GIC, Mitsubishi Corp likely to pick 25-30% stake in GMR Airports

Deal may fetch Rs 7,000-8,000 crore

GMR Airports, a subsidiary of GMR Infrastructure through which it has stakes in Delhi, Hyderabad and Cebu (the Philippines) airports, among others, is in the final stage of discussion to sell 25 to 30 per cent of its holdings to Singapore’s GIC and Mitsubishi Corporation of Japan. The deal is expected to be announced very soon, according to merchant bankers.

The GMR group’s airport assets are valued at around Rs 25,000 crore. The proposed equity sale, they said, could generate Rs 7,000-8,000 crore, which would help the group reduce overall debt from Rs 19,850 crore to around Rs 12,500 crore.

GMR Infrastructure, which also has energy and highways businesses, has a 91.95 per cent stake in GMR Airports (the rest is held by private equity investors), which will now be demerged into a separate entity. A spokesperson for the group did not comment on the details of the deal, but said: “There are a number of investors who show interest in our airports and we continue to engage with them to evaluate.”

GMR Infrastructure said earlier this month that with a view to unlocking shareholder value, the board had decided to form a sub-committee to consider and evaluate possible options of demerger.

GMR Airports has a 64 per cent stake in Delhi International Airport, 63 per cent in Hyderabad International Airport, and 40 per cent in Maktan Cebu International Airport in the Philippines.

It has also won development projects for Goa International Airport (in which it has a 100 per cent stake, Crete International Airport in Greece (21.6 per cent stake), and Clark International Airport in the Philippines (where it is an EPC contractor with a 50 per cent stake). The group is also in the race to bid for some of the six non-metro airports that are up for privatisation by the Indian government.

According to experts, the stake sale will help the group generate more funds so that it can expand the airport business, especially when more and more airports within India and abroad are getting privatised.  

Currently, GMR has a rated airport capacity of 275 million passengers a year which includes new projects. It has an operational capacity of 87 million passengers a year, and another 76 million is under development. In the nine months of FY19, its operational airports handled over 77 million passengers, with Delhi growing by over 9 per cent and Hyderabad by 20 per cent in this period.   

Key numbers 

• Rs 25,000 crore Estimated value of GMR group’s airport assets
• 19,850 crore Group’s total debt
• Rs 12,500 cr Debt after stake sale
• 87 million passengers: Annual operational capacity of GMR-run airports
• 76 million passengers: Additional capacity under development