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One of Canada’s best-known investors says that Narendra Modi’s election victory in India reinforces the bullish opportunity for investing in the country.

Prem Watsa, the chief executive officer of insurance conglomerate Fairfax Financial Holdings Ltd. and chairman of Fairfax India Holdings Corp., said in an interview that Mr. Modi’s second five-year term will continue to push India toward a business-friendly environment that will reward investors.

“The next five years will be transformative,” Mr. Watsa said.

He suggested that economic growth could accelerate to 10 per cent annually, up from 7.2 per cent in 2018, if Mr. Modi continues his mission to modernize the economy.

Fairfax India is a holding company that invests in publicly traded Indian stocks, private companies and debt instruments. It began trading on the Toronto Stock Exchange in January, 2015, soon after Mr. Modi won his first term as prime minister of India and Mr. Watsa wagered on his success.

Since then, the stock has performed well: It has delivered a total return of 39.3 per cent, which is more than double the return of the S&P/TSX Composite Index (with dividends) and the MSCI Emerging Markets Index over the same period.

Yet, Fairfax India has been struggling after a strong start. The share price hit a high on Sept. 1, 2017, but has since retreated about 28 per cent. The company’s recent letter to shareholders acknowledged that India’s strong GDP growth last year appeared to have little impact on the stock market: The S&P BSE Sensex 30 index slumped 3 per cent (in U.S.-dollar terms) in 2018.

Mr. Modi has won widespread praise for improving many aspects of India’s sprawling economy. He streamlined taxes with a national goods and services tax and managed to keep India’s economy expanding at a pace between 6 per cent and 7 per cent during his first term. The World Bank’s ease-of-doing-business index shows that India’s standing in the world improved to 77th place in 2018, up 65 places, under Mr. Modi.

But the Prime Minister has also proved controversial. He has clashed with the Reserve Bank of India, leading to the resignation of the central bank’s governor and prompting concerns about Mr. Modi’s authoritarian streak. He has raised ethnic tensions and stoked conflict with neighbouring Pakistan. And while India’s economic activity is strong, unemployment has been high.

However, Mr. Watsa – a value investor who has long been attracted to cheap and, in some cases, beaten-up stocks and has about $5-billion currently invested in India – says he believes that a Modi-led India is the single best country for investment dollars. There, he says he can find companies trading for 15-times earnings, but are reporting profit growth of 30 per cent to 40 per cent.

Among Fairfax India’s top holdings: IIFL Holdings Ltd., the Mumbai-based financial services firm; and Bangalore International Airport Ltd., a private company that serves as a hub to India’s high-tech centre.

“We have a lot of money invested there, and in the years to come we’ll invest a lot more,” Mr. Watsa said.