Fairfax India Holdings Corporation (FIHU) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Very nice to see all of you again. I had mentioned at the Fairfax meeting in the morning that we are back, and it looks like we're back here, too. So warm, warm welcome here. This is Fairfax India meeting, and a warm welcome to all of you on the Internet. Makes it more convenient for you all to watch it. We've got our directors, presidents, all of us here. And so it's the seventh annual meeting for Fairfax India, 7 years ago is when we began it. And it's a pleasure to welcome all of you. We have, of course, many shareholders here, presidents of our investee companies, employees in India, Mauritius, Toronto. And it's a pleasure to see those who are here in attendance today. And as I mentioned, we are live streaming it. So again, a warm welcome to all of you. We are hoping, with a little bit of luck, to put COVID behind us and then we go forward. So as before, we'll go through the formal meeting quickly. Short presentation between me and Chandran, and then we'll open it up for Q&A. We've set the microphones here, so you can ask any questions that you like. And the questions that come from the Internet go right into Jeff Stacey. And if we have our presidents come and speak, they'll come from here so that we can hear them. So with that, let me go into the formal meeting, very quickly finish that. So I have to say, ladies and gentlemen, welcome to this meeting. Prem Watsa, Chairman of Fairfax India, I will act as Chairman of the meeting. I will ask Jennifer Pankratz, the Corporate Secretary of Fairfax India, to act as Secretary of the meeting. I shall appoint [ Shirley Tom ] and [ Louise Walton Berry ] of Computershare Trust Company to act as scrutineers and to compute the votes of any polls taken at the meeting and to report them directly to the Chairman. Constitution of the meeting. I can report that as a result of reviewing an affidavit of mailing and a preliminary report of the scrutineers satisfy that notice of the meeting has been duly given, that a quorum is present, and that this meeting is properly constituted and properly called. I propose to move quickly, as I've said, and the shareholders' meeting held on April 15, '21, the minutes are available for inspection upon request to Fairfax's -- Fairfax India's Corporate Secretary. As well, I now formally placed before the meeting the annual report of the company for December 31, 2021, which includes the company's financial statements for the fiscal years '21 and '20 and the report of the auditors, PricewaterhouseCoopers. In addition, I declare that the total number of votes attached to shares represented at the meeting by proxy, which have been directed to be voted in favor of each matter to be considered at the meeting, is in each case, not less than 95% of the votes that may be cast in such matters. Voting today will also be conducted by electronic ballot for those attending virtually and by a show of hands for those attending in person. I will ask that the balloting be open to registered holders and appointed policyholders -- proxyholders. The polls are now open on the platform. And at this time, all registered holders and proxyholders attending virtually, who have properly logged in, will be able to see on the screen all motions to be brought forth at this meeting. Following the meeting, Jennifer Pankratz will confirm for us when the polls have closed. Once the electronic ballot -- balloting closes, your votes will be submitted. With your permission now, I will now move directly to the election of directors. And I will ask for a nomination of directors.

I am Amy Sherk, and I nominate as directors of the corporation for the ensuing year Anthony Griffiths, Christopher Hodgson, Alan Horn, Sumit Maheshwari, Deepak Parekh, Satish Rai, Chandran Ratnaswami, Gopalakrishnan Soundarajan, Lauren Templeton, Ben Watsa and Prem Watsa.

Thank you very much, Amy. Fairfax's India's bylaws require that nomination of directors by shareholders be received by the company at least 30 days in advance of the meeting in order to be valid. And no nomination for directors other than those set forth in the Management Information Circular were received prior to the deadline. The nominations are now closed. As the number of directors nominated is exactly the number to be elected, I confirm that those 11 nominees are proposed for election as directors of the company. Given the hybrid meeting and the fact that we will also conduct a virtual vote, we will have a vote on this together with the next resolution. I now invite a resolution regarding the appointment of an auditor.

I move that PricewaterhouseCoopers LLP be appointed as auditor of the corporation to hold office until the next annual meeting.

I second the motion.

Thank you, Jen and Amy. For those attending in person, I would ask that you please show -- please vote by a show of hands. All in favor? Any against? The motions passed. We'll take a brief pause to allow registered holders and proxyholders to complete their electronic voting on the motions brought forth at this meeting. And Jennifer is going to time it so that we give enough time for them to vote. [Voting]

Mr. Chairman, the voting is now complete, and the polls are closed.

Thank you very much, Jennifer. I now have been advised by the scrutineers that the proxies deposited for the meeting have now been voted. I can confirm that the nominated directors have been appointed as directors of the company to hold office until the next annual meeting. In addition, I confirm that the PricewaterhouseCoopers had been appointed as auditor of the company to hold office until the next annual meeting. We will file a report on SEDAR setting out the voting results following the meeting. So the directors have been elected and Pricewaterhouse has been confirmed. Can I now request you to join me in a round of applause for our directors? I propose now to terminate this meeting. After that, Chandran and I will give you a little sense for the management team. And then Chandran and I would like to talk to you about our operations. And then a Q&A, this shareholder meeting is for you, for shareholders. Ask any question that's on your mind, and we'd like to be able to answer it. Not only will Chandran answer it and me, but also our presidents who've traveled all the way from India. So they're all available here to answer it. So with that, can I have a motion for termination?

I move that this meeting be terminated.

I second the motion.

Thank you, Amy, and Jennifer. I declare the meeting terminated. So with that, we will terminate the formal meeting and go into the management team. Yes, this is the management team that we have. You can see, I'm just going to go around. Gopal has been with the company for 20 years, and Chandran has been instrumental in bringing him in. He was with ICICI Lombard as the investment guy for them, and we're very happy he's moved to Toronto now. And he's very happy that he's joined us for some years now. And he has also Vice Chairman, right, Chandran, of Gopal's position?

Chief Operating Officer.

Chief Operating Officer, COO. Not yet promoted, Gopal. So Nadir Patel, MD Fairfax Consulting Services. I introduced him at our Fairfax meeting. He is the Canadian ambassador to India and been in government service for 30 years and knows everything about the Canadian government, and we're so happy that he's joined us, Nadir Patel. Sheetal is the Vice President that Fairbridge, 3 years with Fairfax, and she's here with us. I'm coming back to Chandran. Jennifer, General Counsel and Corporate Secretary, 4 years with Fairfax. Sumit has been with us 11 years now, and he runs the Managing Director at Fairbridge. He runs Fairbridge. All the ideas come to Sumit. And then he brings it to Chandran and they talk all the time. And then it comes to myself and the investment committee. By the time it comes to me, it's done. It's highly unlikely we won't do the deal. And after that, there's -- in terms of our corporate structure, we've got Mauritius. We've got Amy Tan, who's our CEO at Fairfax India, Mauritius. 9 years with Fairfax, Chandran goes and visits all the time, and she's in Mauritius. Then you've got Amy Sherk, who is our Chief Financial Officer. Amy has been with Fairfax for 17 years, and we're really, really happy with the fact that she's joined us now a few years as CFO of Fairfax India. Kasi Rao has joined us 3 years ago. He's a Managing Director of Fairfax Consulting India. And he and Nadir are -- we're taking good companies here from Canada, United States want to go to India. We'll give you a consulting relationship as well as maybe invest in the company if you like it. But that's the whole idea that Nadir and Kasi are doing. We've got a few clients already. And Anish Thurthi is Director of Fairbridge, 3 years with Fairfax, works very close with Sumit. That's the whole list with one exception, Chandran. Chandran, for 7 years is the CEO of the company. I've known this guy for 60 years. I was thinking to myself, how many people that have you known in your life for 60 years. I've known him for about 60 years, and he's been with the company at Fairfax 28 years. But all of these people that I just introduced to you, he's the guy who selected them. As I'm looking at them, he's the guy who meets them, and he's the guy who is responsible for this development of Fairfax India. So I want to take a minute to give Chandran a good round of applause. Now what I want to do is very quickly go through a quick presentation on Fairfax India and then pass it on to Chandran. So very quickly, here, the 7 years, the book value for Fairfax India has gone up compounded 10.3% in U.S. dollars, because the rupee has, of course, been weak. The Sensex has compounded at 7.6%. So we've done better than that. But as you can see, it's compounded at 10.3% since the IPO. 10.3% for India is not that good. But our book value is understated. We've gone through a pandemic and a lot of the investments when Chandran talks to you are worth a lot more. Growth in book value, 1 year, 20%; 7 years, 10.3%. The same type of thing. You can see U.S., the index 7.6% for 7 years. But the Indian rupee, you can see has been devalued, cumulative about 17%, 16.7%. So it's gone down over that time period. So whatever your return, your return in Indian rupees is higher, but by the time you translate it into dollars, it's less. Just giving you a sense for where India stacks against all the Asian equity markets, 19.6%. This is for the year 2021 in U.S. dollar terms. Here's how we look at performance for the shareholder. Book value, we started $10 a share. But by the time you pay the commission and expenses, we had $9.50 to work with. But as shareholder, put $10 and we look at $10, but that's what we had to work with. And now it's pretty well doubled at $19.65. Investments per share have gone from $9.34 to $25. It's done even better. Common shareholders' equity, dollar terms come from $1 billion to $2.8 billion, all going into India. Total cash and investments you can see there and shares outstanding, you can see. So the shares outstanding peaked out at about 153 million, and our shares have been down. So what do you do when your shares are down, you buy it back. We have the ability to buy it back. So as you'll see here, we bought quite a bit back. Yes. So we bought 7 million shares in 2021 through a substantial issuer bid. We paid $14.90. Over the last 4 years, we bought 14.4 million shares, 9% of the total, I would say almost 10% for $191 million. And so unlike people who want to become big, we're looking at rate of return. And so when we can buy our shares much below book value, we've done it. In the first quarter, we continued to have almost 1.92 million shares for $24 million, $12.65. And Fairfax India had bought all the shares that they could, and there were still some shares available. And so Fairfax Financial looked at it, and we decided to buy 5.4 million that was available that Fairfax India couldn't buy it because they were restricted, and so we bought the remaining 5.5 at $12. So we think the best thing we can do, what we're saying to you is invest in Fairfax India shares. And instead of talking about it, we went and actually did it. Some sales that Chandran and team have done last year, Privi Speciality, you can see it's all in the annual report. I'm not going to highlight it so much. It's a terrific rate of return, 27%. The founder has done a tremendous job, and we sold it to him, and he's going to build the company in the future. Anchorage, took a long time to get it approved. But it's been approved now. $129 million of sales, 11.5% to OMERS. Satish Rai is on the Board from OMERS. We got a very good relationship with them. And we transferred 43.6% of our equity interest. And the transaction is valued at $2.6 billion for the third largest airport in India, magnificent airport. And you might have seen it, there was a little -- Bangalore International Airport had a display. It's going to be a fabulous airport when it's all completed. The second terminal has been -- second runway has been completed. The second terminal will be completed soon. And you can see where we acquired it. Fairfax organic has been a tremendous run. We sold about 13.9% for $46 million, and we still have 52% of the company. IIFL Wealth. You can see IIFL Wealth has done very well. Nirmal Jain is here and done extremely well. And the only reason we reduced it was there was a new -- Bain Consulting had come in and General Atlantic wanted to sell. And so we thought, Chandran thought that it was the right thing to do. And -- but we continue to think that it's a terrific investment led by Nirmal Jain. So if you then -- the financial strength is very important for our company, all our companies that we're associated with. So you see cash in public securities is $1.4 billion, you can see that. You can see our borrowings, and you can see our common shareholders' equity. Now until about last year, we were able to do a $500 million bond issue, investment grade, payer interest, payer principal, no covenants. Before that, we were borrowing from a bank and you had all these covenants. Not bad, but nothing like payer interest, payer principal. It's a 7-year deal, $500 million, 5% unsecured senior notes. And then we also got $175 million, which we don't want to use for 3-year unsecured. You have a sudden problem come in. We don't have to go looking for it. We can get it from drawing down on the $3-year unsecured. But cash and public securities, as you can see, is $1.4 billion. Borrowings to common shareholders' equity is about 20%. So it's not huge. And cash and public securities to borrowings -- our cash and public security is at 2.4x. So it's very well covered. And 2.8 at the end of 2021. Financially, we're very sound. This is a summary of investments that we've made. The date of the initial investment the ownership, Bangalore International Airport, 54%. Amount investment -- amount invested, $653 million. What the fair value was at the end of December, $1.37 billion, compounded at 17.7%. That's about half. So twice that is what the whole airport is worth. And it's an airport that Chandran is going to show you it will grow significantly. And in our minds, it's selling at a very, very reasonable price. And the other companies I just shown there, the one that hasn't performed yet is NCML, 13.2% down from our cost from the amount invested. And Chandran, Sumit, Gopal, we're all looking at how we can improve it further with Siraj, who runs it. And the others, you can just see, I didn't have anything to add. Chandran will talk about some of them in his portfolio review. But you can see cash and government bonds is about $230 million. We've got about $230 million in cash and government bonds. So again, very, very sound. And Jaynix Engineering and Maxop, the 2 engineering companies, one in November '21, and the other one was in February. Very excited about it. Make in India is what Mr. Modi was talking about. And these 2 companies make in India, and they make for some of the top-tier automotive companies and electrical companies in Europe and the United States. And we -- and they are both -- they both begun by first-generation entrepreneurs in India. And these type of things are taking place in India, and we were very happy to be able to do this. India remains the fastest-growing major economy, you can see that. See the GDP forecast right there, 6.6%. This is for 2023, and that 6.6% might be light. India is coming back from that Delta variant and might be 8% plus growth. This is what is estimated. China is 5.3%. On the other hand, China might go down as opposed to go up. And you can see Russia and South Africa and Brazil. So India is very fast-growing. And the oil consumption, which was significant in the past is much, much less significant as that chart shows you. For the longest time, India was a socialist economy. For the longest time, it didn't attract foreign investment. It didn't -- it wanted to discover everything itself, not use foreign talent. And now you can see when Chandran and I left India almost 50 years ago, if you had said Samsung, Facebook, Amazon, all of these companies would be in India and have dominant market share, you wouldn't believe it. But that's what makes India attractive, that a democracy can attract business like this, and ultimately, the consumer benefits. The share of state enterprises, China is about 45%, India is only 10%. And perhaps over time, getting to be less. This is in the top 50 companies market cap. So India is more and more business-friendly, free enterprise and allowing companies to -- allowing businessmen, entrepreneurs and companies to flourish. This is a -- I talked about this at Fairfax in Fairfax Financial. There's a huge privatization going. So Mr. Modi, it's a democracy, there's 1.3 billion people. You have to make sure that you get elected. So the first thing he does is -- one of the first things he takes 400 million bank accounts, I think I told you, 400 million bank accounts for the poor. So that when money goes from the government to the poor people, there is no loss in terms of frictional cost. All sorts of things. So $100, the poor guy would only get $10 because there's a lot of people feeding on that trough. Now it gets directly in, $100 goes right to $100. They did that. Then he did the medical system for the 500 million poorest people, he looked after them. And then -- and he did things like this, electricity for everybody, gas cooking for women and men who cook and he did all of that over the years. And then finished his first term, got reelected with a bigger majority. And this term, second term, he says, I'm going to be a business-friendly, privatized. And just recently, we were in a call where he said, why are we owning all these companies? The government can't run this. Let's sell it. All the banks and insurance companies and railway stations and on and on and on. And he wants to privatize it. And he's talking about $80 billion worth of companies privatized in the next 3 or 4 years. And that's a significant achievement. That's a significant thing. In India, you've never heard of people doing that because they said these are our assets. Why should we -- airports, we can't sell our airports, we can't sell ports. And he's doing that. And that's -- I thought that was a big plus. And the funds that are raised, this $80 billion, he's in his second term, he says, this is in '19, 2.5 years ago. He says we're going to get tap water, which all of us take for granted here. Tap water, clean tap water for every single man, woman and child in India. At the time when he said that there was 17% who had clean tap water. Many rural India didn't have it. Today, 2.5 years later, 50%. And the guy who runs that program is a guy I know, many of you do, Bharat Lal, and he developed that in Gujarat and took it from 0 to close to 100% in Gujarat. In doing that for India, another 2.5 years, the whole -- likely 100% of Indians will have tap water, something as basic as tap water. And so you can see, and it's called Jal Jeevan Mission. And so you can see that he's going to get elected. Highly unlikely won't get elected for his third term. And that's what India needs, it'll change from being a very socialistic economy to a more private enterprise-free business, business-friendly economy. And the potential for that is huge and it's long lasting as opposed to perhaps a more top-down government-controlled economy. This is a start-up economy. I mean there's 44 start-ups in India, the first one was our own Kamesh Goyal with Digit, but a whole ton of start-ups. So when you're doing a start-up, it doesn't make a difference what your background is, what your religion is, what your caste is, you come up with a good idea, bang, you can raise money, which is now -- which has always been here in North America. Now it's in India. And that's so nice to see. That means whatever your background, you've got an opportunity to do well. It shows you the amounts raised. Foreign exchange reserves are very solid. $630 billion now and 18x the buffer it had during the financial crisis. Foreign investment coming to India, service exports remain strong. And we just see, Chandran and I and all our management teams see this continuing in the years to come. Only economic size with no ballooning of credit. India is very careful about taking money from outside in terms of Indian government bonds. So they got all sorts of limits. And you can see that here, that they're very careful about borrowing from outside. So they don't have any foreign exchange problems. A very solid balance sheet. Public debt is very manageable. You can see net tax revenue of the GDP pretty flat for a lot of years. And you could see that in central government debt is also very, very flat. So you put it all together, India, we think, is the #1 spot only because it's got 1.3 billion, 1.4 billion people. That's a ton of people that are going into the middle class as development takes place. And so everything grows huge, 20%, 30%, 40% is not abnormal. And so we've got -- these are the companies we have. We put them down, IIFL, we've got Bangalore International Airport. We got Sanmar, NCML, CSB Bank. You can see all that. And then at the bottom, right at the bottom, USD 450 million. We've got $220 million, $229 million, $230 million cash in government bonds. We got $70 million in liquid public equities, and we got $142 million in private equity, which is basically the National Stock Exchange. We have shares in that and a small amount of money in the India Housing Fund. So financially, $440 million, very liquid. We can cash off any time. We've got Maxop, $30 million, which we hope to build significantly. And Jaynix, $33 million, very significant. So we're really excited about India, all sorts of possibilities. We know the people. Deepak Parekh is on our Board. We don't do a lot without Deepak Parekh. He knows everybody. If you ask him any -- Deepak runs the -- he's founder of HDFC Bank, the best bank -- certainly the best bank in India, perhaps the best bank. One of the best banks in the world, got a terrific track record, knows everybody. Highest of high integrity. And we don't do a lot without checking with him. Sumit talks to him. Chandran talks to him. I talk to him. And so we've got very good resources, and we think Fairfax India over the next 5 years, 10 years is going to do extremely well. And with that, I'm going to pass it on to my friend, Chandran here, and let him continue. Chandran?

Thank you, Prem, and good afternoon to all of you. At the outset, I'm pleased to report that all the Fairfax India companies are fully operational and managing their businesses well. In the next few minutes, I'll give you a brief summary of the 2021 performance of Fairfax India's sixth largest companies. Bangalore International Airport. Our largest investment is the Bangalore International Airport, or BIAL for short. We own 54% of BIAL, acquired for $653 million, implying a value of $1.2 billion for 100% of the airport. BIAL is India's third largest airport and the largest in South India. And Bangalore is the fastest-growing and third largest city in India. After a very successful year in 2019, during which passenger traffic reached its highest ever of 34 million, in 2020, it fell to about 14 million and only recovered to 16 million in 2021. The traffic patterns were volatile. And as normalcy appeared to be returning, it was severely cut back by the Delta and Omicron variants. Despite these extraordinary circumstances, under the exceptional leadership of Managing Director, Hari Marar and his the executive team, BIAL has had a commendable year. Fortunately, passenger traffic for domestic passengers is now back to pre-pandemic levels and international routes are now fully open with very few restrictions. And we are very closely watching the pace at which traffic comes back. Cargo operation has been a beacon of strength as it was not affected by the pandemic, setting new all-time highs in cargo volume. And BIAL at 31%, now has the largest share in India for the shipment of perishable goods. Financially, 2021 was still a difficult year for BIAL. And though revenue increased 26% from the previous year to $106 million. It is still only at about 50% of prepandemic levels. EBITDA increased 72% to $41 million, but was only at 35% of prepandemic levels. Despite the difficult years in 2020 and 2021, BIAL has generated an ROE of 16.3% over the last 10 years. BIAL has 3 sources of revenue: Aeronautical revenue, non-aeronautical revenue and monetization of 460 acres of real estate. Aero revenue is determined by regulated aero tariffs that BIAL can charge and are set by the regulator for 5-year periods, called control periods, and are computed to provide BIAL around a 16% return on equity on the regulated asset base. Any under or overrecovery of tariffs in any control period is adjusted to the subsequent control period. Because of the significant underachievement of passenger traffic projections in the last year of the second control period and major investments, user development fees were expected to increase very significantly in the third control period. However, the regulator to assist the troubled airline industry cut back BIAL's reasonable revenue request of $1.2 billion for the control period by moving $125 million to the next control period. While this has no long-term impact on BIAL, because the revenue with interest will be made good in the fourth control period. Short-term cash flows will be constrained because BIAL is in the middle of a major expansion and spending. BIAL is addressing this by restructuring its debt and moving some essential construction projects to the next control period. I was at the airport a few weeks ago, and I'm pleased to report that excellent progress is being made on all the construction projects. We expect the spectacular second terminal to be open in 2022. The valuation of Fairfax India's interest in BIAL remains at $1.4 billion in 2021, the same as in 2019 and 2020, implying an equity value of approximately $2.6 billion for the whole company. There are 2 reasons for this. First, BIAL has added to its growth plans from a planned capacity of 70 million by 2029 to over 90 million passengers by 2034 by adding a Phase 2 expansion to the second terminal and building a new third terminal. Second, significant progress has been made in the plans to monetize BIAL's 460 acres of land that can be developed. And the plans covering the first phase of developing about 176 acres is now being implemented. In 2020, we transferred [indiscernible] 43.6% of BIAL out of the 54% that we own to Anchorage. Fairfax India's flagship Indian investment vehicle for airports and other infrastructure investments. And OMERS, the pension fund, paid $129 million to acquire from Fairfax India 11.5% of Anchorage. This transaction also values 100% of BIAL at $2.6 billion. Fairfax India intends to complete an IPO of Anchorage targeted to value 100% of BIAL at a value in excess of $2.6 billion, which implies a targeted valuation in excess of $1.2 billion for Anchorage. Moving on to Sanmar Chemicals led by Vijay Sankar, it is a private company and one of the largest manufacturers of PVC and caustic soda in India and Egypt. We are saddened to inform you that Vijay's father, N. Sankar, the founder and visionary leader of Sanmar, passed away last week. We extend our deepest condolences to the family and employees of Sanmar. 2021 was an outstanding year for Sanmar. It turned around from making losses over the last several years to a net pretax profit of $92 million. Revenues grew 88% to $1.3 billion, and EBITDA grew 123% to $276 million, just tremendous performance. All the 3 divisions, the specialty and commodity PVC businesses in India and the Egyptian business were all profitable for the first time in the same year. This impressive performance was the result of strong demand for PVC and record prices and margins as a result of the global tightness in the supply of this product. This is particularly pronounced in India because of the even stronger growth in the use of PVC. In 2021, Sanmar consolidated all its Indian chemical businesses under one company called Chemplast Sanmar, and listed it on the Indian Stock Exchanges through an IPO, raising $519 million, implying a valuation of $1.2 billion for 100% of Chemplast. The net proceeds of the issue were used to repay all the long-term debt at Chemplast and the holding company. CRISIL Ratings, an S&P Global company, recently upgraded Sanmar India company's credit rating to AA minus from A plus. The Egyptian business, TCI Sanmar, in addition to having its best year ever, operational and financially made good progress in restructuring its balance sheet. It converted $118 million out of its $785 million term debt to 13.9% of their equity. This transaction implies a post-money valuation of $848 million for 100% of TCI. Please note that in our valuation, as Prem mentioned, were very conservative, we carry TCI equity valuation of only $216 million, whereas they raised money at over $800 million. They also restructured $118 million of debt as nonconvertible debentures with an interest rate of 0.01% per annum, with no principal payments until 2036. They extended the maturity of the remaining $550 million of debt. TCI continues to look for further improvements to its balance sheet through an external capital raise. Altogether, the future looks very promising for Sanmar. CSB Bank. In 2019, we completed our acquisition of 51% of CSB bank for $170 million. And this investment was valued at $228 million at the end of 2021. At its recent high price in June 2021, CSB was valued at $339 million. Under the exceptional leadership of Mr. CVR Rajendran, who has been the CEO for the last 5 years, CSB had its best ever year in 2021. Revenue increased 22% to $195 million, and net profit increased 63% to $66 million. CSB made excellent progress in its key performance measures in 2021 with loan advances growth of 11% and deposits growth of 7%. Net interest income grew by 37%, and credit-to-deposit ratio improved from 74% to 77%. In addition, net interest margin improved to an industry-leading 5.3%, and cost of deposits reduced to 4.4% from 5.4%. Asset quality is excellent, with net NPAs of 1.4% and a provision coverage ratio of 83%. Capital adequacy ratio is stable at 21%. Due to health reasons, Mr. Rajendran retired in March 2022, and we owe him a huge debt of gratitude and wish him and his family the very best in his retirement. Pralay Mondal, who is the Deputy Managing Director of CSB, will take over as the interim CEO. We are very excited about the long-term prospects of CSB. IIFL Finance. IIFL Finance, which is non-deposit taking, is one of the largest non-bank finance companies or NBFCs in India. Under the able leadership of its CEO, Nirmal Jain, who's also the founder and significant shareholder of all the IIFL companies, IIFL Finance had an excellent year in 2021. Revenues increased 22% to $519 million and net profit grew 95% to $151 million, generating an ROE of 18%. Going forward, we expect ROEs to be even higher. The funding environment for NBFCs has improved considerably in India. IIFL took advantage of the changing sentiment and built up all-time high cash and undrawn bank lines totaling $1.2 billion, sufficient to meet short-term liabilities and to fund the growth momentum expected in India following the pandemic. Assets under management grew 11% to $6.3 billion. It added over 650 new branches to its existing 2,400 and over 7,800 new employees to its existing 18,000 and is moving forward aggressively to consolidate its position as one of the major NBFCs in India, serving about 7 million customers. IIFL Finance is also investing heavily in brand building and in technology. It has implemented industry-leading fintech innovations like WhatsApp loans. Loan to value is very conservative at 72% for home loans, 73% for gold loans, 47% for business loans, and 42% for construction and real estate loans. With a well-diversified asset portfolio, of which 92% is retail in nature, a total cap adequacy ratio of 25.4%. Net interest margin is at an all-time high of 7% and cost-to-income ratio of 39%. IIFL Finance is well-positioned to take advantage of the post-pandemic economic recovery expected in India in 2022. Fairchem Organics. In August 2020, Privi, the aroma chemicals company, as Prem mentioned, was separated from Fairchem Speciality Limited and the former combined oleochemicals and aroma chemicals listed entity. In December 2020, Fairchem, which was renamed Fairchem Organics, started trading on the Indian Stock Exchanges as an independent oleochemicals company. Fairchem is led by its founder, Nahoosh Jariwala. Oleochemicals are broadly chemicals that are derived from plant or animal fat, which can be used to make both edible and nonedible products. In recent years, the production of oleochemicals has been moving from the U.S. and Europe to Asia -- to Asian countries because of the local availability of key raw materials. This is becoming like a cliche. I keep saying this, in 2021, Fairchem had its best year ever. So far, most of our companies have been doing that. This is possible because it increased its raw material throughput capacity from 72,000 to 90,000 metric tons and expects to take it up to 120,000 later this year. Revenue grew 92% in 2021 to $85 million, and net earnings grew 108% to $10 million, generating an ROE of 33%. In 2021, we sold 14% of the 67% we own in Fairchem for $46 million, recouping more than our entire investment and still own 53% valued at $155 million at year-end. We believe that Fairchem is poised to have another record-breaking year in 2022. IIFL Securities. IIFL Securities is one of the major capital markets players in India, in Indian financial services. It operates in 3 broad areas: retail broking and financial products distribution, which is 68% of revenue; institutional broking, which is 13% of revenue; and investment banking, which is about 10%. It had an outstanding year in 2021. Its revenue increased by 47% to $164 million. And net profit before tax increased by 59% to $53 million, generating an ROE of 25%. These results were driven by the strong performance of the retail broking and investment divisions that benefited from the bouyant equity and IPO markets in India in 2021. IIFL Securities at a valuation of only 9x pretax estimated March 2022 earnings and [ price ] estimated March 2022 book value per share of 2.2x is still trading at a discount to its peers. Based on a strong business franchise, growth potential and attractive ROE, we expect that IIFL Securities will be an excellent investment for Fairfax India. I'm pleased to inform you that after a hiatus of about 2.5 years, Fairfax India completed 2 acquisitions within a short period of time. First, I think Prem mentioned, this is a bit repetitive. First, in November 2021, Fairfax India acquired 51% of Maxop Engineering from its founder Shailesh Arora for $30 million. And we will buy a further 16% in September 2022. Maxop is a precision aluminum die casting and machining solution provider for components used by the automotive and industrial customers like Honda, Maruti, Hutchinson and Regal in India, Asia, North America and Europe. Shailesh recognized Fairfax India as a long-term partner with an excellent reputation, which would let him run the business independently, allowing him to take advantage of the long runway for growth that lies ahead for this business, especially with customers in North America and Europe. Then in February 2022, Fairfax India acquired 70% of Jaynix Engineering for $33 million. Jaynix is a manufacturer of nonferrous, mostly aluminum electrical-neutral bars, lugs, connectors and assemblies. And as a Tier 1 supplier to major electrical original equipment manufacturers, such as Schneider, Eaton and Siemens in North America and Europe. Jaynix was founded in 2008 by 2 brothers and engineering graduates, Nikhil Diwakar and Ninad Diwakar. They are hands-on operators with Nikhil focused on commercial business development, and Ninad on engineering and production. Given the global movement to diversify social supply sources, we believe that Maxop and Jaynix have significant growth opportunities with existing and new customers, particularly in North America and Europe. And that with our support, each of them can be built into world-class leaders in the engineering components manufactured industry. Fairfax India has investments in several other companies. IIFL Wealth, a niche wealth manager of high net worth individuals; NCML an agricultural warehousing company; National Stock Exchange, India's leading stock exchange; Seven Islands Shipping, a tanker shipping company; Saurashtra Freight, a container freight station; and 5paisa Capital, a technology-based financial services company. All of them are excellent businesses that continue to make good progress. Our annual report has much more detail about each of these companies. With that, I'll end my part of the presentation and turn the mic back to Prem. Thank you all.

So now we -- thank you, Chandran. Now we are opening it up for questions, Q&A, 1, 2, 3, 4 right there. And if it comes online, it will go to Jeff. And if some of our presidents will answer the question, they'll come to mic here like in the morning. And so with that, who wants to [indiscernible]. Mic #3, tough question coming up.

Thanks for that, Prem. Chandran, good to see you again in person. And congratulations on a stupendous here. Clearly, you and your team has done a very good job at picking investments in India. My first question is regarding the sale of Privi Speciality. So the sale for Privi was announced on April 22, 2021. And the day the sale was announced, Fairfax India stake was valued at $230 million as per the market price. We ended up selling for $163 million. And we ended up giving a majority stake in the company. Typically, when a majority stake is given, it is given at a premium to the market price. So I want to understand why it was not disclosed that this deal has been made at a particular price, which is independent of the market price because it reflects very poorly in terms of transparency. Everyone here and the shareholders of Fairfax India, they track the public price of the shareholders to gauge where the book value is at. So could you please explain why it was not disclosed and why we ended up selling at a discount?

Yes. You asked some pretty tough questions, but very good question. So when you are doing a deal, the founder is looking to buy it and the price is going up. You don't do a deal and say whatever the price is, if it's 2 months from now or 1 month, that's what we're going to sell it at. You do a deal, you negotiate it. And if it's like $12 or INR 12, and stock goes up to $15, so be it. If it goes to $6, the same applies. We don't expect the guy to reneg on the commitment that he's made. Whenever we buy, you shake your hand and we say, that's the price we're going to sell. We're not going to change it just because the price went up in the stock market. And so we looked at it and he was keen on buying it. We made a 27% compounded rate of return, right, Chandran?

Yes. Yes.

Approximately, which is a fantastic rate of return. And as it happened, you're exactly right, the price went up. And we didn't change the price. We said that's fine, a deal is a deal. We like the guy who runs the company, and we consummated it. Fairfax, over 36 years, when you shake our hand and you do a deal, then we'll say we'll do due diligence if we're going to buy something from you. It might take 3 months. But in 36 years, we've never changed the deal unless we find something. And we haven't found anything in 36 years. And second is we always complete it, it's always done. And so that's just the way we operate. That's a good way to operate. People like dealing with us because of that.

That's where -- and I completely respect and understand that. My point is that if you have signed some sort of a binding agreement, it is the responsibility and fiduciary duty to disclose it within the same day. If there -- an agreement has been signed, why was it disclosed on April 22 when it is no correlation with the market price?

You're a terrific guy. We don't -- a binding agreement is not -- we signed a letter of intent with you. And that's binding for us. It's not binding for the securities law and all that. For us, it's binding. If we find something, then we'll change. But otherwise, it's binding. So we never disclosed until it's closed. Even though in our minds, when we shake your hand, we say it's a deal. It's a deal unless we find something. And we'll do all the due diligence and -- but it's a very good question. We don't look at it like that, that it's a binding agreement. You have to disclose it. It wasn't a binding agreement. It's just that we do business like that. For us, we won't change it because the price went up.

Sorry to harp on it a little bit longer, but you recently did a deal for IIFL Wealth, which is expected to close in the third quarter of this year. For that, you have disclosed exactly what price it will be closed at and you have disclosed that 2 quarters in advance. So why is there a discrepancy in terms of disclosure for these deals?

No. In the case of IIFL -- Chandran, please add. But in the case of IIFL Wealth, that was the deal that was done and the price was fixed. And so that's what we did. But...

No, that was done in the market, not just by us, other sellers were involved and the buyer wanted to disclose it, so it was disclosed. It's very dissimilar to Privi.

My second, sorry, I had some...

No, go right ahead. You got good questions.

My second question is regarding the management and performance piece.

Just come a little closer to that. Yes.

Yes. My second question is regarding the management and the performance fees that Fairfax Financial charges. Above our hurdle rate, the performance piece is tied to the book value and not the share price, which implies that even if the book value goes up and the share price does not Fairfax financials still generate a performance fee. I understand that it is tricky to tie it to the share price because the share price could be extremely volatile, it could be $30 today and the book value is $20. So my question is, why don't we pick the minimum of share price and book value? So whichever is the minimum of those 2 prices and then tie the performance fees to that minimum so that you guys only make money in terms of performance when shareholders make money.

Yes. So it's another very good question. Performance fee is based on performance, long-term performance, 3 years each time. We take it in shares, unless it's selling at more than twice book value, I think, in which case, we have the ability to take cash or shares. It's a fair way to do it, we think. Share price and book values, sometimes the share price will go up way high. I think I don't know if you were the guy in the Fairfax meeting talking about Netflix, Netflix has come down 35% in 1 day. So we don't like tying it to share price because we expect that share prices will eventually reflect underlying net asset value or book value. We're very conservative in how we value book values, net asset values. But your point is well taken. And so every -- what you have to do accounting-wise, you have to set up a -- so I think the first time we'll have now 2023 is when the incentive fee will come in and calculate it. But in 2021 and 2022, you'll still have to accrue it but you might have to reverse it. It's only at 2023, 3 years down the road that you'll pay it. But accounting is such, you have to accrue it as it happens, and it goes up and down. And do you want to add that, Chandran?

No, that's exactly right.

That's absolutely fair. And I'm not asking you to tie it to the shareholder like share price. I'm just asking wouldn't it be more prudent to tie it to the minima of share price and book value so that performance fees is only generated when shareholders make money. If the book value is $20 and the share price is $12, you don't make money. If the book value is $30 and the share price is $20, you still don't close. It's the minima of those 2 prices.

I don't think -- if you review the record, I don't think you'll see anyone who's got minimum of share price or book value.

But we are shareholder-friendly here...

We'll -- seriously though, we think we can do much better than what we've done in the past. And really, this is not a good time. The stock price is low. The net asset -- India is just coming out of the pandemic. All those assets that Chandran went through are worth a ton, that Bangalore International Airport is talking about going to 90 million customers, 60 million in another few years and then 90 million. And I think it's selling at about $3 billion for the whole thing, right? How long is that going to last? And we got a 16% return on capital, return on equity. So you have to take a long-term view is what I'm saying, but those are very good questions, and thank you for asking them.

Can I just get in.

One more, sure. Go ahead.

My last question is regarding TCI, Egypt. So...

Hope you have a lot of shares.

I do actually.

Go ahead.

My question is, why are we carrying it at such a conservative valuation of $250 million when they recently raised money at $848 million? And what is the process? I had to close that gap. Like is there any fundamental reason why there is...

Which 1 are you thinking?

The TCI is just -- who raised money at $848 million and Chandran...

Sanmar.

Which one?

Sanmar...

Sanmar. Sanmar, we know -- and Chandran, please add, but Sanmar was leveraged, really good company. They expanded in Egypt, and they expanded at the wrong time. And so they had a really tough time. That $848 million that you're talking about, that was what the banks did. We are conservative still, but I think you are a good investor because you picked the right point. We should -- we can easily be $848 million. We could easily justify it. Chandran and I were talking about that. But we wanted to be conservative, let the company make money. It's just about making money -- making good money in Egypt. And there's all sorts of possibilities, of course, as you can imagine. [ PBC ] in Egypt currency is down a little. You can export to all the surrounding areas. And we like to be conservative, right? Till you -- you don't know what you can get until you sell. And so we just want to be conservative.

Yes. And it's based on cash flow, discounted cash flows that we're using very conservative discount rates, so we're comfortable with it. It will come up on its own.

Thank you. Very good questions, by the way. Thank you for asking them. That's #3. We go to #1.

My question also has to do with performance fees. The hurdle rate that the agreement is -- sorry, the hurdle rate at which performance fees are paid about is 5%. And I think that you and I both agree that a passive investment in India would likely earn more than that. So my question is, why is the hurdle rate so low?

Yes. That's another good question. We went to one of our biggest investors when we went public, IPO of $10 a share. We took it to the biggest investor, and we negotiated with them. He said, is this fair? Like all of that incentive fee. We negotiated with them, and they thought it was fair. And we are hoping that net-net an investor can make at least 15% after fees with us. We haven't done that in the past, only 10%, but we're hoping that over time, it will be more like 15% after fees. But that's a fee that we negotiated with our largest investor at the time. We took it to them, made sure they refine all of the -- very big institution. They looked at it all and said that's fine, and that's what we've had.

Exactly.

Thank you very much. Let's go to the Internet and Jeff Stacey. Jeff?

Prem, the first question online is a 2-parter about the operations of BIAL. Do you anticipate any changes to the scale or pace of future development plans at the airport or the peripheral real estate monetization program as a result of pandemic-reduced passenger traffic the last 2 years? And then the second part of this question, do you believe that BIAL will be able to continue to grow cargo volumes at the same rate as the last few years when passenger traffic returns to pre-pandemic levels?

So this is a very good question, Jeff, and it was one that came into the message box a little earlier. Mr. Hari Marar, who's a wonderful CEO, runs Bangalore International Airport, just in the last couple of days got COVID, so he couldn't come. So we said, hey, listen, this question has come in. Would you be kind enough to answer it, and then we'll play it. So he said, fine, he taped the answer, and that's what you're going to see here. Hari?

Good afternoon, ladies and gentlemen. At the outset, I'd like to express my sincere disappointment of not being there with you in person this year. Last 2 years have been extremely challenging for all of us, and it's been particularly so for the aviation industry. We are an industry that thrives and survives on bringing people closer together. And yet the coping mechanism that the world agreed on to meet this challenge was to keep people apart. And this resulted in the aviation industry coming to a grinding halt on more than 1 occasion resulting in losses running into hundreds of billions of dollars across the globe. We had a fair share of challenges in Bangalore International Airport as well. We had to keep operations ongoing. We had to introduce contactless travel. We had to keep our employees and our passengers safe. We had to ensure the continuity of 100-plus projects as part of the $1.7 billion expansion program. We had to ensure cash flow continuity for both operations and projects despite our revenues coming down to almost 0. We had to ensure that our employees and their well-being was looked after, managing their anxiety with regards to their jobs, and their income had to be managed and so on and so forth. In the midst of all this crisis, we also found some amazing opportunities that has resulted in some great successes, successes that enhanced our reputation in the market, successes that enhanced the employees a feeling of trust and dependability as employers in our stakeholders. And most importantly, enhanced our ability to deal with crises even in the future. I'm not going to get into details of all that we did due to paucity of time. But the way we navigated this crisis and the leadership that we demonstrated during this period has become a case study that has been published by the Ivey Business School, London, Ontario. For those of you who are interested, do contact my colleagues who are there at the AGM on how to access this document. Looking forward, I feel all the signals are right. Every subsequent wave has been characterized by what I call the 3 Ss. Each wave has been shallower in terms of traffic drop, shorter in terms of duration, and steeper in terms of the recovery curve. This is a great sign for the industry. It's a great sign that the underlying demand for air travel is not going anywhere. It remains. It is also a great sign of the fact that people have become more confident in dealing with this crisis. It's a reflection of the resilience of people. And even if there are subsequent phases of, let's say, lockdowns that may come up, I believe that the recovery will be soon and will only get faster as we go along. This is reflected also in the traffic trends that we're seeing right now. Our international traffic is back to about 90% in terms of the routes that we used to operate, not in terms of traffic volumes as yet. And we see a new route development also happening on the back of the disruption that we have seen in the industry during this period. As far as domestic air travel is concerned, we are back to 90% of pre-COVID levels. And we see in the next few weeks, we will surpass 100% of pre-COVID levels and get on to a tremendous growth trajectory. Air cargo growth has been a phenomenal story during this period. We have seen some amazing growth rates in the last 1.5 years. We were the first airport in India to go back to pre-COVID levels as early as middle of last year. And we see that the demand for air cargo will continue on the back of the demand for e-commerce, perishables, electronic components from Bangalore. And as a result, we are focusing on capacity development as far as air cargo is concerned to make sure that we become the cargo logistics hub for South India. And this is reflected in the fact that global majors like DHL, UPS, and FedEx have established their handling centers at Bangalore Airport during this period. The coming years or the coming year particularly is going to be committed to further capacity creation because I believe this growth is here to stay and the growth or the original -- we will be back to our original trajectory of growth sooner than we anticipated. And, therefore, our first focus is to complete the projects that we have on hand and then immediately get back to the master plan development that we had originally thought of, which means that refurbishment of Terminal 1 and Phase 2 of Terminal 2 are around the corner. As far as real estate development is concerned, we did see a drop in demand for office spaces during this pandemic, but we see a resurgence in office -- in the demand for office spaces, which is the mainstay of our real estate strategy. There is a resurgence for -- a resurgence in demand for office spaces that are sustainable, that focus on healthy living, and so on and so forth. And therefore, we have started negotiations for closing out a couple of deals in business parks, jewelry park, the first phase of our retail, dining, entertainment village. The 4 deals that we have signed are also in various stages of development and are seeing good progress as we speak right now. So overall, a message of positivity, a message of growth, and a message of capacity development is what we have from Bangalore Airport. I wish you all a wonderful day and greetings once again from Bangalore.

Hari Marar, CEO. Hari is building the best airport in India in Bangalore, third largest city, and one of the best airports in the world. It's a fabulous airport, second terminal, massive construction taking place. Chandran has seen it in terms of its construction. And I haven't seen it yet, planning to go to India soon, and phenomenal what he's doing. And there'll be more airports in India that are going to be auctioned off, and Anchorage with OMERS as a partner, we'll be looking at those possibilities. Do we have any question or we go into -- here, we'll go right into Jeff then.

Your comments about Anchorage set up the next question perfectly. Could you add some color to the size of the addressable market that Anchorage has for Indian infrastructure assets? How open is the Indian government to privatizing these assets?

It's massive. They have -- the road building, ports, railway stations, they haven't exactly decided. It's got a huge network, and they're going to privatize the rail stations, railway stations. And so a huge opportunity, Jeff, and Hari is going to lead that charge too. So I don't know, Sumit would you -- can you quantify that at all? Sumit is the guy who runs Fairbridge and CEO there. And we're really happy with what he's done at Fairbridge, Sumit?

Thank you, Prem. So government has come public in saying they have got few hundred airports, which is right now controlled and run by government. Out of all the airports in India only 6 or 7 airports are private. Rest everything else is by government. This year, the target is to privatize close to about 100-odd airports. Even if we were to discount that number, at least 20, 30 airports will come this year, which will be privatized. And through Anchorage, we'll be looking at all those airports.

Thank you very much, Sumit. Jeff, anyone standing? If I don't see anyone standing here, then I'm going to go right into Jeff. Jeff?

Another question about the airport about BIAL and the valuation process. Question is as follows: Fairfax India utilizes a number of widely accepted valuation methodologies to establish the fair value for each of its private investments. Could you take us through the valuation process for BIAL with respect to the different inputs and model assumptions used in determining fair value?

Thank you, Jeff. That's a good question. So when there's no public markets -- with the public market, IIFL, we'll take the public market stock price. Sanmar, we can take the stock price. But when there's none, then you have to have models to figure out what it's worth. And the lady who does it for us, our Chief Financial Officer, Amy Sherk. Amy, why don't you just address that question?

Hi, there. Good afternoon, everyone. And so the Bangalore International Airport valuation is valued the same way that all of our Level 3 valuations are valued, which is using a discounting cash flow model. So we look at the 3 businesses separately. So for BIAL, we look at the airport, the real estate development, and then the hotel. So the airport is the lion's share of the valuation, and then the next comes the real estate development, and then the hotel is quite small, all things considered. We get cash flows from BIAL's management. These are Board-approved cash flows, and we get updates at least semiannually. Of course, during COVID, we were getting much more regular updates. For some of the key assumptions, we use discount rates between 12% and 16%. 12% would be for the airport, which is the more established business and the one that has been running for quite a number of years. And 16% would be used for the real estate, which, of course, is in the phase of development. In terms of the key assumptions for the airports, as Chandran mentioned, we are in a phase of capital expansion. And so we have incorporated in our models and the Terminal 2, which is currently under construction. We expect Phase 1 to be complete by the end of 2022. And then the second phase of that expansion to be complete by the year 2029. We also have a third terminal, which we are expecting to bring online in 2034. So with these expansions, Terminal 2, Phase 1, we expect to add 25 million passenger capacity. Phase 2 is expected to add another 20 million. And then by the time phase -- sorry, Terminal 3 comes online, we're expecting over 90 million passenger capacity. In terms of the COVID assumptions, we assumed a gradual increase in domestic and international travel, over the next 2 years returning to pre-pandemic levels in fiscal year 2024. We have also assumed that in future control periods we will be compensated by an adjustment in the tariff mechanism in order to compensate us for losses during the period of COVID. So key assumptions, of course, are our passenger traffic assumptions, which drive the revenue in the airport, non-aero revenue, and of course, the user development fee or the tariff charged. In terms of real estate, we did make the assumption that there will be a delay in the real estate development plans between 12 and 18 months, depending on the project. It is 460 acres of land, which is very unique in a city like Bangalore. And so we did look at other real estate transactions that have occurred over the past year in Mumbai and Delhi. And that gave us comfort that our discounted cash flow model was in line with real estate transactions occurring recently. And then, of course, the last bit is the hotel, which is also expanding with over 200 rooms being added. We did extend the construction plan over 12 months in order for the hotel to complete that big construction plan. All of this has been encompassed in the discounted cash flow model, which we use to value Bangalore.

Thank you very much, Amy, our Chief Financial Officer. We'll go on to Jeff, you're on from the Internet.

So I know you touched in your presentation a little bit on the economic outlook for India. But I just thought this question might get at some different nuances of that. Is the economic outlook and investment case for India still attractive? What impact will rising interest rates have on Indian equity and debt markets going forward?

Yes. So, yes, we think, Chandran and myself, all of us think the economic growth in India is so attractive, the interest rates are -- they've come down from like a few years ago, like they're like 6%, 7% for 10-year Indian government bonds. Inflation is a little on the high side. It should come down. But when you're growing -- like if the economy grows real, 7%, 8%, 9%, you add 5%, 6% inflation, the whole nominal growth is like close to 15%. And then on top of that, you take the fact that they're under-penetrated. I was talking about insurance, for example, the phenomenal growth available, and pretty well everything that you're looking at. And so the fact that interest rates go up some might slow it down a little, but the underlying economic power is very, very significant. I don't know, Chandran, do you want to add anything?

I think we'll let Gopal talk about this a little bit more.

Gopal, that might be a good question. Gopal has been the Chief Financial Officer of ICICI Lombard. Chandran put him on -- in ICICI Lombard, when we were partners with them. And then we were very fortunate that Gopal wanted to come over to Canada. And so he came over, and now, he's with Chief Operating Officer of Fairfax India from Toronto. Gopal?

Thank you, Prem. Thank you, Chandran. From an interest rate perspective, of course, currently, what we are facing in India is something what everywhere we are facing globally. The current inflation dynamics is something which is externally -- external shock. It's not something induced from domestic consumption point of view because India has been going through a period of huge economic -- I mean, credit cycle contraction. I think Prem has illustrated that in his presentation about the fact that India is just about coming out of the credit cycle that we were going through from the year 2012, '13. And our credit growth in the system has been not more than the nominal credit growth. In fact, there are years where the credit growth has been below the nominal credit growth. So given that, -- so monetary policy has got its own set of limitations, given that it is a supply shock driven. So, therefore, rightfully, RBI has been behind the curve. I mean markets are adjusting. The interest rates always adjust -- I mean, they always ultimately track the inflation anywhere in the world. So India is no exception. What we are seeing since the beginning of the current calendar year, the 10-year bond yields in India have hardened by almost 120 basis points. And perhaps that already we have had about another 40 basis point increase from the lows. So the markets are right now discounting about 100 basis point of interest rate tightening during the course of the current calendar year, which is very well discounted. If you see the repo rate of 4% and the 10-year bond rate is holding around 7.2%, it's a huge 320 basis point spread. So I think at best, we feel -- we don't know how long this inflation thing will persist. And, of course, RBI is behind the curve, but RBI has been doing some kind of a liquidity withdrawal from the system. That has also been 1 of the reasons why we saw the interest rates hardening already, markets are leading the central bank action. In order to manage the external account -- risk coming out of -- for example -- I mean, in India's case, the current account deficit, we are looking at -- we were -- for the ensuing year, I think we're looking at almost 3% of GDP. That is entirely driven by the higher oil prices because import accounts for almost 28% of the India's total imports -- I'm sorry, oil accounts for almost 28% of the import bill in India. So we expect maybe another 30, 40 basis point of increase in the interest rates during the year. But, of course, coming to the equity markets, given the interest rate hardening, obviously, the interest rates are going to impact the valuation some, and there's a global phenomenon. But I think there is -- as Prem rightly pointed out, there's kind of a dynamic between the cost of capital and the growth. So in India, we're looking at -- even in this year despite -- if you look at the overall index about 2/3 of the companies would still print good earnings growth because 40% of the index is basically financial sector, which was going through the period of credit cycle and the bank's balance sheets are really in great condition right now. So banks will be reporting great numbers, and we also have metals and other basic commodities companies. They all will report growth. So we are looking at least 15% growth in earnings. So, therefore, I think we are seeing some kind of correction in the market. FIIs have sold almost $30 billion of equities. In fact, largely India's -- the other thing which we see is domestic savings have been quite strong. Household savings are looking great. They are almost back to the mean level of around 23%, 24% of GDP. And we are seeing a reasonable allocation to equities happening. And we have seen almost $30 billion of FII's selling has happened with least correction in the market. In the past, that would not have been the case. And this is actually despite all -- we have seen on a monthly basis inflow of almost $2 billion -- $1.5 billion to $2 billion of regular inflows from the domestic household savings coming into the mutual fund industry, which comes into equity markets. So we are pretty much -- that is actually still the household savings in the equities is 105%, so I think 4.8% or 5% around. And coming to the growth, why we see the growth is growth outlook still remains, and India is best positioned to maybe get the current global conditions, is precisely for the same reason, we're coming -- we've just -- we are out of the credit cycle and the household balance sheets look great. In terms of the leverage in the system, I think household total credit -- the household sector will be about 25% of the GDP, and the mortgages are hardly 11% of GDP. India is, I think, one of the lowest in terms of mortgage penetration. And the corporate balance sheets look great. Corporates have deleveraged over the last 7, 8 years. So we have been -- whatever growth we have seen in the last 7 or 8 years has been without -- absent any kind of good investment cycle, I mean, investment-driven growth. So we are seeing the conditions are right for investment-led growth in the economy. And we were seeing actually some signs of that actually in the housing segment especially. We started seeing -- because the residential housing was going through a period of 7 or 8 years of -- I mean, consolidation. It was going through a period of correction. There were a lot of structural reforms done in the system. I mean, they brought in the regulator for the residential market. And we are beginning to see the revival in the housing construction and housing sales. Top 6, 7 cities have reported 30% or 35% growth year-on-year. We have a long way to go. In terms of the corporate profit cycle, we were seeing corporate profits as a percentage of GDP had come down as low as 1.5% of the GDP from the peak of about 6% or 7% way back in the previous cycle. And we have just come back to the mean level of about 3% to 4% right now. So we have a way to go. So, therefore, I would say, to summarize, the current -- given the current global conditions, India is very well positioned to navigate the interest rates. We'll have some impact on valuation, which is not only pertaining to -- I mean, it's not only impacting India. I mean, it's a global stuff. And I think the growth and cost of capital, the dynamics will play out. Thank you.

Thank you very much, Gopal. Yes, number three.

Chandran, congratulations to you and the team on a terrific year, and thank you for taking the time to answer questions. Returning to the opportunity of the privatization of government-owned assets in India, what advantages do you think Fairfax India and Anchorage have for other private equity players and other companies in the local market?

Yes. In India -- very good question, in privatization, if it's -- we've got a very good reputation in India. People want to deal with us. But when you are in the auction process, it goes to the highest bidder. And so likely, we're not going to be the highest bidder. So that's just a fact, that's how it is. So we like to deal with these Maxop Engineering and Jaynix, where they understand the type of shareholder they're getting, that we're going to be very supportive of them. But in an auction process, you never can tell. We're going to be looking at everything that comes, but that's the approach. They have to go through an auction process. But sometimes, auctions fail. So Air India, they went through an auction process. No one wanted to buy it. And ultimately, Tata bought it. And so they're open, they're flexible. We're looking at some of the assets that they want to sell, and -- but we are also return-oriented, and so -- but we see the huge opportunity in India. It's a good question.

Second question, sorry. Do you think that the current low share price is a disadvantage in raising capital for these type of acquisitions?

For Fairfax? Yes, of course, we weren't -- no chance of issuing shares at $12.5. We're buying it back. We bought 10% shares. We bought it in the first quarter. We continue to buy it back. You'll never know when it will change. India gets popular again, the business normalizes, the stock will take up, but we would never raise money at these prices at all. But we've got, as I told you, I think Chandran had shown in his slide $440 million, something like that. And so there's -- we've got enough capital in our -- with us. And we've got other ways of raising capital through partnerships as opposed to stock issues. So we wouldn't issue shares here at these prices. Whatever the opportunity is, we wouldn't do that.

Thank you for being very direct in that answer.

Thank you. Thank you for your question. Thank you very much. Jeff, should I come back to you from the Internet?

Sure. A question about NCML. So NCML is the only Fairfax India Holding that struggled. What was it that you saw in 2015 that you deemed it to be attractive? What was wrong with that assessment looking back with the benefit of hindsight and what will it take to make NCML successful?

A little bit of luck. But what we saw was grain storage in India was a government-owned thing unless -- unlike in the United States and Canada. Grain storage is all government. So I think this is right. But in the great state of Punjab, they thought they had a ton of grains that were stored, government storage, then they went and opened it and found there's nothing there. And so they're privatizing it. We were the -- when we bought this NCML, we were the largest private grain storage company. And so grain storage, you get labs, laboratories. So they take sacks of grain, your grain and his grain and all, and keep it separate. You can't mix it unless you have the same lab testing it and saying your grain is the same as his grain, put it all in a silo. So that's what we saw that was attractive. It's tough to execute. There's a lot of -- lack of a better word, corruption in the industry and to actually get it done is much tougher. We made some silly mistakes, not Siraj. We made it before. And so we are cleaning all of that up. And we were lending, for example, to farmers and for commodities and stuff. We've got -- that's not our expertise. NCML, grain storage was the expertise with. Do you want to add to that, Chandran?

Yes. We were doing business. Storage is not our business, and that's where the returns are not very high, but there are still returns. And we wanted to get into silos, where the returns look decent. There too because of delays and land acquisition issues the returns are not as good. But the most important problem was that we were doing business, which looked good on the surface, supply chain management and the collateral management. And our friend, Roger calls this picking up nickels, but a freight rate is coming at you and a couple of big freight trains came. So that set us back. So Siraj is now focused on getting back to the basics of doing the businesses that we wanted to do and not trying to pick up nickels in front of freight trains. So we are in a work in progress, and we are confident that we will turn this around.

Jeff? Yes. Number four, if you don't mind.

Sir, my name is [ Jean-Francois Haber ] from Montreal. First, very impressed by the compounding return. It's really good. And among others, we're happy about that. It's good. So my question is, as a value investor, from time to time, there's like depression and crisis and things like that on, let's say, big company, established, growing company, HDFC, aero, and others in India. Do you think in some future you might take advantages of these market like anomalies and take advantages of this arbitrage within the financial market of public companies with Fairfax indeed?

Advantages -- arbitrage in what sense?

Well, let's say, HDFC goes to 1x price to book and you have the capital, would you invest in HDFC?

We've done that. If some ABC company comes down significantly and Chandran and Sumit and Gopal and all of us think it's valuable in the public markets, we've done that before. We'll buy the stock, $20 million, $30 million, $40 million worth of stock, and hold it until it recovers. Because we know the -- in India, we've got tremendous capability. Previous -- in Fairfax, a good gentleman said we didn't have any -- we made a lot of mistakes in Africa, and we did. We didn't have any expertise. Didn't really know anybody. But in India, we've got a ton of expertise. And a lot of these presidents that I hear, you've heard some of them, and just we know a lot of people. We've come from India. Like I came at the age of 22, and Chandran came at about the same age. So we got friends. We went to engineering school there, and so that's a big advantage in India, and -- but we take advantage wherever we see it, right?

Yes, absolutely. Yes.

Yes. We would do that. Yes, we would do that.

Thank you so much.

Thank you very much. Thank you for your question. We go back to -- we'll go back to Jeff.

Here's an interesting question. If Fairfax India shares continue to trade below book value, would you consider spinning out stock of subsidiary companies to Fairfax India shareholders?

Unlikely, I think, but we'd certainly consider it, but unlikely. We did buy more shares back, all those buyback. And eventually, it will turn. You never know when it will turn. But I remember a long time ago, in Canada, Ford Motor Company, United States Ford had Ford Canada, and only 10% was public. And people said, 10% with no float, how can it ever go up. And then Ford Canada stock was selling at $40, $50. It made $40 in earnings. Stock went up to $200, like that. And so the float and all of that doesn't make sense as long as it performs. Sometimes the environment in India will be reflected with normalcy. And we expect the stock price to take off. We can't predict when though. In the meantime, if it continues to be low, we'll buy it. We just bought 5 million shares. Fairfax bought it. And Fairfax India bought a couple million shares. So we'll continue doing that. Jeff?

I'm actually going to put 2 questions together because they both involve proposed timing on IPOs. And so can you provide any update on the likely timing of the National Stock Exchange IPO as well the Anchorage transaction that you've created? I know the intention is to do an issue at some point. So just looking -- both questioners looking for updates on the proposed timing of those 2.

On Anchorage, it will be -- we're looking at the opportunity as and when it comes. Markets are -- go up, they go down. So we'd certainly be sensitive to that. And I guess, National Stock Exchange, any update on that?

On Anchorage, just to add, Sumit can talk about it. But we've already started the process. It's a long process of approvals that Sumit has put into effect. And we are hoping, Jeff, that we'll get it done in the next couple of years. Sooner, we hope. But approvals are a tough thing in India. And we learned from how long. We almost gave it up. The NSE is embroiled in a dispute with SEBI, the regulator on some irregularities that happened 3, 4 years ago. And that is holding up the IPO process. So it's very difficult to guess. We've been saying next year, next year. We don't know when it will happen. But in the meanwhile, the private market for NSE is doing extremely well. It's one of our best performing holdings.

So if we really wanted to sell it, what you're saying is, in the private market we could sell it.

We get calls every week.

And you still think it's cheap, so you're not selling it. But that's the answer. I'm looking around any other questions for you.

We can certainly keep going here. There's a lot of questions coming in.

Go right ahead.

This one about sort of the deal environment and the ability to make transactions at the moment in India. Fairfax India has recently completed 2 long-term -- new long-term private investments. How would you describe the current environment for deploying capital to long-term private investments in India? I would also be interested in learning if Fairfax India has a sweet spot for its private investments with respect to size, industry, or any other structure considerations?

So that's a good question, and it's really up Sumit's alley. All of these things come to Sumit. He's got -- Sumit just describe Fairbridge a little, how many people you have there, and then if you don't mind, please answer that question.

Sure. Thanks, Prem. So in India, we have a small setup, we call it, Fairbridge. And we are about 6, 7 of us, financial analysts. Our job is primarily to look for opportunities. And when we spot opportunities, we do our due diligence, do the valuations, talk to the counterparties, work with them, develop a solution and then bring it to Chandran, Prem, and the investment committee. Once we get the approval, we go ahead with the deal. So that's typically the process over a period of 10, 11 years. It's very easy to go wrong in India with respect to people. So what we always look for is a set of honest and people with established track record. And that's, I would say, about 80% of our due diligence initiative. I'm happy to report in 11 years, ever since I'm working with Fairfax, we haven't gone wrong on people. So we have developed some kind of an ecosystem, intelligent system, whereby we always bought the right partners. In terms of 2 deals, we did exactly that. What we look for is companies which have established track record, and we always look for 8, 10 years of cash flow generation. That's the most important metric for us. People who have been running this, and the important part is people who have been running this continue to work with us. And in that context, the 2 deals that we have done in last few months, these are all started by first-generation entrepreneur, they continue to run the business. We're hands off, always there to support them, but they are the people on the ground running their businesses independently. They continue to hold a significant amount of stakes to stay interested in the business, and our job with them is to kind of bring a little bit of governance and financial discipline when they are running on the ground, taking opportunity of the growth that India is offering. In terms of deploying long-term capital, as you know, last couple of years, public markets, the asset pricing went through the roof. That also seeped in a little bit in the private markets as well. Everything which is of size and quality was very expensive. We stay disciplined in terms of the entry valuation. We -- thank God, Prem, I should not say that, but I -- Prem never forces me to do deals. If he would, I'll do wrong things, but he doesn't. So that's why we stay focused. And now what we are seeing is, as Gopal spoke, there will be a little correction that we are seeing and -- in the public markets. We are also seeing that's impacting private markets. People are more conducive to sensible valuations, and we are seeing a lot of deal flow right now. That's one area. And traditionally, that's where we have kind of focused all this while. The other area, which is opening up, and we have just spoken about that, financial services. The balance sheets have become relatively healthier, and we are seeing lots and lots of opportunities in financial services. Government monetization program is another interesting opportunity. It's a large opportunity, as Prem said, $80 billion. And there are -- within government monetization as well, there are 5 or 7 subsegments. There will be an auction process, but a lot of times they look for track records and a certain quality of partners that government will divest those assets to. And we generally qualify in most of those cases. So I'm fairly confident we'll find many opportunities. And perhaps this is the best time to -- for India because these are all established assets. Government has spent time, money, efforts over decades to develop these assets. They have not been performing, and that's the reason why government is trying to exit. Private parties, who come in at this point in time, they have established assets. They bring in the management capabilities. They bring in capital, modernize those, and the opportunity is very, very high. And there are enough and more case studies within India where government assets have worked very well in private hands. So I think those are the opportunities to deploy long-term private capital. That's pretty much from me.

Thank you very much. That's an excellent, Sumit. Before I go to you, just one thing. CSB Bank has gone through a transformation, been a phenomenal success story. Rajendran has been key in that. And we are very fortunate. Rajendran had to retire recently, but before that, he had hired Pralay Mondal. And Pralay is the President-elect. And I'd love to get you here so that you hear Pralay on CSB Bank. Pralay?

Thank you very much. It's an opportunity to talk about CSB. I think it's a great opportunity. But before that, let me just talk for 30 seconds on what the banking landscape in India is and why CSB is a great opportunity we are all looking at. So as Gopal was talking about that typical India banking credit system has been anywhere between 2 to 3x GDP. And GDP if we even look at 8%, so -- and take a 2.5 multiplier of that, I think somewhere between 15% to 20% is given in terms of credit growth in the next few years. And when I look at it, as Prem has been talking from the morning, that we look at the next 10 years, just not next 1 year or 5 years. And when you look at that opportunity and then you look at the banking system and look at the consolidation that's happening on the public sector side, where the 3 large public sector banks have been formed through amalgamations and mergers and then what's happening on the private sector side, becomes bigger. But I have worked in HDFC Bank for many, many years. The 30% growth has come under 20%, and it's very difficult to go back to 30%. So if India wants that kind of a growth and banking system has to give that support, and it will -- has to happen, there will be enough opportunity for new banks to find its space, whether it's this niche or in the larger scale space. So that's where I want to now focus on CSB. It's, I call it, 100 years old startup. We just completed our centenary year last year. We celebrated. At the same time, we questioned that in 100 years we have reached a level which is very small in terms of size and scale. So what it takes to take it to the next level. And that's where we did our brainstorming. And we said that we need to expand, and we have to look at it as a bank, which has a universal banking license. It's just not a small finance bank or a payments bank. It's a universal banking license. So in short, what it means is what HDFC Bank can do, what ICICI Bank can do, what Axis can do, CSB can do. And if you can do it, what is stopping us from doing that. And that brings us to the next 10-year strategy, what we will do. And 20 years back, to build this scale and to -- and ultimately we have to build a franchise, and when you want to build a franchise, it's customer acquisition. So 20 years back, it was to be door-to-door knocking to get customers. Today, we can build this customer base through digitally, through partners, and equal-minded partners, where trust is the most important thing. So the step one, which we will look at CSB is how do we enhance our tech stack. And based on the tech stack, how do we create trust in our partners and build partnerships by which we can increase our customer base. Number 2 is, of course, building product, services, processes, governance, and leadership. And along with that, how do we ensure that we create customer service. We ensure that once we get a customer we onboard them well. And as we build scale, we cover all parts of the country, whether it's the deeper geography, which is the -- and there's a lots happening as Prem talked about in the morning, or we look at the payments ecosystem. And again, there's lots happening there. UPI is a big success. I mean, sometimes we underestimate what we have done in India in the UPI. And I was talking to somebody during the dinner yesterday and day before yesterday. I think it's phenomenal what has happened in the UPI space. And that connects the inter-ecosystem very well. The third part what is happening is, and I think that is going to happen is, as the GDP growth comes back, and it is bound to happen given the kind of government focus and the kind of developmental work which is happening, corporate credit cycle, which has not been now very, very bullish in the last -- because corporates has been deleveraging over the last 2010 onwards, 2012 onwards. I think banking system is in the best situation right now. So the corporate credit cycle will start picking up, and that gives us an opportunity in CSB to focus on retail SME to start with, build a scale, and then go to the corporates because to go to the corporates you need to have a scale. At our current scale, we can only knock the doors, but we can only work on the mid-markets. So there's a lot of things which we are doing, but the plan is very simple that key in governance, ethics, integrity, process, centralization of processes, decentralization of decision-making, creating distribution. India will never go fully digital. It will have some distribution because top 10%, 15% of the customers in any bank contributes to 80% of the revenue and 100% of the profits on the retail and SME side. So if that is so, and those customers need branches, we'll also expand branches. So we are expanding around 20% branches every year, and we'll continue to expand around 100-odd branches. I mean, the other day was seeing HDFC bank had 550 branches announcement the other day. So branches is there, but we will leverage the digital ecosystem a lot more. And one advantage we have is that since our tech stack has to be built up completely from bottoms up, we can actually not only take the latest technology, we can use the shared services technology, which comes cheaper. More importantly, we don't have a legacy of moving the old system to the new system, and customization is not an important issue for us at all. So tomorrow if HDFC, ICICI, they have to take a new system, they have to customize and put in there, so making the new system inefficient. For us, we don't have that problem. So when we look at the whole ecosystem, I think I'm extremely bullish. And while we'll not focus for future because that's not what we do in Fairfax, but what I can commit here is if India is going to grow at 2.5%, 2% GDP, I think we will grow faster than that. And with a compounding growth story on that and with clear focus on the key ratios, I think we have a great story to tell in the next 10 years. Thank you very much.

Thank you very much. Pralay, by the way, is trained at HDFC Bank for a long time and was at Axis Bank and other banks. But his training was HDFC Bank. We have an adviser by the name of [ Paresh ]. And [ Paresh ] and Pralay go way back. And so it's a big, big plus that Pralay joined us to now take over the Catholic Syrian Bank, CSB Bank. Yes, number three.

Thanks, Prem, for letting me squeeze 1 more in. My question is regarding IIFL...

Here to hear your questions. Go ahead.

My question is regarding IIFL Finance. And IIFL Finance now houses like a substantial gold finance business as well as the housing finance business apart from a small corporate book. So when you compare like to other housing finance companies in India, which are enlisted like Aptus Value Housing or Muthoot, which is in gold finance, IIFL Finance rates has a substantial discount to those publicly listed equity. So I was wondering if there is a plan perhaps to spin off the housing finance business out of IIFL or is there any other plan to close that valuation gap with what other publicly listed equities in India?

So you asked a question. I have one of the great entrepreneurs that we have with Nirmal Jain. And Nirmal has been with us a long time. He had been -- he started a company from scratch, IIFL from scratch. And he did that 20 years ago. And Nirmal, your answer to this good man's question.

See, from being an entrepreneur, we look at long-term value creation, so we really aren't bothered about short-term market. And every point in time, we really can't look at the opportunity to unlock the value by separating, delisting. So at this point, we don't have any set plans. And I think what we want to continue doing in the tradition of Fairfax companies is focus on the business and create shareholders genuine value, and markets can gyrate up and down, but I think we are focused on the business.

Nirmal, one more.

You want to talk a little bit about the group and what's going?

Nirmal, the 3 companies in the group, a little update on finance, wealth, and securities. Nirmal created that company, and then it spun off into 4 pieces, and he's basically Chairman of all 4.

So all our companies are well placed. And in fact, COVID has been very unfortunate thing, and nobody wants it, but has been kind to financial services. And so maybe I can talk a few lines about every business starting with IIFL Wealth. So we are the leading wealth manager, and we also have asset management subsidiary as a part of it. In that company, I think there was a question by you that why the disclosure was made by -- and the disclosure was not made by -- for some other company. So the transaction here is -- not the Fairfax is a lone seller. I think the largest stake is being sold by General Atlantic, and we are a listed company in India. And so this is very company-specific because anything that we do, we need to intimate to the stock exchanges. It's not a bilateral deal between the exchanges alone -- sorry, between the investors alone because even companies involved, there are certain shareholders' rights and other things in this. And also here, it's a binding offer, but subject to regulatory approvals. So IIFL Wealth is doing well, is growing on the back of India growth story. And in fact, if you look at our numbers -- our financial numbers, which are public and we can't -- I can't talk anything more than that, then 2021 has been a great year for IIFL Wealth as well. In asset management, our strategy is focused on alternate investment, and there we're a leading player. We are about -- so today, if you look at IIFL Wealth, it's about $28 million of assets, and IIFL AMC, which is a subsidiary company, has got another $8 million. So we manage about $36 million of total wealth and assets. In IIFL Finance, we have a housing finance subsidiary company, which is only $3 million. But funnily, and that basically tells you that what is the opportunity in India, it may become -- it may be the largest housing finance company, private sector in India, as the HDFC Bank gets merged with HDFC Limited. Because all other housing finance companies, which are larger, are public sector like LIC Housing Finance or public sector parentage or PNB Housing or Can Fin. And all other housing finance companies that you talked about Aptus and Aadhar and Aavas, they're smaller in size. And many times, the market cap of smaller companies, we have to be a little skeptical about it. And we have to see through the cycles that how they perform through the cycles in terms of stock performance vis-a-vis the company's performance. In NBFC, we have gold loan, housing finance, business loan and microfinance. All these 4 businesses have tremendous growth potential. What we have been doing is that we realize that banks have surplus capital. And in fact, about $100 million of banking surplus money is with RBI just earning about 3% or so. Maybe Pralay can correct me in case numbers are not correct. So they are looking for retail assets. So what we are doing is that we are partnering with them in a core lending way, model, where 20% remains in our books, 80% goes to the bank books. And the risk is also 20:80. So what will happen is that we get margin on entire 100%. And basically, the risk is only for 20%, and the capital requirement is also for 20%. It's a win-win partnership because typically supposing we do a co-lending agreement where banks get about 8% or 9% is much better than keeping their money idle at 3%. And where banks are not able to reach out, we have our network to reach out and get those loan assets. I think the -- after COVID wave 3, the revival in the Indian economy, at least what we feel and what we see at the ground, is very strong. And inflationary, as Gopal talked a lot about it, pressures are there. But relative to the interest rate in India, it's not so significant. So supposing the interest rates were to go up by 100 basis points in U.S., it's a huge thing because it's almost like tripling from the bottom. But in India, it will just mean about 10% increase in the -- whatever rate people are used to. And real interest rate in India has been not negative. So that's also a good thing. On top of that, see, today, if you see India has $650 billion of forex reserves. And I'm sure the central bank and government will make sure that the currency is protected properly. And elections are there for Gujarat and many of the state governments coming. So I don't think that government or Reserve Bank will do anything, which will spook the growth story in any significant way. So housing finance, gold loan, all these lending businesses or loan businesses are recovering very well after the pandemic. They recurred after first wave itself. But now, I think we are seeing a much better collection efficiency as well as credit quality. IIFL Securities, again, is a business where Chandran mentioned that is relatively undervalued in his view. And I mean, I don't want to comment on that. But I think it's a great business. Our franchise is very strong there. And as an entrepreneur, I've not sold any shares, so I really don't look at stock price every day and say whether this should be there or not. But over a long 5 years, 10 years, 20 years, automatically these values get unlocked and realized by all shareholders as well. So in IIFL securities, if you look at our investment banking franchise, you look at our institutional equities, or even retail broking for targeted mass affluent, we are, I think, amongst the top of my -- among the leading players and our brand is very well recognized and respected for research. 5paisa and IIFL Securities, many times people get confused that why there are 2 entities and both of them basically cater to retail broking as well. So what happens that in IIFL Securities, we have analysts and high-quality RMs and dealers, which are expensive resources, via branches, and we invest a lot of money in research. Now, obviously, with that kind of infrastructure, you can't really offer brokerage, which is about INR 10 per trade, which is like $0.10 or $0.12 per trade. So what we have done in 5paisa is that it's a completely digital company. There are no branches. There are no expensive resources other than technology, and the infrastructure is very lean and mean. So that is catering to a very different segment of customers, primarily millennials, and those who pay it on their own, they don't need any interference or support from human interface in terms of, say, RM or a customer service or even anybody for that matter. So I think that's all. Is there anything else that I...

Thank you very much, Nirmal. Thank you very much. Excellent.

And I take this opportunity to thank Prem and Fairfax. They have been tremendous support through last more than 10 years that they've been associated with us. Thank you.

Thank you very much. We're just past 4:00. This meeting has been for our shareholders who are in person and also on the Internet. We're here to answer all your questions. And I think over 2 hours we've pretty well done that. And if you have any more questions, please in the lobby you can ask them. But I wanted to take this opportunity to thank Jeff Stacey, who coordinated our Internet questions both at Fairfax and Fairfax India, Jeff. And thank you all for attending. Thank you. And lot of our presidents came all the way from India, not easy to do. We really appreciate that, and we look forward to seeing you all soon, our shareholders, next year at the same time. Thank you very much.