RE:6% means control we will now have control.Exactly!
I was reading the FFH letter to shareholders and I think this comment puts all of this in perspective:
‘When Mr. Modi got elected in 2014, we thought, based on his outstanding track record in Gujarat, that India could be transformed by ‘‘an unabashedly business friendly government’’. We are even more excited about India’s prospects today than we were in 2014. Mr. Modi’s election led us to create Fairfax India, which has just completed its third year as a public company listed on the TSX. I must say, its success, under the leadership of Chandran Ratnaswami, Harsha Raghavan and the team at Fairbridge, has far exceeded even our most optimistic expectations. I cannot fail to mention that Deepak Parekh, the Founder and Chairman of HDFC and now a director on the Board of Fairfax India, has been instrumental in Fairfax India’s success, as we have not done anything without his wise counsel.
Fairfax India’s investments are shown in the table on page 9. Chandran’s letter to shareholders in Fairfax India’s annual report and the individual company websites give you a lot more information on each of Fairfax India’s investee companies. Please read that report for more details.
Suffice it to say, we have built a huge amount of intrinsic value in Fairfax India which is much in excess of its current market value. When after-tax profits are growing at over 30%, as they have at IIFL and other companies in India, a P/E ratio of 20x drops quickly to 9x in three years. We are optimistic about all our investments in Fairfax India and expect over the years to invest much more money in that country. We think the opportunity in India is unparalleled! Our investment in Fairfax India was $469 million, and its market value today is $753 million.”