Investments in Digit, IIFL Finance, CSB Bank, NSE, Fairchem Organics and 5paisa have fetched handsome returns for Canada-based Fairfax Financial Holdings (FFH), generating a compounded annualised return of over 20 per cent.

Digit gave a whopping (compounded annualised) return of 61.9 per cent (as at December-end 2023) on the investment of $154 million made in February 2017. Fairfax owns 49 per cent stake in the general insurer. The fair value of its investment in the company was $2.265 billion as at December-end 2023, per FFHL’s annual report.

Fairfax India’s investment in the National Stock Exchange got it a return of 33.4 per cent. It had picked up 1 per cent stake in NSE for $27 million in July 2016. The fair value of this investment was $189 million as at December-end 2023.

All the investments of Fairfax India (FI) are centrally managed by Hamblin Watsa Investment Counsel Ltd., a wholly owned subsidiary of FFH.

IIFL Finance gave a return of 25.8 per cent to FI on its investment of $76 million made in December 2015. The fair value of this investment was $412 million as at December-end 2023. It has 15.1 per cent stake in the non-banking financial company.

Fairchem Organics fetched FI a return of 23.3 per cent on the $30 million investment it made in February 2016. The fair value of this investment was $103 million. FI has 52.8 per cent stake in the company.

5paise gave a return of 22.5 per cent to FI on the $17 million investment it made in December 2015. The fair value of this investment was $52 million. FI has 24.6 per cent stake in the company.

The $170 million investment made in CSB Bank in October 2018 has earned FI a return of 20 per cent. The fair value of this investment was $409 million as on December-end 2023. FI has 49.7 per cent stake in the private sector bank.

V Prem Watsa, Chairman and Chief Executive Officer, Founder of FFH, in his letter to shareholders, observed that the Indian economy is expected to grow at 7 per cent for the foreseeable future, the highest growth rate for a major economy. “In the next four years, India is expected to be the third largest economy behind the US and China and ahead of Japan and Germany.

“Modi is expected to easily win re-election in May of this year – perhaps even getting a larger majority than in his second term. This will establish India clearly as a business-friendly nation, with great prospects for the future. It is very unlikely that India will go back to its socialist ways that were in place when I left India 51 years ago!” Watsa said.

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