AAI to raise funds for non-metro airports
Having won the mandate to modernise 35 non-metro airports on its own, AAI is gearing up to raise huge quantum of funds over the medium term.
By Sunny Verma & G Ganapathy Subramaniam, TNN |
NEW DELHI: Having won the mandate to modernise 35 non-metro airports on its own, AAI is gearing up to raise huge quantum of funds over the medium term.
The authority, which is also a partner in the joint ventures which are upgrading the Delhi and Mumbai airports, has appointed AK Capital Services as financial advisor-cum-lead arranger for raising debt. The public sector organisation has also obtained ‘AAA’ rating from Crisil so that it can float debt instruments.
UTI Bank, ICICI Securities and Allianz Securities have been selected as arrangers to help AK Capital, government sources said. The advisors would assist AAI in placement of bonds, other debt funding options, and in identifying the suitable time to tap the market.
According to official sources, the government will need investment to the tune of Rs 40,000 crore for expansion and modernisation of airport infrastructure across country. While private participation has been allowed with majority stake at some airports, AAI will need massive funds for projects where it has independent charge.
AAI is gearing up to meet the challenge, civil aviation minister Praful Patel said. Apart from expansion of airports, he said the authority was also investing in modernisation of navigation facilities.
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The load on AAI is likely to be heavy, despite its strong balance sheet, since private participation is not allowed in ‘airside’ development at 35 non-metro airports. It is estimated that AAI will require Rs 5,500 crore for investment in these airports. Start a SIP with as low as ₹500 with ET Money App!
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