India Credit Rating Increase

[no_free_lunch]

The agency said it was lifting India’s rating to Baa2 from Baa3 and changed its rating outlook to stable from positive as risks to India’s credit profile were broadly balanced.

 

The upgrade, Moody’s first of India since January 2004, moves the rating to the second-lowest investment grade, one notch higher than Standard & Poor’s and Fitch, which have kept India just above “junk” status for a decade and more.

 

The decision by Moody’s is a plaudit for Prime Minister Narendra Modi’s government and the reforms it has pushed through, and comes just weeks after the World Bank moved India up 30 places in its annual ease of doing business rankings.

 

Indian stocks, bonds and the rupee rallied.

 

https://www.reuters.com/article/us-india-ratings-moody-s/moodys-gives-modi-a-boost-by-raising-indias-sovereign-rating-idUSKBN1DH0O8

 

India seems to me to be the best of the BRICs from an investment POV.  Just not sure the best way to buy into it. There is an ETF but it is .. well you don't really know what you are buying without putting in some serious work and frankly it doesn't seem that cheap.  I am thinking FFH might be a good approach.  Any other suggestions?

[ICUMD]

I am quite excited about the prospects of Fairfax India.  I think India is risky as an aggregate due to high debt levels and corruption remains problematic.  However, with the right management - in this case Watsa's, a proven track record and with the right connections, it is possible to find undervalued high growth companies that will do well in the long run.

 

Fairfax India, essentially a private equity company, is investing in businesses with greater than 20% yr over yr growth.  I believe that its investments in the Bangalore airport and in IIFL are powerhouses that will lever the rapidly growing Indian middle class.  I also think it remains an attractive investment in the $15.50 /share range.

[alpha]

I am quite excited about the prospects of Fairfax India.  I think India is risky as an aggregate due to high debt levels and corruption remains problematic.  However, with the right management - in this case Watsa's, a proven track record and with the right connections, it is possible to find undervalued high growth companies that will do well in the long run.

 

Fairfax India, essentially a private equity company, is investing in businesses with greater than 20% yr over yr growth.  I believe that its investments in the Bangalore airport and in IIFL are powerhouses that will lever the rapidly growing Indian middle class.  I also think it remains an attractive investment in the $15.50 /share range.

 

Have you read about the management and "performance" fees being paid out in their latest quarterly filings?

[Jurgis]

Have you read about the management and "performance" fees being paid out in their latest quarterly filings?

 

Can you elaborate on what you think the issues are?

 

Thanks

[ICUMD]

I think the performance fees are reasonable considering the expertise Watsa and the Fairfax parent are offering.  This business would not exist if it weren't for the quality of management and access to capital that the parent Fairfax, has access to.  They are able to lever large funds such as OMERS and and proven that they can make solid investments that would otherwise be unaccessable to the small investor.  I guess you have to decide if the 'fees' are worth it for yourself.