Fairfax Financial Holdings CEO Prem Watsa is bullish on his India investments. In his latest letter to investors, Watsa said, “We have a strong, successful and growing Indian operation, built on the Fairfax guiding principles, with unlimited potential in India.”
“In the last five years, we have established Fairbridge Capital, our India investment management office, and created Fairfax India which raised $1 billion in its initial public offering,” he added.
On his decision to increase stake in ICICI Lombard, Watsa said, “The bad news is that the 9 per cent cost us $234 million or five times of book value. While many of you may think I am losing it, we think, over time, ICICI Lombard will be worth every dollar we have invested in it — and more! It is an outstanding company. Our total investment in ICICI Lombard stands at $347 million.”
Fairfax had taken its ownership interest in ICICI Lombard to 35 per cent in October last year.
The company has just completed its first year in business and has made three investments, including National Collateral Management, IIFL Holdings and Adi Finechem.
“All these investments were purchased at approximately ten times normalised free cash flow. The potential for all of them is very significant, and we look forward to a long relationship with them,” Watsa said.