New Delhi: Canadian billionaire Prem Watsa’s $5.6 billion bet on IDBI Bank is backed by the conviction that India is in the midst of a sustained economic boom that will continue over the next decade, he said in an interview. Indian-origin Watsa is chairman of Fairfax Financial, which has received government nod to buy a 60.72% stake in IDBI Bank, the first such majority investment by a foreign entity in a government-backed lender. With this investment, India becomes the biggest country exposure for the investment firm.
“You’re going to get an economic boom in India for the next 10 years, I think, of very significant proportions,” he told ET in a phone conversation in his first comments after clinching the deal that Fairfax has spent more than four years pursuing.
Click here to read full ET interview with chairman of Fairfax Financial Prem Watsa
PM Narendra Modi is going to “make it more business friendly,” Watsa said. The bank’s financials were looking up now after having incurred losses between 2017 and 2020. “We just think of the potential, and this bank has not expanded because of its problems,” he said.
“Just recently, maybe a year or two, the RBI said, okay, you can expand now. And they took out all the safeguards, right?. And they’ve expanded a little bit. Now we’re there.”
He pledged to ensure fiscal integrity of the lender and keep the welfare of staff in mind. “We’re always going to keep it financially sound,” he said.
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He sounded a note of caution on AI euphoria. “Money is going into data centres and AI and all of it’s in US and that might change and the money will go to countries like India, which is going to be on everyone’s list and right now there’s a lot of excitement in AI but that already is coming down,” Watsa said, adding that Fairfax’ bets on AI were “zero”.