Jeffrey Stacey of Stacey Muirhead Capital Management updated his investment thesis on Fairfax India Holdings (Canada: FIH.U) at Best Ideas 2025, held from January 9-24.
Thesis Summary
Fairfax India (FIH) is an investment holding company whose objective is to achieve long-term capital appreciation by investing in public and private equity securities and debt instruments in India and Indian businesses.
Fairfax India sponsor Fairfax Financial Holdings has an excellent long-term record in India. The Fairfax India IPO was completed in January 2015. Fairfax Financial owns 43.4% and OMERS owns 15.1% of Fairfax India. The latter receives investment support from Fairbridge Capital in Mumbai. FIH reports financial results using IFRS investment entity accounting. As a result, book value per share is a “rough” proxy for intrinsic value.
FIH’s largest holding by far is the privately held Bangalore International Airport. It is India’s third-largest airport and one of the world’s fastest-growing airports, with a strategic position in southern India. The airport reported a record 37.5 million passengers and 439,524 MT of cargo in FY2024. Jeff views the recent published valuation of $2.5 Billion (on a 100% ownership basis) as extremely conservative.
FIH had book value per share of nearly $22 as of Q3 2024. Due to the conservative nature of management’s value estimates, Jeff believes fair value may be ~$10 per share higher, resulting in an adjusted fair value of roughly $32 per share. FIH recently traded at roughly one-half of this adjusted fair value estimate.
Since inception, FIH has repurchased 22 million shares, or 14% of total shares outstanding for $289 million or $13 per share.
View Jeff’s FIH presentations at Best Ideas 2022 and Best Ideas 2023.
Slides
Let’s listen to the full session and look over the transcript.
