Prem Watsa, a billionaire industrialist who left Hyderabad for Canada with just eight dollars in his pocket, is set to become the owner of IDBI Bank. Often referred to as the “Warren Buffett of Canada,” Prem Watsa is the owner of Fairfax Financial Holdings, a company with a valuation of $100 billion.
Fairfax, which began as a small insurance company in 1985, has transformed into a massive financial conglomerate, thanks to Watsa’s business acumen, foresight, and discipline. His company will pay ₹52,878 crore to acquire a 60.72% stake in IDBI Bank.
According to the news agency Reuters, this marks the largest cross-border banking deal in India. Let us explore who Prem Watsa is and how he built such a vast business empire.
The Warren Buffett of Canada
According to a report by The Economic Times and the book “The Fairfax Way”, Watsa is an industrialist of Indian origin who moved from Hyderabad to Canada in the 1970s. He is known for working quietly; shunning the media spotlight, he reportedly did not speak to a single reporter during the first 15 years of Fairfax’s existence.
He only began holding conference calls with investors in 2001. Watsa is renowned as a “value investor.” His mentor, John Watson, taught him the principles of value investing as developed by Benjamin Graham.
Benjamin Graham’s philosophy advocates for investing in companies with strong fundamentals that are currently undervalued, and then holding those investments for the long term. Warren Buffett, one of the world’s most prominent investors, also champions a similar investment approach. By following these very principles, Prem Watsa invested in several companies that have since proven to be gold mines for him. This is why Watsa is often referred to as the “Warren Buffett of Canada.”
The Journey from Hyderabad to Canada
Born in 1950 in the Indian city of Hyderabad, Prem Watsa was the son of a school teacher. He attended the Hyderabad Public School, the same institution where Microsoft CEO Satya Nadella, Adobe CEO Shantanu Narayen, and World Bank Group Chairman Ajay Banga also studied. After completing school, Watsa continued his education at IIT Madras and later passed the IIM entrance exam.
However, Destiny had Other Plans for him
Watsa’s elder brother was already living in Canada, and his father wished for his younger son to build a career there as well. In his book, *The Fairfax Way*, Watsa writes, “I had no interest in Canada. I didn’t want to leave India, but at the age of 22, you tend to listen to your father.”
Upon arriving in Canada, he earned an MBA from the University of Western Ontario. To cover his educational expenses, he worked as a salesperson, selling air conditioners and furnaces. According to Watsa, the humility and hard work required of a salesperson proved to be invaluable to him later in his career.
The Investment in IDBI Bank Stands as Fairfax’s Largest Investment to date
However, Watsa had already entered the Indian market in 2014 through ‘Fairfax India Holdings.’ His son, Ben Watsa, runs a fund management firm in India called ‘Marvel Capital,’ which invests exclusively in the shares of Indian companies. Fairfax provided capital to IIFL in India at a time when the company was facing regulatory challenges within its gold loan business.
Furthermore, Fairfax holds a majority stake in Bengaluru International Airport Limited. The company has also invested in Summer Chemicals and a few other manufacturing companies. However, due to regulatory requirements, it has reduced its earlier investment in CSB Bank.
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