairfax India. Stock is crazy cheap, especially as the world gets to the other side of Omicron.

[Vanshon]

Any idea who would be selling this now?  It feels like the buybacks take place around $12 but once the volume gets up and the daily limit is reached somebody is happy to sell down to $11.80.  Especially after the SIB six months ago I’m surprised but happy to be able to buy it down here!

[ICUMD]

29 minutes ago, Vanshon said:

Any idea who would be selling this now?  It feels like the buybacks take place around $12 but once the volume gets up and the daily limit is reached somebody is happy to sell down to $11.80.  Especially after the SIB six months ago I’m surprised but happy to be able to buy it down here!

I wonder the same thing.  Can't help but think there is a strong level of manipulation going on to keep the price suppressed.  And it's been doing this for quite some time now.

[Crip1]

While bemusedly shaking my head, I bumped up my position by 50% just now. I simply can't believe that the market price will stay this disconnected from the BV forever. Furthermore, BIAL really has to be a tailwind here...the combination is too good to pass up such that I am considering adding more. 

 

-Crip

[Vanshon]

This  also caught my eye from the earnings release:

 

• On August 11, 2021 the company completed its substantial issuer bid, pursuant to which the company purchased for cancellation 7,046,979 subordinate voting shares for aggregate consideration of $105.0 million ($14.90 per subordinate voting share). In addition, the company continued to buy back shares under its normal course issuer bid and during 2021 purchased for cancellation 1,734,503 subordinate voting shares at a net cost of $21.9 million ($12.61 per subordinate voting share). Subsequent to December 31, 2021, the company purchased for cancellation 1,397,532 subordinate voting shares for a net cost of $18.0 million ($12.88 per subordinate voting share) under the terms of an automatic share purchase plan.

The share volume and NCIB limits wouldn’t allow for nearly this volume. They must’ve purchased a > one million share position outside of the market?  They really seem to be buying back whatever they can down here!

[ICUMD]

9 hours ago, Vanshon said:

This  also caught my eye from the earnings release:

 

• On August 11, 2021 the company completed its substantial issuer bid, pursuant to which the company purchased for cancellation 7,046,979 subordinate voting shares for aggregate consideration of $105.0 million ($14.90 per subordinate voting share). In addition, the company continued to buy back shares under its normal course issuer bid and during 2021 purchased for cancellation 1,734,503 subordinate voting shares at a net cost of $21.9 million ($12.61 per subordinate voting share). Subsequent to December 31, 2021, the company purchased for cancellation 1,397,532 subordinate voting shares for a net cost of $18.0 million ($12.88 per subordinate voting share) under the terms of an automatic share purchase plan.

The share volume and NCIB limits wouldn’t allow for nearly this volume. They must’ve purchased a > one million share position outside of the market?  They really seem to be buying back whatever they can down here!

Good catch.  The claim is mysterious.  I don't believe the share price has even traded that high  since Dec 31, 2021.  Yet they claim they bought the 1.4 million shares under an 'automatic share repurchase plan'.  Is this separate from the NCIB?  Are they selling to themselves ie. Fairfax to Fairfax India?

Edited February 12, 2022 by ICUMD

[doc75]

36 minutes ago, ICUMD said:

Good catch.  The claim is mysterious.  I don't believe the share price has even traded that high  since Dec 31, 2021.  Yet they claim they bought the 1.4 million shares under an 'automatic share repurchase plan'.  Is this separate from the NCIB?  Are they selling to themselves ie. Fairfax to Fairfax India?

 

It was trading that high at the beginning of January.  You can check the SEDI filings for details on the purchases.  On Jan 5 they bought a block of 1.2m shares @ 12.86.  There's a block trade exemption on the daily NCIB purchase limit.

[ICUMD]

10 hours ago, doc75 said:

 

It was trading that high at the beginning of January.  You can check the SEDI filings for details on the purchases.  On Jan 5 they bought a block of 1.2m shares @ 12.86.  There's a block trade exemption on the daily NCIB purchase limit.

Thank you.   You are correct.   

Very positive action for the future. 

[gfp]

Fairfax bought 5.416m additional FIH.U shares -

 

http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220216:nGNX5mHHcC&default-theme=true

[Sullivcd]

The release says they bought 5% of the shares outstanding at $12 a share from two individuals. Maybe a divorce or something? I don't get it.

[longlake95]

likely a fund that wanted to lighten up.

[Crip1]

45 minutes ago, Sullivcd said:

The release says they bought 5% of the shares outstanding at $12 a share from two individuals. Maybe a divorce or something? I don't get it.

We can only speculate and, honestly, I am not as concerned about that as I am about the fact that the investor who knows FFI inside and out, arguably better than anyone, determined that $12/share was an attractive price. It could be argued that the same investor felt that FFI was more undervalued than FFH.

 

-Crip

[Viking]

Looks like Fairfax is pulling a BAM… Fairfax has three levers it is using to significantly increase its ownership share in Fairfax India India over time:

1.) taking performance fee in Fairfax India shares

2.) Fairfax India buying back a significant amount of its own shares (with Fairfax not selling any of its shares of Fairfax India)

3.) direct purchase of Fairfax India shares - like today

 

$12/share? That is crazy cheap. A VERY GOOD investment for Fairfax shareholders with book value of Fairfax India much higher. 

Edited February 16, 2022 by Viking

[Xerxes]

Great news !

 

on a different note, Prem need to revise his shareholder letter to add in Shopify’ 18% plunge earlier today.