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Fairfax Financial Holdings Ltd. founder Prem Watsa has always seen major growth potential in his birthplace of India, and now he is putting money behind that vision with a new investment holding company that has already raised $500-million (U.S.).
Toronto-based Fairfax said Wednesday that it will sponsor and promote Fairfax India Holdings Corp., which will operate as a public company that invests in businesses focused on India’s marketplace.
Fairfax India will be funded in part by a $300-million investment by Fairfax, in exchange for 30 million voting shares, according to an initial public offering prospectus filed Wednesday. Hyderabad-born Mr. Watsa will serve as chair of the new company.
“We’ve been in India for at least 15 years, but we’ve found that the amount of money we could invest given regulatory constraints is limited.
The opportunity in India is greater than our ability to invest alone so we decided to create a separate company to allow other investors to participate,” Mr. Watsa said when reached by phone in Toronto. The company will be listed on the Toronto Stock Exchange.
Joining Fairfax are three cornerstone investors: Markel Corp., West Street Capital Corp. and certain funds and accounts of FMR LLC. They will contribute a total of $200-million, and receive 20 million shares. “We’ll raise another $500-million in the marketplace. And it’ll be from long-term investors,” Mr. Watsa added.
Mr. Watsa said Fairfax has confidence in the “business-friendly government” of Indian Prime Minister Narendra Modi, who was elected in May. He has pledged to improve the lives of the 1.2 billion Indian people through urbanization, transport and technology investments.
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