GMR Airports IPO likely by June 2018
GMR Airports will use the funds raised from the IPO to pay off debt, private equity investors and will use whatever is left for its projects
New Delhi: GMR Airports Ltd, which operates India’s largest airport in New Delhi, is meeting investment bankers across three days, starting Monday, as it prepares to launch its initial share offering (IPO) planned by June, a person aware of the matter said.
The bankers, this person said on condition of anonymity, will make presentations, based on which GMR will choose its banker for the IPO.
“They are planning an initial public offering (IPO) for GMR Airports and it could be up by May-June. The markets are good, all the IPOs are doing well; so this is a good window,” this person said, asking not to be identified.
The company will use the funds to pay off debt, private equity investors and use the rest for its projects, the same person said. A GMR spokesman declined to comment.
Apart from Delhi, GMR Airports Ltd, a unit of GMR Infrastructure Ltd, is also handling four other airport projects—in Hyderabad, the Philippines, Goa and Greece.
The Delhi International Airport Ltd (DIAL) handles about 57.7 million passengers annually, while the Hyderabad airport handles 15.2 million. Goa already has an airport run by the Indian navy, and GMR is set to start building a new Rs3,000-crore airport in January.
GMR will partner with Greek infrastructure major Terna SA to develop a new international airport at Heraklion, at Crete.
The existing Heraklion airport is the second largest airport in Greece, and has witnessed steady traffic growth in the last 3-4 years handling over 6 million passengers annually and is facing capacity constraints.
GMR had earlier built and operated the second airport in Istanbul, which it later sold off.
The group is looking to raise about Rs3,000-5,000 crore from this sale, the same person said, adding that valuations could go up if an upcoming regulatory order is favourable.
GMR Airports is expecting orders to fix tariff at Delhi International Airport Ltd in December.
“If the order is favourable, it will be a booster shot,” the same person said.
GMR Airports’ annual revenue stands at about Rs6,000 crore.
India will need to construct an additional 500-600 million of airport capacity by 2030 which will need $36-45 billion, consulting firm CAPA said in its October report on airports.
“Indian airlines are expected to induct close to 350-400 aircraft over the next five years. The three largest LCCs will account for close to 275 of these aircraft, led by IndiGo with 110 narrow bodies, 35 ATRs and possibly some wide bodies,” CAPA said.
“The 55 new airports that are estimated to be required by 2030 will need 150,000 to 200,000 acres of land to be allocated for their development,” it added.
Shares of GMR Infrastructure rose 2.15% to close at Rs19 on the BSE on Monday while the benchmark Sensex closed 0.13% higher at 33,724.44 points.
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