BIAL raises ₹9,000 crore through unlisted NCDs to fund airport expansion

Bangalore International Airport Limited (BIAL) -- the joint venture company operating Bengaluru Airport -- on Friday said it has completed the issuance of unlisted non-convertible debentures (NCDs) worth ₹9,000 crore.

The transaction is being undertaken in two tranches -- ₹4,362 crore completed on July 25 and ₹4,638 crore scheduled for early October this year -- BIAL said in a statement.

"BIAL has successfully concluded the largest unlisted private placement of non-convertible debentures (NCDs) in India's airport sector, raising a total of ₹9,000 crore. With a 15-year tenure, the refinancing allows the company to conserve capital and focus resources on funding future expansion plans," it said.

The transaction witnessed overwhelming investor demand across the spectrum, including banks, insurance companies, infrastructure debt funds (IDFs), and public financial institutions (PFIs), reflecting the market's strong belief in BIAL's long-term vision and governance, it stated.

The transaction also provides significant savings in borrowing cost, driven by the AAA credit rating, a shift from Marginal Cost of funds-based Lending Rate (MCLR)-linked to fixed interest rate, and the extended maturity profile, the private airport operator said.

BIAL is a joint venture between Fairfax India, Airports Authority of India, and Karnataka State Industrial and Infrastructure Development Corporation (KSIIDC) with Fairfax India holding 74 per cent stake and the other two other partners holding 13 per cent stake each.

The 74 per cent stake of Fairfax India comprises 30.4 per cent held by its wholly-owned subsidiary and 43.6 per cent are held by its indirect subsidiary, Anchorage Infrastructure Investments Holdings Ltd.

"This issuance is a significant milestone for BIAL as it not only reflects strong investor confidence in our long-term vision, but also strategically strengthens our financial position ahead of the next phase of expansion. The refinancing enables us to optimise our capital structure," BIAL Chief Financial Officer Bhaskar Rao said.

Moreover, he said, the long-tenor structure and improved credit rating will translate into greater value for the company's stakeholders, including passengers and airline partners, through enhanced affordability and infrastructure development.

Overwhelming investor interest helped BIAL narrow their credit spreads and get a structure which aligns to their capital expenditure plans, said Arnab Choudhury, Group Head DCM, SBI Caps, which acted as the sole arranger for this issuance.