Just curious,why are the promoters continuing to sell?
Now that demerger is completed , what would the be expected PE going forward for the Pure Play Airport mgmt bushiness.
Any idea, how much debt is being transferred to each of the demerged entities?
Rs 1700 crore debt will go to GMR Infra and while remaining Rs 2900 crore will go to GMR Power.
Sorry the data i posted is only about corporate debt
Can you please explain the difference in the corporate debt and the other debt? This seems really confusing, even I saw this in their Investor presentation.
Even i am not able to find the difference
Good report on GMR Demerger - https://mnacritique.mergersindia.com/gmr-divestment-airport-business-restructuring/
Does anyone know what is the average cost of borrowings of the Merged entity and the demerged GPUIL and GMR Airport s?
Are things going to change for GMR with demerger?
Demerger in the airport business seems to be very well coinciding with the recovery in Air passenger traffic post covid crisis. India resumed regular international flights from April 27 marking an end to 2 year air bubble policy started during initial days of covid. As per OAG Top 20 busiest Airports report Delhi Airport stands third in busiest list of global Airport in the month of March’22. Interestingly, passenger number are up 6.9% in comparison to March’19 pre-covid levels and up 18% in comparison to Feb’22 levels.
RGIA Airport, Hyderabad is the ranked 4 th busiest airport in India. And as per reports the domestic passenger traffic is close to pre covid levels. On March 27 the number of passengers in a single day from Hyderabad Airport touched around 53000 which is 109 % of pre covid average per day domestic passengers . On March 28, the airport also achieved the highest-ever international passenger recovery of about 89 per cent of pre-Covid daily average passenger traffic.
As per Q3 presentation Goa Airport phase 1 is expected to completed and inaugurated by August’22. The current Airport managed by AAI in Naval Base has severe capacity constraints and air traffic congestion.
Control period and revision in Tariffs.
. In an order on the tariff revision for the third control period (April 2021 to March '26) based on a proposal by the GHIAL. As per the orders of the regulator, the airport operator was allowed to increase UDF from the existing Rs 281 to Rs 480 and Rs 393 to Rs 700 for domestic and international passengers respectively from April 1, 2022. Similarly, the charges will be enhanced up to Rs 750 for domestic and Rs 1500 for international passengers by December 31, 2025. However, the charges will be reduced to Rs 500 and Rs 1,000 for domestic and international passengers for the last three months. The new tariffs has come into place from April '22
Current control period for Delhi Airport is from 01.04.2019 to 31.03.2024.
Aerocities and Land Development
Has around 230 acres of land at DIAL, 1463 acres at GHIAL and 232 acres at Goa for development.
The warehousing facility of Amazon in Hyderabad Airport has been further expanded to include a new unit of over 2 lakh sq ft vindicating the potential of Hyderabad Airport land development.
GMR Hyderabad Aerotropolis Limited (GHAL) has joined hands with Hyderabad-based Saint Mary’s Educational Society to set up a Sancta Maria International School as part of the upcoming 100-acre edu port cluster at Hyderabad airport. GHAL is a wholly-owned subsidiary of GMR Hyderabad International Airport Ltd (GHIAL), which runs the Hyderabad international airport at Shamshabad. The residential academic facility, which will be the second K12 (kindergarten to 12th) Sancta Maria International School in the city, is slated to come up on a 15-acre parcel of land at Hyderabad Airport City by 2022.
Boston Living, an incubation venture of INCOR Group, has signed up with GMR Aerocity Hyderabad to develop co-living and serviced residences for young professionals. The ₹250-crore ‘The Landing by Boston Living’ project will come up in GMR Aerocity Hyderabad on leased land, with 0.5 million sq ft of developed space and 1,500 beds.
GMR Hyderabad Aerotropolis Limited (GHAL), has entered into a joint venture with ESR Hyderabad 1 Pte Limited (ESR), a subsidiary of Hong Kong-headquartered ESR Cayman Limited, to develop a logistics and industrial park at the Hyderabad airport city. The park, which is proposed to be developed over 66 acres at a project outlay of Rs 550 crore, will be developed by a special purpose vehicle, GMR Logistics Park Private Limited, in which ESR and GHAL will hold 70% and 30% stake, respectively.
DELHI AEROCITY
Through an auction mechanism monetized development FSI of about 10 million square feet in two different phases; 5 million in first phase and 5 million in second phase. And in that open auction, Bharti was the best bidder and they have the right at this stage to build out commercial spaces in Delhi Aerocity.
GHIAL has already commissioned 4 rapid exit taxiways,completed the rehabilitation works of the Main Runway in Q1 FY’21-22 as part of its capital expansion works, GHIAL is well underway to complete its expansion to a capacity of 35 Mn passengers annually by September 2022 as per the company.
DIAL is undergoing expansion of its airside infrastructure and terminal capacity, as per the approved Master Development Plan, to 100 Mn passengers annually. Substantial progress has been made on several fronts despite some major Covid related challenges and migration of labour, and the entire Phase 3A expansion is now planned to be completed by June’23. Further, India’s first General Aviation Terminal that can cater to 150 private movements daily and handle over 50 passengers every hour was commissioned in FY’20-21 at Delhi Airport.
Key risks
- About 61.2 % of the promoter shareholding is pledged. There has been continuous open market sale of shares by the promoter eventhough in small quantities.
- Any downward revision in tariffs in future control periods can be a negative. However, Hyderabad airport tariff were revised upwards till 2026 in 3rd control period. And as DIAL is currently undertaking major capex the chances of reduction in tariffs in third control period are lesser.
- Another wave of covid can dampen the air traffic prospects completely.
To sum it up, GMR seems to be in a sweet spot with the demerger. With the demerger the overhang of power and infra assets are no more there.The revival in passenger and cargo traffic post covid esp in the key assets viz, DIAL and GHIAL should benefit the company in the short term. Expected completion of GMR Goa airport by Aug’22 can be another trigger. Strategic collaboration with Group ADP provides comfort even when GMR promoters is selling stake in small quantities. Also interesting is the continuous improvement in Non Aero business. The above mentioned factors along with cash flow from rentals on Aerocity deals are also a major positive. Company has also been able to win new international Airport development deals like the one at Medan, Indonesia. Also company has won the case for operation of Nagpur Airport. However, MIHAN is yet to handover the airport and is currently under operational control of AAI.
Discl: Invested and biased.
A good decision by the company to sell the stake in Macten Cebu Airport
gmr macten cebu.pdf (350.9 KB)
GMR Group and its affiliate are acquiring an 11% stake in GMR Hyderabad International Airport Limited from Malaysia Airports Holding Berhad (MAHB) and its subsidiary. The acquisition is for a negotiated aggregate consideration of USD 100 million. GMR Airports Limited will increase its stake in GHIAL to 74% through this transaction. The deal is subject to customary closing conditions and is expected to be concluded within a maximum of 135 days from the date of execution of the agreement.
