Fairfax India plans to list infrastructure investment subsidiary

The plan is to eventually transfer all of Fairfax's shares in Bangalore International Airport to AIIHL

Fairfax India is planning to list its subsidiary Anchorage Infrastructure Investments Holdings (AIIHL), the group's flagship investment vehicle for airports and other infrastructure investments in the country. The plan is to eventually transfer all of Fairfax’s shares in Bangalore International Airport (BIAL) to AIIHL.

In December 2019, Fairfax India signed definitive agreements with an investor, whereby it would transfer 43.6 per cent of BIAL out of the 54 per cent that it owns to AIIHL. The investor will pay about $135 million to acquire from Fairfax India 11.5 per cent stake on a fully diluted basis in AIIHL. This will result in the investor indirectly owning approximately 5 per cent in BIAL. The transaction values BIAL at $2.7 billion.

‘Worst may be over’

Canadian billionaire and chairman of FairFax India Holdings Prem Watsa has observed that though 2019 was a tough year for the Indian economy, there are indications that the downward trend in some key economic indicators has bottomed out. Owing to this, he expects a gradual consumption-driven recovery.

High reservoir levels and soil moisture levels point to a good rabi harvest that could cool inflation and revive consumer demand. 

A fall in the consumer price index-based inflation could enable and encourage the Monetary Policy Committee (MPC) to initiate one more policy rate cut, he said in his 19-page letter to shareholders.

“The worst may be behind us, and we may see a gradual consumption-driven recovery,” he said.

From the end of 2016, India has moved up 67 places to number 63 in the World Bank Business Report’s ‘ease of doing business’ measure. 

His letter also said that according to a World Bank director, this is the third year in a row that India has made it to the top 10 ‘improvers’ in doing business. This is a success that very few countries have achieved over the last 20 years since the project was started. At this rate, India could soon be among the top 50 countries in which to do business. This is a testament to the economic reforms that Prime Minister Narendra Modi has been undertaking. However, 2019 has been a year of opposites for India, it added.