Following Gautam Adani’s entry in the Indian aviation business and amid high potential of airport business high growth in the coming years, Tata Group has entered Indian airport business.
A consortium of Tata Group, a unit of Singapore Sovereign wealth GIC and SSC Capital Management will be investing ₹8000 crore ($1.2 billion) in the GMR Airport Ltd which runs India’s biggest airport – New Delhi International Airport.
GMR Airports Ltd is a subsidiary of GMR Infrastructure Ltd and is the leading company in the airport management space along with others like GVK Power & Infrastructure Ltd which runs airport in Mumbai.
As per deal, the consortium will invest ₹1000 crore in the airport infrastructure and will buy ₹7000 crore worth of equity shares. The deal valued the GMR Airports at ₹18,000 crore. And after the deal, Tata will own 20% stake, GIC will own 15% stake and SSC will have 10% stake in the company ( GMR Airports).
Last month, Gautam Adani led Adani Group won the privatization bid for five airports which were managed by the Airports Authority of India (AAI). Now this deal marks the entry of Tata Group in the airport management space. The arrival of big Indian conglomerates in this space also makes more sense because Narendra Modi government is aggressively backing for new airports specially in the tier 2 and tier 3 cities under its “Regional Connectivity Scheme” – UDAN.
GMR Infrastructure has a debt of about $2.9 billion and the company is selling its assets so it can pay its debt liabilities.
GMR shares jumped as much as 9.8% to the highest intraday level since September 3 in Mumbai, while the broader S&P BSE Sensex index rose 0.6%.