DIAL plans to raise Rs 3,000 cr via masala bonds

Proceeds will be utilised to refinance company's debts

Photo: Wikipedia

Delhi International Airport (DIAL), a joint venture between GMR Group and Airports Authority of India, is looking at raising Rs 3,000 crore via bond market to refinance its debts, a senior GMR executive told Business Standard.
 

The group is looking at various options, including masala bonds, to raise funds. Masala bonds are rupee-denominated bonds that help in raising funds from overseas markets at lower rates; many entities have been taking this route to raise money.
 

DIAL, which is majority-owned by the diversified GMR Group, has a debt of around Rs 3,000 crore.
 

“We would refinance up to Rs 3,000 crore through masala bonds or dollar-denominated bonds,” Sidharath Kapur, president (finance & business development), GMR Airports, said here. He said the company is looking to refinance the debt of DIAL at a lower cost.
 

According to him, these bonds will be issued in the next two-three months, adding, “It will also depend on market conditions.”
 

Passenger traffic at Delhi airport grew 18.1 per cent in FY16 to 48.42 million, compared to 40.98 million in 2014-15.
 

DIAL is on a massive expansion plan and has, in fact, submitted a master plan for the same to the ministry of civil aviation. Over the next four-five years, DIAL plans to implement an expansion programme, which includes airfield enhancements, expansion of terminals and construction of new runways, among other facilities.
 

Kapoor also said that the group will start planning for Mopa airport in Goa in the near future. “We need to complete the project in 36 months and believe it will be a profitable venture,” he said. He added the company is not looking at any foreign partnership for implementing the project.
 

The group is also actively looking at airport projects across the world but Kapoor said it will be cautious while bidding for projects. “We will only go for projects that are profitable,” he said.
 

Kapur was talking to reporters in the Capital after announcing the schedule of the Global Airport Development, an event for the global airport investment community that focuses on meeting capacity needs of a high growth region.