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

Ladies and gentlemen, welcome to Fairfax India's Annual Shareholders Meeting. I am Ben Watsa, Chairman of Fairfax India, and I will act as Chairman of this meeting. Now a warm welcome to everyone in the room and to those watching virtually. And I don't want and -- especially those that traveled all the way from India to be here today. We're really fortunate that some of you got to see snow yesterday. And also, I don't want to discount the people that fought Toronto traffic to be here this morning. So we thank you. Like prior meetings, we have the formal part of the meeting, then the presentation and then a question-and-answer period with our shareholders. So we're going to zip through the formal part now. And I hope you don't say this is the best part of the meeting. Okay. We'll move pretty quick. So I shall ask Jennifer Pankratz, the Corporate Secretary of Fairfax India to act as Secretary of the meeting. I shall also appoint Shirley Tom and Louise Waltenbury of Computershare Trust Company of Canada to act as scrutineers and to compute the votes of any polls taken at this meeting and to report them thereon to me as Chairman. I can report that as a result of reviewing an affidavit of mailing and a preliminary report of the scrutineers, I am satisfied that notice of this meeting has been duly given, that a quorum is present and that this meeting is properly called and constituted. I propose to move quickly through the formal business. I announced that the minutes of the previous Annual Shareholder Meeting held on April 10, 2024, and the Special Shareholders Meeting on January 28, 2025, are available for inspection upon request to Fairfax India's Corporate Secretary. As well, I now formally place before the annual report of the corporation for the year ended December 31, 2024, which includes Corporation's financial statements for its fiscal years ended December 31, 2024 and 2023. The report of the auditor, PricewaterhouseCoopers LLP on the 2024 statements. In addition, I declare the total number of votes attached to the shares represented at this meeting by the proxy, which have been directed to be voted in favor of each matter to be considered at the meeting, which in each case, not less than 95% of all votes may be cast on such matters at this meeting. Voting today will be conducted by electronic ballot for those attending virtually and by a show of hands for the persons attending in person. I will ask that the balloting be open to the registered holders and appointed proxy holders. The polls are now open on the platform. And at this point, all registered shareholders and proxy holders attending virtually who have properly logged in will be able to see on the screen all motions to be brought forth at the meeting. Following the presentation on the motions, Jennifer Pankratz will confirm for us that the polls have been closed. Once the electronic balloting closes, your votes will be submitted. With your consent, I now move directly to the election of the directors. I now invite nominations for directors.

I am Amy Sherk, and I nominate as directors of the corporation for the ensuing year; Christopher Hodgson, Sharmila Karve, Jason Kenney, Sumit Maheshwari, William Mcfarland, Satish Rai, Chandran Ratnaswami, Gopalakrishnan Soundarajan, Lauren Templeton, Benjamin Watsa and Prem Watsa.

Thank you, Amy. Fairfax India's bylaws require the nominations of directors by shareholders be received by the corporation at least 30 days in advance of the meeting in order to be valid. As no nominations 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 corporation. 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 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, Jennifer and Amy. For those attending in person, I would ask you to please vote by show of hands. All in favor? Okay. Contrary? None. We will now take a brief pause for 60 seconds to allow registered holders and proxy holders to complete their electronic voting on motions brought forth at this meeting. [Voting]

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

Thank you, Jennifer. I 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 corporation to hold office until the next annual meeting. In addition, I confirm that PricewaterhouseCoopers has been appointed as auditor of the corporation to hold office until the next annual meeting. We will file the report on CEDAR+ setting out the voting results following the meeting. I propose now to terminate this meeting. After that, Gopal and I would like to talk to you about our operations, and then we will proceed with the Q&A. I will now invite a motion for termination.

I move that the meeting be terminated.

I second the motion.

Thank you, Amy and Jennifer. I declare the meeting terminated. All right. Good morning, ladies and gentlemen, and a warm welcome to the 10th Annual General Meeting of Fairfax India. What a privilege it is to see all of you here, especially those that have been part of the journey since inception a decade ago. As I said, I am the new Chairman of Fairfax India, Ben Watsa. Now Fairfax India is the first and only company in Canada designed explicitly for sustained large-scale investment in India. So before we dive in, I'd like to recognize the people who have been at Fairfax India for the last 10 years and had the vision for our company. Please stand when I call your name in no order of importance. Prem Watsa, please stand. Chandran Ratnaswami. Sumit Maheshwari. Deepak Parekh. Chris Hodgson, John Varnell. All of you believed in India. The India opportunity before it was evident to the rest of the world and your conviction laid the strong foundation we stand on today. Before we reflect on how far we've come, you gave them a round of applause, so thank you. Thank you very much. Now the average Fairfax India executive likes to talk about India 16 hours a day, but I was told that's not the case for everyone. So we prepared the Goldilocks version of the presentation for you. Okay. Now this slide, our legal team is very excited about. So just please review that very carefully. Since this is our 10th anniversary of Fairfax India, we thought we'd look at what happened to India since we began and why we're so optimistic about the future of both Fairfax India and India as a whole. Then Gopal, our CEO, will provide an update on Fairfax India and the investee companies. And after that, Deepak Parekh will provide an update -- an economic update on India. Deepak is an adviser to Fairfax India, and he's led India's most successful largest private bank called HDFC in India, and it has a U.S. market cap of $164 billion, and that's bigger than Canada's largest bank of RBC. After Deepak, we will open up to you, our shareholders, for questions. We have all the talent of Fairfax India in the room, including Fairbridge, our on-the-ground team in India, led by Sumit, plus the managers of the businesses we've invested in. So we'll look forward to your questions. Now Howard Marks, a famous successful fixed income investor once said, and I'll paraphrase, when you invest in something, know the circumstances in which you invest. Don't go in with blinders on. Now I've spent 24 years in the investment industry, 13 years running funds. I've analyzed global markets, particularly small and midsized companies and study the successes and failures of market participants. And the wonderful thing about financial markets is everyone has their own interpretation. My background has shaped my point of view on India and its opportunity to make tremendous long-term returns. For our 10th anniversary, and for my first meeting, here's how I believe Fairfax India fits into the broader canvas of India's growth story. When I look at Fairfax India, I see a beautiful painting. And my role is to simply add a frame to highlight the vision of the team who helped create it. So okay, here we go. And just a reminder, all currency numbers are in U.S. dollars. Now before we delve into the past, I thought it was important to show how India compares to a few other major economies today. We chose Canada because that's where we're listed. China, because it's where India is heading. And the U.S., which represents the long-term potential of India. The things to look for are GDP per capita, which is how much money the average person makes per year, look at the size of the populations and the economies and then look at the growth rates. And I'll just mention 2 things about Canada. One thing is we're growing slowly. And two, we only have 40 million people. For reference, every 600 days, 40 million people are born in India. And India has a population of 1.4 billion people. Now Goldman Sachs issued a report predicting India's long-term growth. And I mentioned this not as a precise forecast, but to highlight the country's exceptional potential. They said that in 50 years, so 2075, the U.S., China and India could be $50 trillion economies each. And in that scenario, the U.S., which is at $29 trillion today would roughly double. China's economy at $18 trillion would roughly triple and India's economy at nearly $4 trillion would go up over 12x. Now the momentum of growth of an economy is what's important, and India will be the place in the world to compound capital. Even if India grows at multiples less -- if a couple of multiples less in 50 years. That's an enormous tailwind for the companies in India. As a side note, the highest per capita income city in India is Bengaluru where our flagship holding, our airport, which we'll refer to as BIAL in this presentation, is located. Bengaluru's per capita income is about 70% of China's at $9,000 per year. If the average person in India made what the average person in Bengaluru made, India's GDP would be $13 trillion. However, today's India's GDP is only $4 trillion. So Bengaluru is a good place to have an airport. Now Fairfax Financial, our parent and largest shareholder, created Fairfax India. They predicted that under Prime Minister Modi, India was about to embark on a business-friendly environment and change the country forever. Here's a quote from Fairfax's 2014 annual report referencing Prime Minister Modi as a major change agent for India. We highlighted the most important part. He, Mr. Modi, governed as Chief Minister for 13 years, elected 3 times. Gujarat had real economic growth of over 10% per year during this period. Now a show of hands in the room. Has anyone heard of the 10,000-hour concept by Malcolm Gladwell for mastery, something. Okay. Okay. So most of the room. So Prime Minister Modi, as Chief Minister, we estimate, he worked somewhere between 55,000 to 74,000 hours, anywhere from 5 to 7x the multiple of 10,000 hours needed to master something. And he mastered leading people and growing an economy of 65 million people. And most importantly, Prime Minister Modi governed Gujarat successfully before leading all of India. He's dedicated his life entirely to public service, no wife, no kids. His only focus is on serving the people of India, including his current term as Prime Minister, he's now won elections for 28 consecutive years, truly extraordinary. We'll get to his accomplishments leading India shortly, but I encourage you to listen to the recent Lex Fridman podcast with Prime Minister Modi. You'll see someone with the character you wish led every country. Here, we see in the blue square, India's GDP growth from 2000 until 2027, a couple of years from now. When Prime Minister Modi won his first term in 2014, India was around the eighth largest economy in the world. Today, the momentum from business-friendly reforms has carried India to the fifth largest economy. India is on track to become the third largest economy by 2027, overtaking Germany and Japan having already surpassed the U.K. last year. By many estimates, within the next decade, India's economy will rise from $4 trillion to $10 trillion. In India -- India in 2025 stands at a magical inflection point. It's already the world's fifth largest economy. It's a size where it can handle global capital, but the vast majority of its population remains quite poor. This is an unusual combination, tremendous scale, but low levels of income. That historically sets the stage for extraordinary rates of compounding both from businesses and wealth. So this is India's -- here we go. India's growth these past 12 years comes down to 3 powerful drivers. Digital transformation, economic reforms and an infrastructure build-out, together, forming an unstoppable foundation for India's future. These achievements are profound and importantly, near irreversible unlike in some countries where new leaders undo their predecessors work. Now for the digital transformation, its intent was to bring everyone into the economy, no matter your economic circumstances. Nearly every Indian now has digital IDs through accessible -- which is accessible to their Iris or fingerprint, creating trust in the digital system. Then this ID was then connected to a digital bank account. Now anyone from farmers to roadside tea sellers have the ability to send and receive digital payments, creating a paper trail so they can prove their income to get loans from banks using a feature phone or smartphones. And today, roughly 900 million people receive some form of government subsidy with the ability to receive subsidies directly to their digital bank accounts, it eliminates corrupt middlemen who once took a majority of the funds. Now for economic reforms, we'll just go through a few, but these are the major ones. Demonetization, while it scrapped large currency notes and fighting black money, it dramatically -- what it actually also did is dramatically boosted digital banking. Digital bank accounts soared from 160 million to 280 million in 4 months. Then unified payment interface, which is where the government has digital transactions take place. That went from 100,000 to 2 million in 1 month, 20x after demonetization. And today, digital transactions are bigger than the U.S., China or Europe. GST streamlined, which is a goods and services tax for the country. It streamlined India's fragmented states that were operating almost like individual countries into one unified market. It was a game changer for moving and warehousing goods around the country. Production linked incentives encourage local manufacturing, such as electronics and pharma. The big success has been the local demand for smartphones has almost entirely met now from local production. That's up from 10% just a decade ago. And India exports over $20 billion of smartphones, which was barely any in 2018. Now on an infrastructure build-out, airports increased from 74 to about 157 today over the last 12 years. Total airline passengers have doubled to 250 million. International traffic, the most lucrative airport traffic, has gone up 4x to 84 million. Roads and highways, India now has the second largest road network in the world. And in terms of highways, they've added 60% more than the total highways built in the 66 years since independence. In terms of port capacity, that's up 44%. And to give you what it would be like, it's like adding the entire port capacity of Spain or an Italy in that time period. Railways are now the fourth largest in the world and India has added a dedicated freight corridor. So goods used to share the same rail as passenger and now they have their own, and so they've gone from moving around the country at 25 kilometers an hour to now at 75 to 100 kilometers an hour. The bottom line is the government has invested roughly 3% to 5% of GDP in infrastructure per year. And they're aiming to cut logistics costs from 14% to 8% by 2030, which significantly boost India's competitiveness. Okay. Now on the left side of this chart, this is where India is today. It's 17 years behind China in terms of per capita income. The average Indian is earning $2,700 a year. And today, over 40% of India's workforce is in agriculture, similar to the U.S. in the year 1900. But today, in the U.S., only 2% work in agriculture, they produce far more food because of consolidation of farms and the ability to buy industrialized farm equipment. Now on the right-hand side, we show India is about 4 years away in 2029 from the lowest turning point, and that tends to occur around $4,000 in per capita income. At that point, there's a massive rural to urban migration, and it fuels rapid industrialization and growth. And then by 2041, which is 17 years from now, China might be -- I mean, India might be where China is today. Now here is India's consumer growth story in a nutshell. The middle class is poised to explode. Right now, nearly 1 billion Indians, India 3 on the chart, earn less than $1,500 a year. Now that's a heartbreaking level of poverty. But over the next 10 years, 600 million of them could move into the lower middle and middle class and abject poverty is largely removed from India. From this group's Ascent, the 600 million, consumer demand is expected to almost triple from $2.5 trillion today to $7 trillion around 2035. That's huge expansion for any business targeting domestic consumption and India is a consumption-led economy, just like the U.S. Now India leads major economies and global growth by far. India's real GDP is growing at 6.5%, but not shown on the chart is that it's about 10% in nominal GDP. So with -- and that's factoring in inflation. So on India's $4 trillion base, that's like adding $400 billion to India's GDP next year, equivalent to adding a South Africa or a UAE every single year to the economy. But by 2029, that compounding takes it from adding $400 billion to $600 billion and that's like adding Sweden or Belgium or more than Vietnam or the Philippines every single year. That's the pace that India is scaling at. Now this slide shows India states in dark blue to the European countries -- to similar-sized European countries. Now Maharashtra, that's home to Mumbai. And that's India's largest economy, the state economy. It's $479 billion and that's equivalent to Norway. Karnataka is where BIAL is located, our airport, and that's just above Portugal's GDP. Now if we project these countries growing at the current rates out to 2035, so we're taking liberties here, and we grow India states at India's overall growth rate, here's what we have in 2035. We have 4 Indian states that are now near the $1 trillion mark. And remember, the whole of India's GDP today is only $4 trillion. Maharashtra alone becomes a $1.4 trillion economy, bigger than Turkey, the Netherlands, Switzerland or Poland. And Karnataka is close to $900 billion. As incomes rise, these Indian states will dwarf many established economies. India is well poised to break out of that emerging market bucket, that label. And in the coming years, India will become its own asset class for global allocators of capital. Now looking deeper, these are the top 5 Indian states by GDP, and they're matched with their major EU economies. Now let's add populations. Each Indian state's population is far greater, Maharashtra has 25x the population of Norway. Whoever said Paris is for lovers, have the wrong place. In short, we think Indian states will simply blow through similarly sized European economies. Now for Fairfax India, the investing universe is vast and only getting bigger. Let's compare how the U.S. stock market developed. In 1993, the U.S. had 70 companies that were over $10 billion in market value. 30 years later, the U.S. increased to over 10x that amount. Now India has 114 companies that are over $10 billion in market cap. And in 30 years, they might follow the same trajectory as the U.S., but what's more relevant for Fairfax India is that there's 600 companies, publicly listed companies that are over $1 billion in market cap. We estimate that there's also 200 more that exist in private markets that would be worth $1 billion. Now let's go back to those 600 public companies that are over $1 billion. 5 years from now, that might be 1,000, just 5 years from now. And then, of course, below $1 billion, there are multiples of this many companies in the public and private markets. And we've demonstrated that with investments in Global Aluminium, Jaynix and Maxop. So it's just a staggering pipeline of opportunity for Fairfax India's capital. So here, we try to explain what does it mean when GDP grows. So here's a list of the metrics that grew under Prime Minister Modi's leadership. And we're going to show how GDP unlocks the economic multiplier effect. So growth particularly benefits the financial sector. And 2 of our biggest investments are the IIFL Group of companies and CSB Bank. And they're extremely well positioned. So GDP doubled from 2014 to today. Market cap of the -- so the stock market valuation has quadrupled. And then unique investment accounts have risen 7.5x. They were under 25 million when Fairfax India began. Today, 175 million accounts. And by the way, in 5 years, they think it's going to double again to 350 million accounts. Then in terms of unicorns, which are start-ups that are valued over $1 billion, there's 118 in India and that places India 3rd in the world. China has 244, but China has an economy 5x the size of India. And then in startups, startups have mushroomed from 350 to 150,000. So that's over 400x what it is -- what it was when the new government had started. And the co-founder of Infosys, one of India's biggest IT service companies, projects that by 2035, there might be 1 million startups. Bank accounts tripled to 500 million. And as I mentioned, they're all digitally accessible now. And Internet users have quadrupled to 1 billion. So Lee Kuan Yew, the founder of Singapore, has a quote about China and the U.S., and I believe it speaks to both India's advantages. He said, China will inevitably catch up to the U.S. in absolute GDP, but its creativity may never match America's because its culture does not permit a free exchange and contest of ideas. India has the scale and the freedom and that's why you see so many unicorns and startups even though India's total GDP is 1/5 of China. Now let's talk about our single biggest investment BIAL. Half of India's investment dollars have gone into BIAL. So we thought it deserved a special segment. Hari Marar, Shalini Rao, Rejeesh Rajendran and their team put together an outstanding video and we'd like to share with you right now. [Presentation]

Fantastic film. So we believe we hold BIAL at a conservative valuation and here's why. Let's look at the top 5 airports by passengers in the world. So the top 5, each handle 70 million passengers, but only one Atlanta surpasses 100 million. Now it's not easy to reach 100 million passengers. However, we're in a country of 1.4 billion people in the highest per capita income city and the city is the destination hub for collaboration filled with software engineers. So it's still not easy, but you can envision it for our airport. Then here are some recent global airport transactions. Airports are never exactly comparable, but this might give you a sense of BIAL's long-term potential. Sydney has 39 million annual passengers and was acquired for an enterprise value of $24 billion. Budapest, 15 million annual passengers, is sold for $4.6 billion. Edinburgh, 14 million passengers. And it's sold at $4.5 billion. Here's where BIAL would fit in. With 41 million annual passengers, BIAL generates $302 million in EBITDA, more than Budapest or Edinburgh and is valued less than both of those airports at $3.6 billion. Now incomes are rising faster in Bengaluru where BIAL is located and more than Budapest and Edinburgh. So non-aero spend will increase much faster in BIAL than in similarly valued airports. The international component, meaning high revenue traffic is also rapidly increasing, and we are a hub for 2 airlines, which comprise 90% of the Indian domestic market. These 2 airlines have ordered 1,800 planes, more than double the 800 planes currently serving all of India right now. And BIAL projects to reach 100 million passengers per year by 2040. And I'm willing to bet that Edinburgh and Budapest won't reach 100 million passengers by 2040. And to demonstrate India's long-term potential for a massive increase in tourism, Paris today sees about 17 million international tourists. Hong Kong sees about 20 million. India as a whole country in terms of tourism, only 10 million people. So the upside for BIAL, we think, is enormous. And then looking at the sum of the parts analysis. We call this a discount on a discount. And we tried to make this as simple as possible. The first discount is our 3 largest holdings. BIAL, which is 51% of our invested dollars is a private holding, and we hold it at a conservative valuation at 10x 27 free cash flow. And especially given its long-term potential, we think that's conservative, and we tried to lay that out for you. Then IIFL Group of companies and CSB Bank hold modest public valuations. And the majority of our remaining assets are in private holdings with most of these businesses compounding at double-digit rates and again, modestly valued between 4 to 13x free cash flow. Now of course, you, our shareholders, have to make your own assumptions. Second discount, Fairfax India itself trades below book value, 26%. And then just for perspective, if you just took BIAL, the airport, plus our cash alone, it's worth 96% of the market cap of Fairfax India, meaning you get the rest of our businesses practically free. And that includes CSB Bank and IIFL Group of companies. And Gopal will go through a majority of our investments in detail, so you'll get a better understanding of what we are getting for free. Now you can see our book value per share trend here since inception and our outperformance of the SENSEX. We believe the next 10 years will be more fruitful than the last, thanks to India's reforms, and will continue to positively impact the -- and rapidly -- positively impact and rapidly expand the middle class. We're effectively a growth stock in a growth country. And if you share our long-term view, consider 2 insights from Warren Buffett. First, if you're a long-term investor and the underlying book value of a company is compounding, Warren Buffett, welcome periods when the stock price stays flat or even declines. And why? Because it allows disciplined investors to accumulate more shares at attractive valuations. Right now, as noted, Fairfax India is trading at 26% discount to its book value, offering that very opportunity. Second, Buffett long praised Coca-Cola's share repurchases, which steadily increased Berkshire's ownership stake over time without any additional capital outlay from Berkshire. It's a classic example of how thoughtful buybacks can enhance long-term value for shareholders. Fairfax India has been actively buying its shares, a topic, Gopal will speak to in more detail shortly. With fewer shares outstanding, each Fairfax India shareholder stake increases. It's a dynamic not unlike the Coca-Cola effect at Berkshire, where our shares repurchases quietly, but powerfully compound long-term value. And if you are fellow shareholders, continue to accumulate shares while the stock does the same, that creates what Buffett might call a double win for long-term shareholders. To close, we remain confident that over the next decade and beyond, Fairfax investors will benefit from the powerful tailwinds of India's rising middle class, all while owning a stock that at the moment trades below book value. Of course, nothing is guaranteed in markets, but we believe the odds strongly favor our long-term success. Now a few words on Gopal. As mentioned, Gopal is our CEO of Fairfax India. He has been connected to Fairfax, our parent, since the early '90s. Gopal has been a central figure in the build-out of Fairfax's India strategy over the past 2 decades. Fairfax Financial had a stake in an insurance initiative in India prior to Fairfax India. And Gopal was our CEO -- CIO of that insurance company, Chief Investment Officer. And he did a tremendous job for us there. We exited with a big return for Fairfax Financial, and Gopal then came directly to work at the Fairfax family. Now as Fairfax India CEO, Gopal oversees our portfolio, working closely with Sumit and the Fairbridge team on all major investment decisions. We are fortunate to have Gopal as our CEO, given his expertise and experience having invested through so many cycles in Indian markets. Gopal will now walk you through some of our updates on Fairfax India, including our buybacks and specific investment highlights. Over to you, Gopal. Thank you.

Thank you, Ben, for the kind introduction. It has been an excellent experience working with you ever since this transition over the last 6, 7 months. And I really admire your simplicity, your humility and you being a great listener. And some of these qualities anybody would like to emulate, I would especially like to emulate. Good morning to all of you. I intend to summarize the 2024 performance of Fairfax India as well as the 6 largest investments. Before that, I would like to express my gratitude to Prem and Chandran for their mentorship. Chandran and Prem have practiced the core values that have come to define the Fairfax culture. You would have seen this more in detail in Prem's shareholder letter this year. I want to acknowledge the profound influence these values of decentralization, trust and transparency have had on me and indeed the leadership of the investee companies, many of whom are here today. We will continue to be guided by these values in all that we do in Fairfax India. With that, I'll move on to -- yes, here is a summary of our investments. We have detailed information about each of them in our annual report and the shareholder letter. Our companies are well positioned for growth as evidenced by their strong growth you can see. Especially -- I mean we have given you the 5-year compounded annual growth rate of revenues for each of these companies. You will see specifically 8 of them grew by over 20% compounded annual growth rate. Three of them grew by over 15% annual rate. If they continue to grow at 15%, revenue for these companies will double every 5 years. Those growing by over 20% will double in every 3 to 4 years, while 2 of them are being turned around. Fairfax India existing investments have generated a return of 10% since inception, while the public companies have returned 19% and the private companies have returned 7%. The monetized investments have generated even better returns. The investment exits are driven by being opportunistic as we did in the case of National Stock Exchange and some of our secondary investments, minority investments in the market, are meeting regulatory complaints as we had to do last year in 2024 in the case of CSB Bank. And at times, founders request us for an exit. So we have done that in the case of [ Preview ] Organics or sometimes to create additional liquidity in the marketplace for better investor traction. That's what we did in the case of Fairchem Organics. So cumulatively, we have realized gains of $940 million to date. While we don't like our shares trading at a discount to intrinsic value, we well understand its worth and have been buying back shares, adding value to continuing shareholders in the process. During 2024, we bought 0.6 million shares for $8 million. Since inception, we have bought back 22.6 million shares, representing 14% of the issued capital for $293 million at an average price of $12.98. If you look at this way, it has more than compensated for the dilutive impact of issuing 8.2 million shares to settle the first 2 performance fees. There is no accrual of performance fee in 2024. The total fees incurred cumulatively from inception, including performance fees as a percentage of average cash and investments amount to 1.9% per annum. Fairfax actually [ bears ] all expenses of Fairfax India out of these fees. So therefore, I feel it's fair and reasonable. Our book value has grown from 9.5% to 20.96%, while investments per share has grown from 9.35% to 26.85%. Currently, the net worth is $2.8 billion and over $3.6 billion of total cash and investments and 135 million shares outstanding. In terms of financial strength, Fairfax India is very well positioned with $1.2 billion in cash and public investment securities against total borrowings of $500 million with a leverage ratio of only 18% over common equity and a revolving credit line of $175 million. Now it is time for me to provide a summary of the performance of our 6 largest investments. In addition to the overview covered in this presentation, we have -- our leaders are here, present today, and we'll have an opportunity to directly hear from them during the Q&A session. Bengaluru International Airport Limited, BIAL. First of all, thank you, shareholders, for your approval during the special meeting we held in January. We now own 74% of BIAL with the rest being owned by the government. BIAL is now 51% of our total investment. As you know, airports provide contact-intensive infrastructure services. Under the exceptional leadership of Hari Marar, BIAL is delivering best-in-class services as evidenced by the numerous awards and recognitions they have received on the national as well as global aviation stage. You have already seen this in the terrific video moments ago. It is indeed one of the world's best airports. As noted from the video, BIAL recorded passenger growth of 9.5% in 2024. Notable aspect of this growth is the 21% increase in international passengers, which accounts for 13% of the total passenger volume with a clear focus on further improving this figure over time. During the year, one of India's leading airlines, Air India and BIAL have forged yet transformative partnership to position BIAL as the premier aviation hub in the southern part of India. Indigo, the largest domestic airline with over 55% market share has also chosen to develop Bengaluru as a major location for their international operations. BIAL's cargo operations recorded an all-time high volume and BIAL is the market leader, holding a 28% market share of perishable goods exported from India. Several initiatives have been implemented in the cargo business, including an increase in capacity to approximately 1 million metric tons per annum. BIAL's revenue increased by 46% over the previous year. Aero revenue increased by 39%, while non-aero revenue and other operating income increased by 54% in 2024. EBITDA increased by 57% over the previous year and the profit after tax of $51.4 million increased by 18% over the previous year. BIAL's valuation is largely driven by 3 sources of revenue, aeronautical revenue non-aeronautical revenue and monetization of the 460 acres of land available for real estate development. Aero revenue is determined by the regulatory tariffs that BIAL can charge. The regulator typically sets these tariffs for a 5-year control periods. These tariffs are calculated to yield BIAL, the return on equity of approximately 15% on its regulated asset base. BIAL currently has capacity to handle 50 million passengers, BIAL's growth plans, which will increase its capacity from 50 million to 80 million passengers by 2029 and over 90 million passengers by 2033 have a significant impact on its valuation. This will be achieved by adding a Phase 2 expansion to the second terminal, ongoing refurbishment of Terminal 1 and building a new third terminal. The total cost is approximately $2.5 billion to be funded through internally generated funds and debt. Remarkably, BIAL is the first and currently the only airport to receive a strong AAA domestic credit rating which is excellent in the context of our planned refinancing of the existing debt and financing for future expansion. Second, non-aeronautical revenue, which is revenue from all other sources like lounges, food and beverage sales and duty-free shops grew at a compounded annual rate of 17% from 2009 to 2020, of course, excluding the impact of the pandemic years, it has resumed its strong growth trajectory from 2023 with an objective to increase it by 5x over the next decade, driven by the extra space, attractive surroundings and all the excellent initiatives launched by BIAL. On the real estate front, significant progress has been made in plans to monetize the 460 acres of land available for development. We have shared with you the various initiatives undertaken during the year, which included approximately 94 acres of incremental development, cumulatively covering around 107 acres. This leaves approximately 350 acres available for future development. Valuation of Fairfax India's interest in BIAL increased to $1.63 billion, representing a $32 million increase in 2024, which implies an equity value of approximately $2.55 billion for the entire company. Excluding any cash flow from real estate monetization, this is 10.1x this normalized free cash flow. In 2019, Fairfax India established Anchorage Infrastructure Investment Holdings as its, flagship vehicle for investments in airport and other infrastructure projects in India. We are awaiting approvals to complete Anchorage's IPO, which has taken much longer than we expected. We are excited about the prospects of BIAL and the growth and the potential of the aviation industry in India. Financial services. Moving on to our 3 significant investments in the financial services sector. I would like to begin with CSB Bank. CSB is one of the oldest private sector banks in India. It has over 811 branches and 777 ATMs spread across the country. We own 40% of the bank and our investment attributable to this 40% stake we hold, which was made in 2018 for $136 million, is currently valued around $255 million. In June 2024, Fairfax India sold 9.7% equity interest in CSB Bank for approximately $71 million in gross proceeds to comply with the RBI's dilution requirements. Under the strong leadership of CEO, Pralay Mondal, CSB continues to make excellent progress. It has already assembled a best in industry class professionals management team across its focus areas to build scale, while migrating its core banking system to a more advanced system aimed at enhancing customer experience to match the best in the industry. We outlined in our letter the various regulatory measures by the Central Bank. The Reserve Bank of India aimed at containing perceived excessive risk built up from high credit growth in unsecured retail segment. Monetary policy was tightened across all 3 fronts, policy rates, liquidity and regulatory measures. Regulatory measures resulting in higher risk weightage on the exposure to consumer credit, exposure to nonbanking financial companies on credit card receivables. So the industry grew below its long-term trend with the deposits registering just -- a little over 10% growth and credit at 12% growth, while the credit-to-deposit ratio remained elevated at 79% for the whole banking system. So under the given operating environment, CSB made excellent progress in its key performance measures in 2024. Loan advances increased by 26% and deposits rose by 22%. The yield on advances increased by about 15 basis points. Net interest income grew by 3.6%. Net interest margin decreased from 5.2%, but remained at an industry-leading 4.5%. NIM was also impacted by changes in how banks account for P&L interest income following regulatory guidance on P&L interest. The cost of deposits increased by 90 basis points to 6% and the low-cost CASA ratio declined to 24% of total deposits due to stronger growth in term deposits in the current high interest rate environment. The industry as a whole has been experiencing slower growth in the low-cost deposits typically. So that has been the case. Asset quality is excellent, with gross NPA at 1.6% and net NPA at 60 basis points and provision coverage ratio of close to 82%. Compared to other banks, CSB's performance is among the very best in its peer group. We are very excited about the long-term prospects for CSB. IIFL Finance. We are non-deposit-taking finance company is one of the larger nonbank finance companies in India. It has over 4,850 branches with nearly 38,000 employees and serves more than 4 million customers. We won 15.2% of the company acquired for $101 million, and it is currently valued at $311 million. Under the leadership of its CEO, Nirmal Jain, who is also the founder and a significant shareholder of the IIFL Group companies and his long-term partner, Mr. R. Venkataraman, the IIFL Group has evolved into a leading domestic financial conglomerate. IIFL Finance has consistently grown over the years, largely driven by organic growth. They emerge as a significant player across its key segments: gold loans, housing finance, small business financing and micro finance. It has assets under management of over $8.3 billion, which has grown at a compounded annual growth rate of 15% over the past 5 years despite a considerable period of time where the gold loans were under embargo. As we had announced earlier, the RBI had directed IIFL to stop making new gold loans effective March 4, 2024 until it concluded a special audit and was satisfied with the compliance standards. We are pleased to report that IIFL has complied with all the requirements in close coordination with the regulator and the ban was withdrawn effective September 19, 2024. The market size of gold loans in India is approximately $31 billion with NBFCs holding around 60% market share in the gold loan segment. In the gold loan segment, IIFL held a 15% market share of the NBFC's total gold loan market. The IIFL gold loan AUM was $2.8 billion, which decreased by 54% by the time the ban was lifted due to normal repayments. Gold loans are generally very low duration loans. It is very heartening to note that the portfolio has performed consistently during the embargo period, which reinforces our conviction that IIFL has a good underwriting standard when it comes to gold loans. IIFL is focused on regaining its market position in gold loans, which remains one of its key areas of growth. IIFL Finance has grown organically since its inception without diluting equity capital of the parent company. It's home finance subsidiary, though it raised $275 million from our sovereign fund in 2022, valuing its subsidiary at $1.4 billion then. Following the RBI action to restore the confidence of various stakeholders and more specifically the lenders, your rights issue was announced despite the company being underleveraged and having adequate capital. IIFL successfully completed the rights issue, which was oversubscribed. Fairfax India subscribed to its entitlement, resulting in our exposure to IIFL Finance increasing by around $25 million. IIFL Finance continues to pursue its strategy of growing its business by expanding its assets under management through co-lending practices with other banks or assigning assets to other lenders, primarily banks. This strategy represents about 30% of its AUM. 2024 was a mixed year for IIFL. Its gold loan business was halted for over 6 months and the financial conditions were tight, stemming from a tight monetary policy and tightening of capital adequacy standards we just discussed when we discussed about CSB Bank. We observed a kind of form of moral suasion by the Reserve Bank of India last year, urging banks to reduce their exposure to NBFC sector in general. During the year, IIFL's AUM experienced a decline of 8% over previous year to $8.3 billion. This was mainly due to a decrease in gold loans, 39% decline in gold loans and partially offset by a growth in home loans of 19%. However, IIFL Finance's revenue increased by 5%, while net income decreased by 62% to $90.5 million, resulting in an ROE of 6%. The below average ROE was partially due to the decline in gold loans, a onetime provision of $70.1 million resulting from the restructuring of certain investments and increased capital base following the rights issue on higher-than-normal capital levels at IIFL home finance, which were a result of the capital infusion we discussed. While its asset quality is relatively better than the industry average with gross NPAs at 2.4% and net NPA at 1%, an increase of 70 basis points in gross NPAs and 10 basis points in net NPA during the year, it experienced higher credit cost in certain segments such as micro finance and small business finance done via digital mode. Micro finance as a segment is experiencing higher credit cost for the entire financial system, and IIFL is no exception. IIFL's provision coverage stood at 114% at the end of December 2024 with a well-diversified asset portfolio comprising 98% of assets in retail, a capital adequacy ratio of 22% for the parent IIFL Finance and 46% for the subsidiary home finance and net interest margin of over 8.5%, IIFL Finance is well positioned to capture opportunities unfolding for the NBFC sector. Moving on to IIFL Capital, led by R. Venkatraman. IIFL Capital is a major capital market player offering full-service brokerage, investment banking and distribution of financial products in the Indian financial services market. It has over $29 billion of assets under custody and management. It offers unparalleled research coverage for over 280 companies, serving more than 1,000 institutional clients and over 3 million retail clients. We own 27.3% of IIFL Capital, which we acquired for an investment of $51 million and is now valued at over $323 million. During the year, it has taken significant steps to enter the wealth management services market. The current estimate of the addressable asset pool for the ultra-high net worth and high net worth individuals is approximately $1 trillion in India. IIFL Capital intends to capture its share of this growing market. It has already invested in best-in-class professionals to build scale in this business. Over the last decade, we have witnessed a clear momentum in the deepening of penetration of financial services in India. One of the key attractions for global investors in India is the participation by domestic investors across various financial instruments and their potential. Over 150 million new securities accounts were added, equity cash volumes have grown at an annual rate of 20%, and the number of active clients on the National Stock Exchange has grown at a compounded annual rate of 25% while options and features have grown more significantly. And also, there has been a concomitant growth in the primary capital market activities as well as the penetration of domestic mutual funds and wealth management services. 2024 was another excellent year following what we described in the previous year as its best-ever year. Revenue grew by 40% and net income grew by 83%, generating an ROE of 31%. At a valuation of only 13x earnings and 3.8x book value per share, it is still trading at a discount to its peers while the market has rerated the capital market players. As the Indian capital market continues to grow in stature, currently ranking as the fifth largest in terms of market capitalization, IIFL Capital is one of the top 3 domestic players in the capital market, boasting strong brand equity and a loyal client base. We expect it to remain an excellent investment for us. Seven Islands Shipping. We have 3 investments comprising 7% of our portfolio in transportation, logistics and storage services. I will briefly touch upon the largest of the 3, Seven Islands Shipping, one of our star performers. Founded and led by Capt. Thomas Pinto, it is the second-largest private tanker shipping company in India. We own 48.5% of the company, and our initial investment of $84 million is currently valued at $146 million, in addition to the $36 million in dividends we have received since making this investment. Seven Islands is the market leader in tanker time charter along the Indian Coast with 24% overall market share. In recent years, Seven Islands has made 2 new initiatives. One is setting up a wholly-owned subsidiary in the UAE to charter vessels in the international market. Second, it established a Maritime Training Institute, a not-for-profit undertaking located near Mumbai. The Institute has a record of over 400 graduates with good placements on track. Seven Islands distinguishes itself by managing its fleet acquisition and deployment based on the time charter deployment. Over the past 6 years, time charter revenue averaged 76% of the total charter revenue. It has a great track record of acquiring ships at the right valuation with clear deployment opportunities. Since the time of our acquisition, when it owned 14 vessels to its current fleet of 26 vessels, it has grown with a high level of financial prudence. 2024 was yet another record year for Seven Islands, driven by higher charter rates, increased time charter deployment and a higher average vessel utilization rate at 96%. Its revenue increased by 25%, and its operating EBITDA grew by a similar 22% in line with its revenue growth. Profits grew by a lower percentage as the gain from the ship sales were lower year-over-year. Shareholders' equity grew by 11% to $231 million, generating an ROE of 35% even after the special dividend of $61.6 million, it made in December 2024, of which close to $30 million was received by Fairfax India. Since the time we acquired our interest in Seven Islands, it has generated a free cash flow of $302 million and average annual free cash flow on investment of about 30%. At a carrying valuation of less than 5x earnings and 4x cash flow, we anticipate a significant improvement in the value of this investment. Manufacturing. Manufacturing accounts for approximately 1/6 of the GDP and the Modi government has a vision to increase the manufacturing contribution to close to 25% of the GDP. We have discussed many of these aspects in our shareholder return. Fairfax India has 5 companies, comprising 17% of our portfolio in manufacturing run by excellent founders we are proud to partner with. Let me now move on to Sanmar Chemicals, led by Vijay Sankar, is one of the largest manufacturer of PVC and caustic soda in India and Egypt. We own 42.9% of Sanmar, which was occurred for an investment of $199 million and is currently valued at $201 million. Sanmar had another very difficult year in 2024 due to a prolonged PVC down cycle, severe PVC dumping from China into India impacting the Indian operations, poor demand conditions elsewhere, like the United States, further compounded the situation, incremental capital cost of the capacity expansion in custom manufacturing of chemicals and paste PVC during the year. The global down cycle in PVC coinciding with the foreign exchange crisis in Egypt adversely impacted the TCI, the Egyptian subsidiary's performance. At the consolidated level, Sanmar's revenue for the year fell 3%, and EBITDA of $55.3 million was down 42% and it incurred a loss before tax of $125 million. The government of India has announced an antidumping duty on the import of both specialty and suspension PVC. The rates vary depending upon the source of the product, the origin of the product. Sanmar's suspension PVC capacity of 731,000 tonnes per annum split between India and Egypt is in geographies with huge deficits in and is well positioned to serve the surrounding markets, thanks to its excellent relationships with both the trade and the end users. Indian demand alone is estimated to be around 4 million tonnes per annum matched by only 1.5 million tonnes of capacity within India. Similarly, normalized demand for PVC in Egypt alone exceeds 400,000 tonnes, while the Middle East and Africa region has a deficit of 1.5 million tonnes per annum. The Sanmar group has been supporting its Egyptian businesses, which has enabled it to remain in operation. Additionally, the group has also expanded its presence in high-margin custom-manufactured chemicals by forging strong relationships with the 4 major innovators in agrochemicals. An initial investment of $80 million has already been made and is expected to be a highly profitable business going forward. We are hopeful that business will stabilize in 2025 and turn profitable. Going forward, every ton dollar improvement in PVC, given the capacity of 731,000 metric tonnes, its contribution margin brings $7.3 million towards the recovery of overheads and profitability. So the current fair value at which we carry Sanmar is less than the value of the listed Indian subsidiary, leaving any upside from TCI aside. A significant upside potential from TCI is in the offering as and when the market conditions improve, we expect they eventually will. Fairfax India has investments in several other companies in manufacturing. We have Fairchem Organics, an oleochemical company; Maxop Engineering, an aluminum die-casting and machining company, Jaynix Engineering, an aluminum electrical parts manufacturer; Global Aluminium, a manufacturer of extruded aluminum products, profiles and parts. All of them have demonstrated excellent growth with their revenues compounding at rates between 16% and 26% over the past 5 years. They are on a good growth trajectory with excellent financial discipline. Maxop, Jaynix and Global Aluminium are the most recent additions. All of them are engaged in manufacturing of fast-growing aluminum products with strong growth in both exports and domestic markets. Maxop is benefiting from the global migration to lightweight materials in the automotive sector with products focused on both passenger and commercial vehicles. There a few common attributes of these businesses include their ability to adapt to fluctuating demand, manufacture a variety of complex parts, meet high-quality standards and establish relationships with the global and Indian OEMs and marquee customers. They also engage with their customers from the very early stage of product design, thereby forging a stronger relationship with the customers. We are, of course, monitoring the impact of coming out of President Trump's announcement on April 2 on tariffs. These are early days, and we will see how these tariffs affect our companies and happy to discuss during the Q&A. And the other companies in financial services, we have 5Paisa Capital, a discount broker and a technology-based financial services company, part of the IIFL Group. In logistics and storage, we have NCML, an agriculture warehousing company, and Saurashtra Freight, a container freight station. Most of them are excellent businesses that continue to make good progress. Our annual report provides more detailed information about each of these companies. With that, I will turn the microphone back to Ben. Thank you all. Now we'll invite Mr. Parekh to come over to the podium and...

Prem, Ben, Chandran, Gopal, Sumit, ladies and gentlemen. Thank you, Prem, for persuading me to come from 40 degrees to minus 4 degrees. As they say, there are weeks when decades happen and Make America Great Again and its impact on global markets currently feels like that. How decades have happened in a couple of weeks. Global financial markets have been -- have in the recent period seen extreme exuberance on one side and extreme pessimism on the other. But fortunately, the nature of the capital markets is such that over time, they do tend to self-correct. But certainly, there will be more cycles of global volatility. The U.S. itself faces uncertainty on its own policy on trade, immigration, fiscal policy and regulations. Suffice to say that global resilience is being tested to the hilt. The reality, however, is that no one can currently fully fathom the outcomes that may play out on trade, on tariffs, on retaliated tariffs and bilateral trade agreements. The verdict of the global stock markets have been evident in the bout of sharp sell-offs. It's going to be a phase of several pivots. Against this backdrop, let me endeavor to briefly provide an overview of the Indian economy. Ben has given a detailed presentation on the Indian economy with lots of numbers. I'll try and not repeat any of that. But India's nominal GDP is estimated, as Ben said, $3.9 trillion and continues to be the fastest-growing major economy in the world. A GDP growth rate of 6.5% to 7% as compared to the GDP of the world under 3%, stands testimony of India's continuing strong macros. While India is not shielded from global volatility, India faces a relatively lesser impact compared to other emerging economies. And I'll tell you the reason why. One is that 71% of our GDP in India comes from domestic consumption, both private and government. Second reason is our exports from India are largely services-driven, and they tend to be less cyclical. And India has a low exposure on commodity exports. These are the reasons we believe that the impact on India is going to be lesser than other emerging economies, which are export-oriented and export dominated. We are basically a service exporting nation. The key question is what is India's stance on tariffs. Tariffs do protect homegrown businesses, especially when there's a fear of dumping. As you have seen in Sankar's business -- in Sanmar's business. But tariffs are inherently self-defeating as they raise the cost for companies and they raise the cost for consumers that rely on imports. This is the reason why U.S. consumer and business confidence has plummeted in recent times. And obviously, this had a spillover effect across the globe. India's initial reactions on these tariffs have been pragmatic, fairly mature and constrained. We are amongst the first nations -- countries to commence negotiations with the United States on a trade deal, much, much before the April 2 announcement. Currently, India's focus remains on finalizing our bilateral trade agreement with U.S. Earlier, India had indicated that it was open to reduce the tariffs on around 55% of the goods India imports from the U.S., where the tariffs range between 5% to 30%. Yes, these negotiations are not yet finalized. Commenting on this is akin to shooting in the dark. But bilateral trade between India and U.S. is just 4% of U.S. GDP, just 4%. This is considerably lower than the U.S. bilateral trade, say, with Canada and Mexico, which accounts for 30% and 21% of U.S. GDP, respectively. We have a trade surplus with the U.S. of $46 billion, where we have a $60-odd billion deficit with China. Some reductions of tariffs and nontariff barriers may, in fact, be good for India, which will spur the country to focus on improving competitiveness and will help bring in greater efficiencies. India is also likely to benefit from global value chains shifting from China. One of the strategic sectors is semiconductors, where U.S. has indicated it wants to work with allies and also shift dependence from Taiwan and South Korea as U.S. intends to increase its own share in advanced fab manufacturing. India right now is focusing on low to middle tech manufacturing. So it does not compete but complement U.S.' strategic focus. These initiatives will help India move manufacturing, which is today 17% of GDP to about 25% of GDP in a few years. I'm sure you are aware, often spoken about the structural drivers of India economic growth. We have an ancient country with a young population. 65% of our population today is under the age of 35. This compares well against a growing aging workforce globally. India's IT service exports are estimated to be over $200 billion annually. Second, that one underestimates India's vast availability of natural resources. The country has ample sunlight, which helps for renewables, availability of arable land and ample availability of minerals such as manganese, iron ore, lithium, thorium, amongst others. Third is growing entrepreneurship. Technology and availability of many funding options, be it that the seed funding, there are many options of funding for young entrepreneurs. We have angel funds, we have start-up funds, private equity funds, like Fairfax, private credit, alternate investment, and all are regulated in an environment, which encourages companies to list and do an IPO. Last year, in 2024, India saw more IPOs in volume terms than the U.S. with 337 IPOs garnering about $20 billion. Even this year's IPO pipeline remains strong with some large and marquee IPOs waiting in the wings. Private equity investment also stands at $15 billion. And this is across many sectors, as you have seen Fairfax investment. It varies from digital communication, transport, mobility, financial services, health care, real estate. More importantly, India is being seen favorably by investors for its ease of providing exits to private equity players. I have not heard any private equity players in India complain about difficulty in exits. Tax has to be paid. But if we are willing to pay tax, exits are easy. And last year, there was about 282 exits by private equity players, global private equity players. And the money remitted out was $27 billion. My view is that one is seeing both the government and regulators being significantly more determined to reverse signs of slowdown, which I think are transitory and working to alleviate the same. In the financial budget in 2025, Finance Minister increased the threshold limit of tax, thereby giving the middle class more money to spend on to increase consumption. Food grain production in India is all-time high at 330 million tonnes and retail inflation because of better harvest has come down to 3.6%. With the rural sector picking up against the backdrop of robust agriculture growth, increased government spending and strong boost to tourism, the government expecting the growth to revive, which has slowed down last year. Tax collections have been very buoyant. GST collections have been buoyant year after year. Income tax collections are growing at 20% a year with lower tax rates. Similarly, the GST, which was introduced, are growing rapidly, double digits year-on-year. 100 gigawatts of solar installed capacity has been installed, 100 gigawatts in 1 million households with rooftop solar installations. Demand for housing continues to be healthy, commercial real estate is booming, and so is the market of RIETS, Real Estate Investment Trust. India remains a preferred destination for global capability centers. We've seen 1,500 U.S. companies set up global capability centers in India, 1,500. And this is moving away from the back office call center, which were there earlier. There has been relentless selling by foreign portfolio investors, and I'm sure Fairfax has seen that. And the dollar strength, the months of January and February saw liquidity in the system getting extremely tight. The Reserve Bank has through a series of open market operations, foreign exchange swaps and lowering interest rates have eased the situation. In the first 3 months of this calendar year, $13 billion of equities have been sold by foreign institutions. But all of that has been -- the good news is all of that have been taken up by domestic mutual funds, domestic life insurance companies, insurance companies, pension funds and retail investors. What will distinguish India in the future? India will be watched closely on its intent to focus on deregulation and ease of doing business. These are our main points. And the Central Bank -- we have a new Central Bank Governor -- Reserve Bank of India Governor. He has publicly stated that he is trying his best to improve ease of doing business. Similarly, we have a new Capital Market chairperson, SEBI, we call it the Securities and Exchange Board very recently appointed. He mentioned the same thing that, I want to see more transparency, I want to see increased reaction, approval process from us. And similarly, the Chief Economic Adviser called the central and state governments to get out of the way of private sector. The Finance Minister has also announced a national task force on deregulation. And she has included a number of prominent people on that committee. During the financial year, last year, India got about $62 billion of FDI in key sectors being renewables, communication, semiconductors. Our external relationships have been cordial. And Prime Minister Modi has assured political stability. We have fiscal stability. We have economic stability. And so far as stability is concerned, I think we have never had it so good in major sectors as we see it today. Lower prices of oil helps India tremendously because India buys about 70% of its oil requirements. But we are now sourcing oil from 39 countries globally. So finally, I think I agree with Ben when he said, I continue to remain extremely optimistic about the India's future. And while Fairfax India has completed a decade in India, I'm confident that the next 10 years will be significantly more exciting and significantly more rewarding. Thank you for giving me an opportunity.

Thank you very much, Deepak. He just got in all the way from India yesterday. So we appreciate him coming. Now we're going to open it up to you, our shareholders, for questions. We have 2 mics in the room, one there. Deanna is in charge of that one. And then we have Denise at mic 2. Jeff, Stacy, if you have any questions you want to e-mail, we'll be over there in the corner of the room. And then we have our fourth mic, which is for our Presidents and Directors, if we call upon you to answer a question. You can answer it right here near the podium. Thank you. We'll go to mic 1.

Charles Frischer from Seattle. First of all, I'd like to say that I really appreciate this expanded format that you did this year, expanding the annual meeting more to a sort of investor presentation, and I think it's really appreciated by all the folks here. We just got back. About 20 of us went on the Fairfax India trip. The host and the presentations were spectacular, Sumit, Gopal, [ Kasi ], Manoj, could not have been better host for the people on the trip. So thank you for your support and how much goes on behind the scenes to make that trip work. As we sit here today, Ben, there's a lot of pieces moving in the world, and India seems to be in a very unique situation. You have kind of relations with all different parts of the world. And India seems uniquely qualified and positioned to do well in this kind of mixed up universe that we're in. And we're just thinking about the mark on the airport and the progress that Hari has made there and the valuation. You must have -- I mean, obviously, we just watched the presentation, but you must have a certain amount of inherent confidence in the outlook of both India and Fairfax India. And I know I'm being a bit repetitious to what your presentation was, but maybe you can expand on a little bit more.

Well, yes, India is in a unique position because it gets along with -- Ray Dalio talks about this, right, where -- when there's a rising power, challenging an existing power, the country that does best is one that gets along with both sides. And India gets along with both China and -- to some extent, to China and also in the BRICS, because they have their own summit. So it gets along with China there and then also with the U.S. here. One thing that when Prime Minister Modi came to meet with President Trump in February, they discussed something called Mission 500. So Deepak talked about that there was $130 billion in bilateral trade. Mission 500 is by the year 2030, they want to have $500 billion in bilateral trade. And there is no other country in the world that can get to that level, hundreds of billions, triple their trade with the U.S. during mostly President Trump's term. So I think they are looked at very favorably in their environment. So I think India is in a very good position to benefit from that relationship. Then also China Plus One. If you look at -- India has probably got one of the lowest tariff rates in all of Asia. So actually, Apple has just announced that they're going to try to -- they're doing about 25 million of their iPhones are being produced in India in 2025. And that's about -- iPhone is about half of Apple's revenue, right? So the iPhones shipping from China are more expensive now, much more expensive. And if they're hit with an additional 50%, that's 104%, it's going to add a lot to an iPhone. So manufacturing in India is a big advantage. So like China Plus One strategy, this accelerates it. We saw it in the first Trump presidency, where there was more of an urgency to build that dual supply chain. And I think -- and the Biden administration kept those tariffs in on China. And so this will accelerate it more. So we think India is in a very good position here. In terms of the airport, we showed you what was going on there in terms of the growth to get to 100 million. And perhaps, we can have Hari update because to get to 100 million, if you look at the Atlanta airport when it got to 105 million, from 40 million to 100 million, that was 38 years. And Hari is planning to do it in 15. And you need operational excellence to do it that quickly. So I think it would be great to hear maybe from Hari to give us an update, maybe on how the airport is doing. And then what does it take to get from 8 million to 40 million passengers and then 40 million to 100 million, maybe that story might be good as well for Charles to hear. And also thank you for your comments on the trip because it is a lot of planning, and we appreciate that you took the time to go on it as well.

Thank you, Ben, and good morning, ladies and gentlemen. It's a pleasure to be here, as usual, every year at this time. Ben, thank you for that brilliant presentation on the India growth story and Mr. Parekh yours as well because that really sets the tone for everything that we're talking about in the airport because airports are reflective of the economy itself. And what you really see in the economy is what you see in the airport, and airports are known to be barometers of the economy. Airports or aviation in general and the economy have a symbiotic relationship. So the better the economy does, the more aviation grows. And as aviation grows, it has a huge multiplier effect on the economy as well. Every dollar invested in aviation has a 6.5x impact on the economy. In the first 10 years of the existence of Bangalore airport, the impact it has had on the economy is stunning. In 2019, we commissioned a study by the National Council of Applied Economic Research just to look at the kind of economic impact Bangalore has had on -- the airport has had on the Bangalore region. And just in terms of gross economic value added, Bangalore airport has impacted the economy by $10 billion a year. That's the economic impact on the airport. And from an employment standpoint, direct, indirect induced impact is a little over 300,000 jobs that it has created since inception, which is a very powerful tail. And of course, for all the reasons that you and Mr. Parekh laid out about the kind of economic activity that's happening in India, combined with the unique demographics that we have in India of a youthful population, specifically the nature of economic activity that's happening in Bangalore, which is the capital of the knowledge economy, which means that it has a very, very large -- the largest share of urban migrant labor is in Bangalore. All of this leads to a large amount of aviation travel, youngsters earning a lot of money, higher disposable income, seeking experiences, seeking travel experiences, going back home, at least twice a year, all of that leads to a huge amount of travel. And that's the background on the basis of which Bangalore airport continues to be amongst the fastest-growing airports in the country. So we touched 40.7 million last calendar year and 41.88 million for the financial year that ended in FY '25. And we're expected to continue this growth trajectory over the next few years. So while we'll touch 100 million in 15 years, the more challenging part is that we'll actually touch 80 million in the next 7 years. Now that is even more difficult because once you touch 80 million, growth will tend to slow down and that will give you a better possibility to cater to that growth between 80 million and 100 million. But from 40 million to 80 million, doubling of volumes in the next 7 years is going to be, I think, the bigger challenge that we face. And how do we propose to do that? I mean there are 3 or 4 things that we are doing to enable us. And really, I think this is a question that keeps us alive -- awake, sorry, alive. This is a question that keeps us awake literally on a daily basis, me and my team, this is what we are discussing all the time. How do we make sure that we prepared because this is not just growth in scale, but it's also tremendous growth in complexity because the number of moving parts at an airport, the number of vehicles, the number of people, as it grows in that 4000-acre campus, it leads to a higher degree of complexity. And the kind of people that we have in our teams today are not ready to face this kind of complexity. They're not trained to handle this kind of complexity. So there are 3, 4 things that we're doing right now. First of all, add physical capacity. We need to create the capacity to enable this growth. So in October 2023, we completed a $1.7 billion expansion program, which added Terminal 2, which everyone has been talking about, but also a second runway and many of the associated other infrastructure that is required to cater to this growth. And in February 2024, 6 months later, we were asking the Board for approval for another round of expansion capital program, $2.2 billion. This time to create capacity that's coming up with all these aircrafts on order that you referred to in your speech and Gopal referred to as well. So there is a big expansion program coming up right now. This $2.2 billion is going to be spent on expanding Terminal 2 that we've built just now, the second half of it. So we've built only half of Terminal 2. Phase 2 of Terminal 2 is coming up. So roughly about $600 million will be spent on Phase 2 of Terminal 2. We have 2 very large infrastructure projects. One is an underground tunnel that brings in traffic from the eastern side of the city into the airport, which is passing underneath aircraft parking stands and taxiways and bringing them into the terminal forecourt, plus a massive cross-field taxi way that connects the 2 runways at the other end. We are connected only at the eastern end right now. A western crossfield taxiway enables full circularity on the air side, improving efficiencies, improving aircraft turnaround times, improving, of course, the shorter taxing times as well at the airport. These 2 projects will take up another $600 million to $700 million. We are building 2 metro stations. We're refurbishing the existing terminal, Terminal 1. Almost 50% of that project is already through. We've awarded contracts close to $0.5 billion already, and the rest will be spent in the next 4 years. So very, very aggressive. This kind of a project in any other part of the world would have taken anywhere between 10 and 12 years to build out. We're aiming to do that in the next 4 years. So a large, large capital project coming up. So that's just creation of physical capacity. The other important challenge is the people challenge, and the people challenge we are trying to address through 3 ways. One, I think talent availability is going to be a big problem in India. We're already seeing a bankruptcy of talent in India. The quality of people available at this point of time is not up to the challenge that is coming up or the kind of complexity that's coming up. So we're trying over the next few years to focus on hiring the best possible talent that's there in the Indian market. And we've been successful so far. We've got a fantastic team. I'm very proud of the high-quality team that we have at Bangalore Airport. Some of you have met many of our senior team leaders, but we need several more, especially if you have the ambition of operating more airports, we need even more people. And we are bidding for privatization of airports this year. And if we acquire more airports, we need several more CEOs and senior leaders in those positions. So hiring of high-quality talent. Secondly, I think the existing teams need to be upskilled and their skill levels need to be significantly improved. So we've got 2 massive transformational programs that are going on right now, fit for future and fit for purpose. These 2 programs are actually looking at what are the skill sets that are required for operating a complex airport environment 10 years from now or 7 years from now, identifying those skills and embedding those skills in these teams as we speak right now. And of course, retaining those people in the next 7 years because we don't want them to leave. So embedding them with future skills and retaining those people is part 2 of the people challenge. And Part 3, of course, none of this is -- we can't pull this off unless we have a high-quality culture, a culture that believes in collaboration, partnership, trust, integrity and all of that. So the next 2 years, we put together a program that is meant to make sure that our culture becomes that much more stronger that we are able to handle the growth that's coming up. Third piece of the preparatory works that we're doing to handle this 40 million to 80 million challenge is to simplify and make our internal processes that much more efficient. Being in the technology capital of the country, we are blessed because we've got the best brains in the field. So we're embedding a lot of technology. We've got 4 platforms that are enabling the digital transformation of our company. I've spoken of this in the past, but the latest one in this is use of AI and GenAI in businesses. So things like digital finance, I think our finance is completely getting automated and digitized, legal, procurement, all of these are getting powered by digital solutions, including AI and GenAI. This is helping to transform the business to a point where many of these activities get automated. For instance, a regulatory filing once in 5 years takes a hell of a lot of work to put together. But now, of course, with the kind of tool that we are developing, which is state-of-the-art GenAI enabled regulatory tool. Literally, it's a click of a button because it's integrated with almost every single digital platform that we have in the business. So with the click of the button, we should be able to generate a multiyear tariff proposal. These are some of the things that we're doing to simplify the internal processes in the business. And last but not the least, when you're embarking on such a large expansion program, we saw when COVID happened, COVID happened exactly as we started the construction of Terminal 2. We have to be prepared for such black swan events. So maintaining fiscal prudence, maintaining a healthy cash balance, making sure that we are running the business in a responsible fashion is a very important part of this. So we've sort of refinancing of our loan right now in getting a 7-year moratorium on repayment is a big part of that plan that makes sure that we don't have stress as far as money is concerned as we grow over the next 7 years. So I think these are the 4 pillars along which we are hoping that this will sort of enable this move from 40 million to 80 million. And I think that sort of encapsulates everything that we're doing.

Congratulations, Ben, for your new role and fantastic format. So my question is Fairfax India clearly right now trades at a significant discount. You also talked about it in your presentation. What are some of the things that we can do? I know you're buying back a lot of stock, which is great. You're organizing India trip, which is great. But what else in your mind are some of the opportunities you have to close the gap between where the value at which Fairfax India trades versus where the value which you would reflect, which is the NAV, and even that does not reflect the Bangalore International Airport value that we talked about. So what are some of the tools or things that you're thinking of that will help us unlock some of the value that exists in the stock price?

Well, right now, 72% of the assets are private. So they're sort of fixed at their level. So that -- when we explored the Anchorage idea, that would have taken us from 36% to 80-something percent in terms of public assets. So the price discovery would have been in the market rather than us taking the value up on private assets. So that's one thing that we've explored, but that might be an opportunity actually for Sumit to give us an update on what's going on with Anchorage actually. But that's one of the big things. Buybacks are, of course, as we showcase one of the strong things that we can do when it's a discount to book as you indicated.

Thank you, Ben. This is one question I didn't want to answer. But thank you for putting me on spot. So thank you for your question. And I remember we talking outside about Anchorage as well. So interesting part is it is taking unusually long time to get this approval, and we'll come into that. We did not expect this level of complexity going through the bureaucracy of India. Usually, bureaucracy is much more receptive across all our work. They are very supportive and multiple times, both Ben, Gopal and Deepak also referred that governments are getting out of the way of private sector. But for some reason, we are taking time. Now to give you a very simple idea about where we are in the process, in India, holding companies owned by foreign owners gets into a complicated area, okay? And given the size of Bangalore Airport as an underlying asset, thereby size of Anchorage. And the nature of the asset, which is airport, which is generally a monopolistic asset and asset of national importance in some sense, is kind of adding to the complexity over there. Now for many of these reasons, the approval for IPO of Anchorage has to come from something called a Cabinet Committee of Economic Affairs, which is the apex committee of the country. And for this particular -- I mean, this committee is headed by Prime Minister himself. And the other constituents of this particular committee of Finance Ministry, Defense Ministry, Home Ministry, et cetera. And in the priority of various -- I mean, in their list of priorities, they have national defense as an idea, tariffs for example, geopolitics, internal politics, internal disturbances or opportunities and amongst all of this, we have something called IPO of Anchorage. So it's getting that much of importance. That's the honest answer, I would say. Nobody even once has said that there is a problem and won't happen. But in the given priority order, we are fairly low there. So at some point in time, we'll get up there, but it will take a little time. That's an honest answer.

Thanks, Sumit. And I'd just say like our businesses, 11 of the 13 like Gopal pointed out, are compounding at 15% plus for the last 5 years. If you're a long-term shareholder, this is the chance to keep accumulating before the market discovers that it's trading at a discount to book. That would be my addition as well. Jeff, why don't we go to you and if there's any questions online?

Yes, a further follow-up on BIAL, the Karnataka government has formally proposed 3 potential sites for a second International Airport near Bengaluru, BIAL and the government have an exclusive 150-kilometer radius in their agreements about the BIAL airport. Has the airport been involved in these discussions for another airport and what are the remedies that Fairfax India would receive if an airport is built within that radius?

Thank you for the question. So what they're referring to, I think, is that they're trying to build a second airport, but we have exclusivity until, I think, 2033. Is that right? Yes, 2033. So -- by that time, like Hari was saying, we might be through 80 million passengers at that time. So we might want that second airport because we want to keep the higher revenue traffic within BIAL and then offload the other traffic to the second airport because we'll be bursting at the seams. I don't know if -- Hari, do you want to expand on that? Sure.

Yes, there's been a lot of news around the second airport in Bangalore. And added to that is also there's been this conversation about the old HAL Airport being revived. So there's a -- so a whole lot of this conversation that's been going on in the press. So maybe I can just throw some light on that. First and foremost, I think we're fully involved in the discussions, we're with the state government, we are very close partners with the state government, and therefore, the state government trusts us and involves us in all these discussions. So like you rightly pointed out Ben our exclusivity is still 2033. By then, we will be at about 85 million. At that stage, what one must remember is that all the peak hours would be full. And it's really between 85 million and 15 million. That growth is coming from filling up the valleys, right? And the city is already choking at that point of time because there's need for further capacity. And that capacity is going to come only with the second airport. So we're aiding the government. We were involved in the selection of those 3 sites. We've recommended our favorite out of those 3 sites because we believe that one works best. Of course, it's for the central government to decide what's going to happen. At all points of time in this discussion, what we're trying to do is protect our interest. At no point will we allow our interest to be diluted. HAL Airport too, if -- it has to be reopened, our stance has been that we will operate HAL Airport. But as far as HAL Airport is concerned, we have the right till 2038 because that's actually till the end of the first concession period, which is the 30-year concession period. So we have the right till 2038, which is 13 years from now. But the 150-kilometer exclusivity ends in 2033. So we continue to engage very closely with the government, and we'll ensure that at the end of it, whatever the outcome is positive for us.

Thank you, Hari. Now we'll go back to mic #1, where Dana is.

Ben and Gopal, thank you so much for having us, and it's wonderful to come back here every year. And congratulations on your new role this year. And my name is [ Gobinath ], I come from Washington, D.C. long term shareholder of Fairfax India and Fairfax. My question is 2 different areas and maybe simpler ones than the previous questions, I guess. The first one is the second largest investment for Fairfax India other than the airport is banking and finance, mostly on the lending side. What is the prime risk that you're concerned and watchful for? And the second question is, among the private company valuations that you guys are carrying certain businesses, for example, Seven Islands Shipping is you carried at like 4x free cash flow versus airport is carried at, let's say, 12x EBITDA. What kind of leeway do you guys have to carry these? And what limits that you may impose on them over time?

Thank you for the question. So on finance, actually, we have Pralay here. And Pralay has got 30 years of banking experience, and he's at CSB Bank. And the bank is over 100 years old now. And Pralay was the Head of Retail Banking at a large bank as well that was over $40 billion, and he's had 12 years of experience at HDFC. I think he'd be good to give some perspective of why we're very interested in banking, and why he left his role at a large bank and joined the opportunity at CSB. I think that would be interesting for you to hear. And then he could also probably expand on anything he's concerned on right now as well in the banking sector. And then we can -- we'll take the Seven Islands question after and valuation.

Good morning, everybody, and privileged to be here, and thank you for the question. On the question, Ben, what you asked is, yes, I've been a part of very large journeys, whether it's 12 years in HDFC bank and large time in another mid sector and then another large sector, but the reason of me joining the Fairfax promoted company, CSB, was this is not the first time with all humility I can say that I have done it 2 times before. It may sound bizarre as it is. But when I had joined HDFC bank, I had joined from a foreign bank, and I was getting international posting, and I was told that you must be mad to join a bank which is, late '90s, that time HDFC Bank. I wonder what I would tell him when we say that, that bank is now one of the largest banks in the world. The second example also, again, which is 10x bigger than us at this point of time. And that bank was much smaller in retail, what I was handling the time vis-a-vis what we already are. So I think it's a question of perspective. It's a question of what we want to do. And this question was asked to me by a London investor when I was in my previous organization. So I said that there are 2 kinds of people. One is you want to build something, you want to run something. And from that perspective, and the third is you want to turn around something. So in this company, we had 2 opportunities. One is building something and turning around the company. And third, of course, the scaling will happen if we do all the right things. On that front, before I talk about the risk point which you just talked about because banking is all about taking risk, and managing risk. So there are 3, 4 things which we are doing in the CSB at this point of time. I explained last year that SBS 2030, sustain, build, scale; 3 phases we divided what we're going to do. The good part is sustain part is over, the build part is almost getting over. As we're talking, we are doing the technology transformation, our partners, whether it is Oracle or Deloitte and many other partners. They actually cautioned saying that, are you sure you want to do all of it together, and this is a big risk, and no bank has done it before. So we said that not doing it is a bigger risk because we have a limited time of the next 4, 5 years, within which we had to scale the bank to a very different league to the mid sector. And the good news is that as we are talking, we are actually transitioning our core system, the entire surround system, the entire digital system, everything around it. So when you asked the question of risk, it's just not credit risk, execution risk, process risk, technology risk, all of that. So we are building the bank on 5 pillars at this point of time. One is, of course, governance. And with Fairfax promoted company, we don't question that. Number two is the culture, which Hari also talked about, that's very, very important when we want to build a long-term vision for an institution, people, culture, human capital, all of this is important, and we are building that. The third part, of course, is technology, which I talked about and simplest way of saying what we are doing in the bank is whatever we will have in this bank 1 year from now, nothing was in the bank 3 years back. Okay, in terms of technology. And we are ahead of the curve just because we are taking the latest and the best whether it's Oracle, whether OBDS it's platform, whether it's the database, everything will be the latest and our size is called small, so leveraging that will be that much easier. So from that perspective, we are building for the next 10 years and beyond. The fourth, of course, is customers because one of ex bosses, Deepak, is sitting here. I mean, he has been a mentor to all of us in HDFC. One of my ex-senior colleagues, [ Paresh ], is also somewhere here, I'm sure. So I've learned from and my ex-boss Aditya Puri, he used to say that you cannot build a bank without customers. So that's the fourth pillar, which is how to acquire and how to get customers in the bank, which we don't have today enough. But we want to build and for that, you need product, process, service and customer service, then the ecosystem, the entire things put together. So all of that we are building and that requires technology in today's world. So that's the fourth pillar and the fifth, of course, is compliance and globally and not only in India, compliance has become a very important, while it is independent function, but I myself is very much involved into this. So across these 5 pillars, we are building, and hopefully, this will remain our vision for the next decades to come because these are the 5 pillars which will not go away. So that's where we are. The bank has grown as we saw. As we talked, we just finished our quarter, last quarter, we grew by 30% when the system has grown by 11% on the asset side. And hopefully, we'll be able to sustain that because post -- the real journey of the bank will start from next year once the technology piece is in place. So that's about CSB. My colleague, [ Narendra Dixit ], is sitting there. And I just say that the prosperity -- we have brought prosperity because those [ diyas ] which you see there actually is something which we worship, and we believe that this is the road to prosperity. So with that core system being in place this year, we believe that we are on the road to prosperity going ahead in the bank, and I would encourage some of you to carry some of our brochures and the prosperity, which is there in the goody bag out there home. It's a beautiful thing to have. Coming to your question now specifically on risk, yes, I mean, there are various risks, right? You have liquidity risk, which you saw in the last quarter, last 6 months. And today was the RBI announcement, RBI has been doing a lot of work in the last few weeks or months in terms of managing liquidity. And the good news is the liquidity in the positive domain right now. We had a repo rate cut today morning, India time, and there is a positive commentary on the inflation, which is within the RBI kind of comfort. So from that perspective, I think that part, we should be able to manage as a country. Coming to credit risk, I think a little bit on the unsecured micro finance, there's a little bit of a risk that is evolving. But the bigger piece, which happened post GFC and until 2012, 2013, and that carried along in some of the larger banks, especially on the PSU side, was on the corporate side, right? I think that deleverage has happened out there. So from a systemic side, while there are some risks emerging a little bit on the retail side, unsecured microfinance and some of this, but that's very transient risk in my view. There are much better systems and capabilities right now, governance, regulatory processes by which those risks are capped to a great extent. Having said that brings to the third risk, which is there in the banking system, and it's I think across the globe, not only banking across -- there is the cybersecurity risk. So from that perspective, the inter investment -- a lot of investments are going into cybersecurity to manage those kind of risks in the banking. And that's a largest, because it's a systemic risk. And fourth, of course, is ensuring the overall governance risk because, however, rudimentary it look sounds, that's the biggest risk because if there are governance risk, which leads to, what should I say, the regulation risk of institutions. And banking is a business of trust. When I was in HDFC, I used to see this, that trust is the top most thing in terms of when it comes to brand of any bank. And that is something which is also a big risk. So when you look at all of this together, I think eventually, the governance and the Board direction and how the management operates decides how the bank will be long term and how do you manage this risk on that front. So that's in a nutshell where we are. We are very, very encouraged and very, very excited. The entire team is very excited because while we grew by 30% last quarter on a year-on-year basis, and as you saw in the presentation, we grew by 25% on the calendar year, but I think our journey is just beginning. And with the technology transformation, which is happening this year, we have the best people as we can think in the organization. Everybody has come with a vision, with a dream. I think it's just a question of time we'll execute what you saw in the 3 other banks where I had worked before. Thank you very much for this opportunity.

Thank you, Pralay. And then on the Seven Islands leeway with the valuation, actually, Gopal just wanted to address that.

Before I go there just to complete, I mean, Pralay about the bank. When it comes to finance -- I mean, other finance company also, we have IIFL Finance. So our general message to the management is, I mean being very prudent in lending and manage -- I mean, take risk, but understand the risk and manage the risk very well. On the other side, in order to gain a better competitive advantage, one has to focus on the cost of funds. So how do you drive the cost of funds? Everything, it all revolves back to the -- how you manage your risk, how you -- all your practices, processes that you adopt over time. That is what determines it. So for example, our IIFL Finance, a few years back, they used to be a domestic AA-. They migrated to AA and they were in the verge of getting upgraded to AA+, but then, of course, this gold loan related stuff happened, so they are stuck at AA. So our messaging is pretty much -- lower the cost of funds, you have a better ability to lend to the best quality borrowers, that is on the finance side. And your other question was about the Seven Islands and other private investments that we have, the smaller companies you are saying. In case of Seven Islands, you have seen, it's a great cash generating company and in fact, whenever we don't find appropriate -- like, for example, right now, they didn't find appropriate to deploy in more ships at these elevated valuations. So therefore, there was a huge dividend payout. In the month of December itself, we got about $30 million from -- so depending upon -- they are strong cash-generating businesses. So we'll weigh on -- depending upon the opportunities that comes on the business side, either it will get deployed in their growth opportunities of what they see or it will get dividend out. And some of the other companies, they are growing well. We don't want them to be right now listed. There is an opportunity maybe at some point in time, some of those companies can get publicly floated. But for now, I think we'd rather let the management bandwidth be more focused on driving the business to a sizable -- so that it can be great value unlocking potential going forward.

Denise, mic 2.

Good morning, Ben and Gopal. Thanks very much for the excellent presentation. My question is around future opportunities. In the past, management has spoken about opportunities in the future privatization of government-owned assets. Are you still seeing this as a potential future opportunity for Fairfax India? And if so, what's the company doing to make sure it's best positioned to take advantage of these sorts of opportunities?

I think you have seen -- last time when they were privatizing the airports, we also participated, but we participate with discipline, and we were outbid by more than -- I don't want to say by what number, but substantially outbid. It didn't make any sense for us to bid at those valuations. Government has been talking about many privatizations, infrastructure assets, more airports, another 12 or 13 airports are likely to come up now. So we are evaluating, I mean, whatever that comes up. But the infrastructure divestment, especially when it comes to roads and other assets, they have been a little slow. I mean, they've been saying. Because so far, I think the budget has been -- I mean allowing them to spend out of budget for the infrastructure. But now as things are changing politically, we are seeing some kind of tuning of more and more social spending, like one of the -- recently, there was a news that one of the state government ran out of funds to even pay their salaries because of the increase in the social spending. So therefore, we have always seen governments when they are pushed to a corner and when there is a crisis, then the response is far more. So I'm sure with the way the direction in which we are going, I think you will see more assets getting divested, and therefore, there will be a lot more opportunities for us. And especially with this given global volatile environment, I feel the opportunities will be even more. So we will weigh all the options and we'll respond to -- but we stick to our discipline, I mean, if it's going to be outbid, let it be. No problems. Because the way we got BIAL itself, it was not -- it wasn't that 2007 or '08 when all those airports were privatized. We got it when subsequently when the bidders who won those airports, those days, they ran into trouble. That's the time we went in and bought it. So our approach will be very disciplined and...

Jeff, do we have any questions from online?

Yes, we have a 2-part question about IIFL. So the first one on IIFL Finance and then a second question on IIFL Capital. So the first one on IIFL Finance. Has the recent gold loan investigation by the RBI hurt the long-term momentum or reputation of IIFL financing in any way?

So we're fortunate enough to have Venkat here from IIFL. He's one of the key people at the company. Nirmal is the other key person, but was not able to make it today. But Venkat has been with IIFL Finance since 1999. And so maybe Venkat, you could just provide an answer on that investigation? And then also maybe just a little bit of an update on where you stand today?

Yes. Thank you, Ben and Gopal, and thank you, everybody. It's good to be here. Thank you, Prem and Chandan for your continued support. Our relationship goes back almost 15 years. Thank you for everything. Coming to the specific question on gold loans. And Gopal spoke about it in his presentation. On March of 2024, RBI banned us from booking new business and for almost 4, 5 months, we work very closely with the Reserve Bank of India. And we shared a lot of data with them and reworked and rejigged all our processes. There was also a special audit done by them. And in September, we are allowed to restart our gold loan business. The good thing about this entire embargo was that the book actually fell down from almost $3 billion to close to $1.25 billion in the 6 months of the ban. But subsequently, after the ban was lifted, we have been able to recoup all -- most of the lost book. And it shows that our brand with the customers was intact. Most of the customers came back to us, all the branches started re-getting all the loans back. And as we speak, our book has now regrown. And although it has not reached the peak of March 31, 2024, but it's almost reaching there. The book is now close to almost $2.25 billion, and that shows that our brand as well as our customer acquisition engine is intact. And I think with God's grace and your blessings and support, we'll soon overtake the past numbers. And just quick talk about IIFL Finance. As you know, in the last 3 years or 4 years, the entire organization has been very focused on retail side of the business. We have a very strong position in gold loans, and the average ticket size of the gold loan is about $1,000. And in spite of the ban, in spite of the embargo, we have been able to quickly get back our competitive position and the book is showing upward growth momentum back. In housing finance, which is, again, a significant portion of our book. We are a significant player in the affordable housing segment. And this is one of the objectives of the Prime Minister housing for all -- Prime Minister Awas Yojana. And there, the average ticket size will be close to about $20,000. We are present in this Tier 2, Tier 3 or the suburbs of metros. And Mr. Parikh is there, who's the [ don ] of the Indian housing finance sector. So we do not compete with him because he's obviously he's in the superior segment. We cater to this Tier 2, Tier 3 suburbs or big locations to, I would say, in the so-called not prime segment. We also have a business loan, which we -- the average ticket size is about $4,000, $5,000. Again, we provide both secured as well as unsecured credit to business, primarily targeted working capital and acquisition of small machines. 50% of the book is secured because we give loan against property for business. And we have a micro finance business, and that business was at about $2 billion, but in the last 1 year, the book has de-grown because of this entire stress phase in the industry. This is unsecured loans to the bottom of the pyramid. And we think that the last 2, 3 quarters, this entire segment had some stress because of repayment issues. We think the sector is slowly getting out of the problems. And maybe this quarter, we'll see the worst of this asset quality issues. And from next quarter onwards, we'll see growth momentum back. So all in all, I think Ben spoke about the growth potential in the Indian financial services sector. Mr. Parekh also talked about the growth potential in the sector. We think that the entire sector, given the low credit penetration in the economy has significant headroom for growth. And given the fact that we are retail oriented, we have significant distribution infrastructure all across the country and -- the fact that we leverage technology a lot. We have taken full benefit of this entire India tech stack with be it Aadhar or be it the credit rating or be it digital payments. And we are well positioned to actually benefit from the entire growth momentum. And long-term potential is very good. There might be short-term problems given the fact that last 1 year, the regulator has been looking at the unsecured book very closely. There has been a lot of, I would say, challenges, not only company specific but also the sector-specific, but we think there are short-term blips in the long-term growth story.

Thanks, Venkat. And Jeff, you said there was a question on IIFL Capital now.

So the second part of the IIFL question is, does the current robust business environment for securities trading and investment banking show any signs of cooling or slowing down? And what would be the impact on IIFL capital?

Perfect. You know what, Venkat, why don't we -- we've got [indiscernible] here. So why don't we have [indiscernible] give us maybe a capital markets update, what you're seeing IPOs and a little bit of color on the market [indiscernible]. But thank you -- thank you, Venkat.

Okay. Actually, last 4 years, particularly the last 18, 24 months have been serial actually. There are weeks where we launched 3 IPOs and it's never happened in the past. So to assume that kind of a cyclical uplift that we saw will sustain given the change in the environment that we are seeing I think may be a difficult one in the next 12 months or so. But one thing I can tell you what Ben and Gopal alluded to in terms of the long-term trajectory of this business. I remember in my 30 years, I've seen the Asian crisis, then the tech bust than the 2008 crisis. And in between, we had the 2013 crisis, all through what we have seen is that the long-term market opportunity continues to expand significantly. And so over time, Indian capital market volumes have grown significantly. The investment banking pie has grown significantly. And what we are also trying to do is that we are adding new business lines to ensure that the cyclicality of the business, the transactional share of the business keeps coming down. You would have seen that we've recently started the wealth management business, both on the ultra HNI and more importantly, on the mass affluent side, we've already hired a very large team. Gopal mentioned about the wealth opportunity being about $1 trillion. And we are very, very confident. I still distinctly remember in 2008, 2009, with just a few million dollars, we started the [ 361 ] business. And today, that business commands a market cap of close to $4 billion. And we are very confident that we will be able to build a very large wealth management business, given the kind of track record and credibility we have. So yes, the short answer is that next 12 months doesn't look as good as it was in the last 2 years or so, growth may slow down. But I'm very confident that we are very conservative in terms of our capital deployment. Even in the worst of the times, we have generated 18%, 19% ROE. And last year, we generated close to 35% ROE. So we don't need capital to grow. It's a highly cash flow generating business. So we are on a strong wicket, and we continue to -- our focus will continue to remain -- create value over the long term.

Thank you, [indiscernible]. I see 2 people standing at mic 1, and though they're the only people in the room, and I guess we'll give -- we only have time for probably those 2 questions. So let's just use mic 1 and address those 2 questions.

My name is [indiscernible]. I'm with Edward Jones. My first question is related to potential opportunities to deploy capital, either in the private or public markets. The second part of my question is relates to sources of capital. Is there any -- looking at what you did with Helios, what's done with Helios right now in terms of raising a fund to deploy capital domestically in Africa? Is there any opportunities that you see for yourself where you can set up some type of GP LP structure, bring on perhaps some of your institutional relationships as LPs or even domestic India given your banking relationships that have distribution to perhaps use that generate some fee income and also deploy in a bigger amount to have a greater capital base to deploy into new opportunities. That's my question.

So I think we'll bring up -- for deploying more capital. Maybe Sumit can give some ideas of what's on the ground. I just say on raising a third-party vehicle, when -- if there's opportunity, the money will be there. And so if we see it, we're going to take advantage of any opportunity we see in markets. Sumit, you can go ahead.

So joke internally is whenever we need capital, we have to make one phone call to Prem. Prem, we need money and Prem say, okay, here is the money now do what you want. So availability of capital, I don't think is a problem for us. The problem on the ground is to find high-quality investment opportunities. Now if we were to deploy capital and purely for the -- you just mentioned for generating fees, et cetera, there are many opportunities. We can deploy billions of dollars on the ground, and they are -- I mean you heard the entire presentation on the India opportunities. We can deploy tons of capital over there. But the real challenge is to find folks like these who are sitting right here, all our presidents who are running very strong operations, high margins, cash flow focused, high on integrity, high on values. And then some of these guys are not going to like what I'm going to say next at a fair entry price. So that's where it becomes challenging. As you would know, Indian markets are fairly highly valued right now. Capital markets is buzzing. There's a ton of liquidity in the market a lot of money chasing very limited set of opportunities kind of businesses we passed on. We didn't like those eventually went public at much higher valuations. So then we went back and rechecked our own thesis, whether we committed mistakes and we missed seeing anything, but we were clear once they went public, over time, the quality showed up and the high valuations did not stack up. So long story short, we again see a ton of deal flow about 300, 400-odd companies in a year. But we stay focused on -- we have got set parameters, high-quality promoters, very easy to go wrong with people. So one thing what we do very well on the ground in India is to do background checks. So we spend a lot of time on finding high-quality partners for ourselves, high-quality businesses. where the business models are settled. We look at, at least, 10, 12 years of free cash flow generation profile in the past, not in the future. And finally, a fair enterprise so that everybody is happy sitting in the room. So I think that's what I would say, Ben. There's -- we'll find opportunities. As the capital markets coming down, we'll find more opportunities right now.

Trouble is opportunity, right? [indiscernible]. And we'll take the last question from mic 1.

Hello. I'm [indiscernible]. I've been shareholders since the IPO of Fairfax India and also Fairfax for a very long time. I'm really happy to see first time here coming to our meeting. I would just like sort of -- I guess it's the last question. So a reflection of last 10 years. A lot of times we learn more from our mistakes than our successes, anything mistakes of commissions or omissions you would like to share with us. And also specifically, one question about IIFL Asset Management. They have a mutual fund business that has been around for a very long time. And given the backdrop of financial sector in India, like how do we see that going forward?

Okay. Thank you for the question. Probably to reflect on that would be -- Gopal might be better because he's been involved the full 10 years. But I would -- before Gopal answers that, I thought it might be interesting. NCML has been one of Fairfax India's great learning experiences. And that's given us the opportunity to be introduced to Sanjay Gupta. And that was our first -- I think our first investment, right, NCML. So that was our first investment, and it's probably been one of the most -- the most challenging. And so I think hearing Sanjay talk to us and tell us how he's turned around that company would be quite interesting. So maybe, Sanjay, you could just give us a little perspective on how you've turned around the company. And so one thing that I would say is that our patience and our ability to last through a long period of time and can turn something that might have been a mistake and yet we're in a high-growth environment like this, it can turn out to be possibly a big winner over the long term. And hopefully -- so Sanjay will talk about some of the changes he's made at NCML. And then I don't know if Gopal, if you have any reflections that you could add after Sanjay has done.

Good morning, ladies and gentlemen. It's a pleasure to be here. So I'm going to talk about NCML. NCML, as Ben mentioned, was the first investment Fairfax India made in India. And it didn't turn out the way it was envisaged. In fact, it's been very, very bad. But then there is a silver lining to everything as they say. And the silver lining in this was opportunity to be able to take very tough decisions. So that's what the team at NCML seized upon. And in the past 3 years, we have been able to take some very tough decisions and led a quite transformation of the business. So if you were to ask me how we were able to do it, there were just 2 words. First of all, what is focus, and the otherwise waste elimination. Please don't go by the literal meaning of word waste. By waste, I mean, use it as a metaphor for anything which doesn't add value to the business. So elimination of that. So focus, we at NCML sat in 2022 and asked ourselves 3 questions. First of all, what businesses we want to be in. What kind of kind of customers we want to deal with and what kind of employee behavior, we need to deal with these customers to give us a preeminent position in those things. So these are the 3 questions we had. And why we asked this question at that time, NCML had 10 business verticals, which was not justified for the kind of size, the size of business NCML has. So at the end of this exercise, we were able to eliminate 5 businesses. 5 businesses went out of the window, and we've decided to focus on 5 remaining businesses. Another key elephant in the room was the silo projects. Just we were awarded 16 silo projects after NCML was taken over by Fairfax, and this was a huge financial commitment. And it was -- we realized it sooner that we were not in a position to complete all those. So we took the hard decision, surrendered 9 to Government of India back and decided to focus on the remaining 7. In 2022, we had just one of the 7 silos ready. So in the -- now let me come to what has happened in the past 2 years. In the last 2 years, we have been able to complete 6 silos out of these 7 and hand it over to FCI. The one we are remaining is a challenge -- is an engineering challenge because we are trying to build the largest rice silo in the world. And as of now, there is no proven design or technology how these silos can update. So there's a lot of R&D involved and which has led to this kind of a delay. So this is -- so now we are very sure that in the next 2, 3 months, we will be able to hand it over to FCI again. And this -- with this, our commitment to FCI and the stakeholders will be over. In terms of coming back to the main business of NCML, we have been able to eliminate a lot of cost, a lot of wasteful activities, as I said, has gone out of the window. Now in the past 3 years, if you were to look at our financial performance, our top line has grown by 22% year-on-year for the past 3 years. Our EBITDA on the bottom line has grown by 70% year-on-year. In fact, in the last 5 years, if you were to look at what our EBITDA was in 2021 and as we speak here in 2025, India, we follow like financial year of April to March. Our EBITDA this year is 4x of what it was in 2021. So this year, this is a kind of a transformation we have been able to achieve at NCML. And I hope this journey is still not complete, and we'll continue to do much better in the coming years. Thank you very much.

Thank you, Sanjay. Thank you. And we own 91% of that business. Gopal?

Reflecting on the last 10 years journey, I mean, what we have demonstrated in the market is we always said Fairfax India is a permanent capital, long-term investing, patient capital. And we have always demonstrated, I mean, NCML was one example. And if you go back to 2018 or '19 when IIFL demerged all their businesses into 3 different companies when they got listed and especially that happened just after the IIFL's crisis where all NBFCs were de-rated in the market. When normally things -- when you do such enormous exercise of demerging 3 different businesses, I mean, demerged into 3 different businesses, you generally feel you will have the aggregate market cap of all the companies has to be far greater than the previous one. But in this case, it was almost half of what was it. So we stayed on and now you have seen the end result of all those companies. If you see the market cap. As a group IIFL investment for us is now, in dollar terms, close to 18% to 20%, that's one thing I would say. And the other thing, when it comes to mistakes, I mean in the investment world, I think all of us, regardless of what background we come from, what intelligence levels we have and whatever we do, we do commit mistakes. But all that we try and accomplish is -- I mean, it's always -- I have seen even before I came here in another Fairfax' entity where I was managing investments, we had a track record of being right 70% of the times. And Prem also always keeps saying even in Fairfax that as long as you are right 70% of the time, I think the winners will take care of all the losers. So pretty much, I think in Fairfax India, if you see -- I mean, you've seen the slide, and we have shown how our companies are growing, and 2 of the companies I said were on the turnaround, but they're all backed by great investors, great promoters. I mean in terms of integrity, in terms of the business culture, I think there's nothing to fault. I think it's more matter of the business cycle and in some places, I mean, all of that you hear. So I do -- we do learn from our mistakes, but I will also say we always aspire to learn from the others mistakes. But sometimes in life is such that you also learn from your own mistakes. I mean you are made to make some mistakes, but we try to -- that has been the approach, and that's how we continue to approach this game.

Thank you, Gopal. And now I think our founder, Prem Watsa, wants to say a few words.

I've attended for 50 years annual meetings. And just like this. And at the end, there would be an old guy coming in and saying, all sorts of good things about management, and we would be sitting about that my 20s and 30 we'd be laughing and smiling, this is all set up. But having said that, I did want to say, I am the old guy now and both Ben and Gopal have done an outstanding job in a transition, not easy, give them a nice round of applause. And I'll pass it back to Ben.

Okay. Yes. And so that's our meeting. So now an event like this doesn't happen alone, and I want to thank people in particular, the venue, the Ritz-Carlton, all our presidents and directors, Gary and his team, Jen, Amy, Debbie and their team, Brad, John, Sumit and his team, of course, Prem and Chandran and of course, Gopal for all the assistance in making this a great event, not only for us, but I think for Canada and India, that 2 of our countries can work together and that we will continue to help Canadians and Americans, wherever our shareholders come from, to navigate India's opportunities. And I wanted to thank everyone that took time to come here in the room and then listening online to hear our story. Fairfax India is a culmination of a lot of collective efforts, and we think we have the best team to find ideas and problem solve solutions together. Over the long term, Fairfax India offers a vehicle for global capital to invest in the fast-growing economy where businesses may compound at 2x to 3x faster than those of Canada or the U.S. We hope you leave here today with a clear picture of our vision. Thank you very much.