India’s GMR Infrastructure Limited has recently signed of a deal with France’s Groupe ADP giving up 49
percent of its stake in percent of its stake in airport holdings. With a long legacy of 25 years, the GMR group has accomplished various airport building, operations and maintenance projects through the years. It is one of the leading airport builders and developers in India which developed the first Greenfield airport of India in Hyderabad. The company has modified and operates the Indira Gandhi International airport in Delhi and owns 64 percent of the infrastructure. The Goa International airport has been also developed and maintained by the group. Talking of international projects, the GMR group has accomplished successful airport projects in Philippines and Greece.
GMR Infrastructure Limited is involved in various charitable works through a foundation which looks after the food and education for underprivileged children. It has an annual generation of 4,600 MW of energy along with businesses in 26 other sectors.
Until last year, there was an agreement between GMR and Tata Corporation which was hanging for quite some time. GMR was to give up 44 percent of its stake in airport holdings to Tata for an undisclosed amount of money. But with the onset of 2020, it raised the bars to 49 percent and came to an agreement with the French company.
GMR is already growing as one of the trusted airport developers and operators globally and an agreement like this will open international relations for them on a large scale. 10,780 Crore in INR is the valuation of the deal which will be split into two parts. 24.99 percent of the stakes will be given up in the first part in exchange of 5,248 Crore in INR. The next phase however faces some RBI approvals which consists of 24.01 percent of the stakes and will be carried out in the upcoming months.
“We view this as positive as GMR has been able to enter into a deal at a higher valuation and raising higher cash, which will be utilised to eliminate entire corporate debt. Along with sale of GMR Kamalanga, this will wipe out the entire corporate debt. Key risk is the approval of the deal by regulatory authorities. This is a less problematic than the earlier transaction," said Mohit Kumar of IDFC Securities.
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