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thrifty

By thrifty
in Fairfax Financial

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nwoodman
nwoodman

Not too difficult at all to make the case the Kempegowda Airport is mispriced. The recent small interest stakes valued the airport at $2.5 bn (Prem uses $3bn)  Not sure about 6-7x’s in a decade ($20bn

This2ShallPass
This2ShallPass

I have owned it almost from the start, has been a terrible investment so far.   BIAL is the crown jewel and the main reason I'm still holding. As many have pointed out, the runway for BIAL i

Crip1
Crip1

I had FFHI as a moderate holding until spring of 2022 when I went overweight. Since then I’ve bought and sold a portion of holdings a few times to lower the average cost. The ping-ponging from below U

Posted Images

Xerxes Grand Master

Xerxes

Posted
Posted

Not exactly the same market, nor growth rate nor maturity. But there was a passage on The Economist few back years back about Gatwick airport as it changed hands between GIP and a French infrastructure investor. 

 

From 2018

IMG_0490.thumb.jpeg.fa13dcd1db162ae8313e4785eba63f51.jpegIMG_0491.thumb.jpeg.ea0339498c4d3388cf2d9a0da2ed0bc3.jpeg
 

2023:

 

“London Gatwick Airport has served 32.8 million passengers in the fiscal year ending 31 December 2022, achieving 70.4% of 2019 traffic. The passenger numbers increased by over 420%, from 6.3 million in 2021”

 

still at 70% of pre Covid traffic !

hardcorevalue Experienced

hardcorevalue

Posted
Posted

"Shares of Athens International Airport SA jumped 15% at the start of trading on the Athens Stock Exchange, in the country’s biggest initial public offering in more than two decades. 

 

The stock began trading at €9.40 a share, compared with the IPO price of €8.20, the high end of the initial range."

jfan Experienced

jfan

Posted
Posted

Perhaps this is already explained above in this thread. I was just trying to figure out the impact of the fees on their returns. Is my math off here?

 

image.thumb.png.36d94e78084f51b443c47cb72dd41eba.png

 

If everything was market to market instead of market to private valuation, this should normally trade at a 23% discount + hold co discount (?20%) or 57% of NAV normally given the high fees.

 

So this implies that their true NAV needs to be at a minimum > $26/share to get a 10% return at a current market price of $15/share. 

 

To get a 15% return over 10 years, the market price needs to be at 30% of true NAV, or an intrinsic value of $50/share at current market prices.

gfp Grand Master

gfp

Posted
Posted (edited)

Year end results press release:

https://www.fairfaxindia.ca/wp-content/uploads/02_February_15_2024-PRFIH-2023_Q4_Press_Release_Final.pdf

 

surprising:

"

  • During the fourth quarter of 2023 and the first quarter of 2024 the company entered into agreements to sell its equity interest in NSE for gross proceeds of approximately $189 million (15.7 billion Indian rupees). The original cost of the company's investment in NSE was $26.8 million. On January 29, 2024 the company completed one of the sales and received gross proceeds of $132.3 million (11.0 billion Indian rupees). The remaining sales are subject to customary closing conditions and are expected to be completed in the first quarter of 2024."

Edited by gfp
ICUMD Rising Star

ICUMD

Posted
Posted

Great results overall I think. 

 

They will have about 400M after the NSE sale, and about $288M after paying the performance fee in cash.  Should allow some interesting acquisitions.

 

Trading at about 0.65 BV.

 

Hopefully they do more buybacks or announce the Anchorage listing.  Bial is developing nicely, and is conservatively valued.

 

 

giulio Community Regular

giulio

Posted
Posted
3 hours ago, gfp said:

surprising

I was a bit disappointed honestly. A part of me wished that they could hold on to it for a very long time. 

Anyone here share the sentiment?

Do you think they will treat the airport differently?

longlake95 Proficient

longlake95

Posted
Posted
2 minutes ago, giulio said:

I was a bit disappointed honestly. A part of me wished that they could hold on to it for a very long time. 

Anyone here share the sentiment?

Do you think they will treat the airport differently?

I'm in the same camp. Just OWN the hard-to-come-by assets, basically forever. Munger's "sit on your ass" philosophy. But, maybe there's more to the story....

 

Maybe a worthy question for Prem & Co at the FIH AGM...

ICUMD Rising Star

ICUMD

Posted
Posted

NSE is a great asset no doubt.

 

OTOH, they need to be able to raise cash for acquisitions.  This can only happen through churning non core assets. Otherwise they have to use credit.

 

25M to 189M is a great capital gains.

 

Sell it and move on hopefully to something better!

longlake95 Proficient

longlake95

Posted
Posted
3 minutes ago, ICUMD said:

NSE is a great asset no doubt.

 

OTOH, they need to be able to raise cash for acquisitions.  This can only happen through churning non core assets. Otherwise they have to use credit.

 

25M to 189M is a great capital gains.

 

Sell it and move on hopefully to something better!

Prem has said publicly several times about deploying $5B in India in the next several years. With a notoriously bureaucratic government in India, maybe this sale is a "goodwill gesture" to show engagement. Allowing for bigger and better opportunities looking ahead. We'll see...

netcash1 Contributor

netcash1

Posted
Posted

Zurich Insurance to buy 70% stake in Kotak arm upfront in amended deal

Reuters
February 23, 20249:38 AM PSTUpdated 4 days ago
The logo of Zurich Insurance is seen in Zurich, Switzerland
 
 
[1/2]The logo of Zurich Insurance is seen at its headquarters in Zurich, Switzerland January 13, 2022. REUTERS/Arnd Wiegmann/File Photo Purchase Licensing Rights, opens new tab
BENGALURU, Feb 23 (Reuters) - Zurich Insurance Group (ZURN.S), opens new tab will buy a 70% stake in Kotak Mahindra Bank's (KTKM.NS), opens new tab general insurance arm by paying 55.60 billion rupees (nearly $671 million) upfront instead of staggering the purchase as planned last year, the Indian lender said on Friday.
Under the original deal, announced in November last year, Zurich was to buy a 51% stake in the Kotak unit for 40.51 billion rupees and an additional 19% holding within three years of the first purchase.
Advertisement · Scroll to continue
The deal will be the largest investment by a global insurer in a non-life insurer in the Indian market.
The change in the deal's terms will not affect Kotak General's valuation, which was 79.43 billion rupees according to the filing from November 2023.
Kotak Mahindra Bank said the other terms of the transaction remain unchanged.
($1 = 82.8720 Indian rupees)
gfp Grand Master

gfp

Posted
Posted

Thanks for posting @netcash1 - sounds like this deal would be more relevant to Fairfax Financial than to Fairfax India but an interesting data point nonetheless.   Seems like Fairfax should be allowed to take majority ownership of Digit.  I wonder what is holding it up behind the scenes.

valueinvesting101 Enthusiast

valueinvesting101

Posted
Posted (edited)

This one seems more serious than IIFL securities. That one was imposed by SEBI which was related to past misconduct which was overturned on an appeal. 
 

RBI action letter is flagging deficiencies about the entire gold loan business workflow. Gold loan is nearly 30% of the loan book. 

 

”Certain material supervisory concerns were observed in the gold loan portfolio of the company, including serious deviations in assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default; breaches in Loan-to-Value ratio; significant disbursal and collection of loan amount in cash far in excess of the statutory limit; non-adherence to the standard auction process; and lack of transparency in charges being levied to customer accounts, etc. These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers. Over the last few months, the RBI has been engaging with the senior management and the statutory auditors of the company on these deficiencies; however, no meaningful corrective action has been evidenced so far. This has necessitated the imposition of business restrictions with immediate effect, in the overall interest of customers.”


https://m.rbi.org.in//scripts/BS_PressReleaseDisplay.aspx?prid=57444

 

 

Edited by valueinvesting101
ICUMD Rising Star

ICUMD

Posted
Posted

Interesting that Fairfax India is potentially becoming a lender to a lender, IIFL.

 

Hopefully they manage the risk appropriately.

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