AAI public offer likely next year

The Airports Authority of India (AAI) is likely to go for an initial public offer (IPO) of shares by next year.

It had planned to go for one in 2009 and had appointed KPMG as consultant, which valued its assets at Rs 20,000 crore.

"The valuation was not much that time. They did it without putting a strong business plan and the valuation was only for the land. We have earmarked that our valuation should be close to Rs 80,000 crore," said chairman V P Agarwal on Friday. He said AAI was seeking a correct valuation and was putting in place a strong business plan before going for the IPO.

He said corporatisation of AAI was a good idea but needed permission, after getting the business plan ready. "The listing process may take one year," he said. Corporatisation would give AAI access to funds, formulate strategies and enable it to function as an entity accountable to a board of directors.

In the project to develop 35 airports in Tier-II cities under the 11th Five-Year Plan (ending March 2012), work on 22 airports has been completed and the remaining ones are in the process of completion and commissioning. "In the 12th Five-Year Plan, we would be moving to other cites which have not been covered," he said.

Among the metropolitan cities, while Delhi airport has been upgraded, work on those at Kolkata and Chennai is in progress. "We are hopeful of completing the Chennai international airport work by December and its domestic airport work by October," he said

Agarwal said 15-20 airports would be reactivated in the next phase, after the completion of the bigger ones. It would require around Rs 3,000 crore investment for this. "We planned to raise Rs 2,000 crore as loan, of which we have already borrowed Rs 1,000 crore. We would go for the remaining sum by next year," he said.