Tatas forays into airports, buy stake in GMR
Reeba Zachariah, Saurabh Sinha | TNN | Mar 28, 2019, 00:52 ISTHighlights
- The proposed stake-purchase has been routed through Tata Sons, which also owns majority stakes in two carriers—AirAsia India and Vistara. Tatas’ interest in the aviation business also includes charter services through Taj Air.
- The Tatas follow billionaire Gautam Adani’s bet on the sector after his company won bids to operate six airports in the country last month.
NEW DELHI/MUMBAI: After airlines, the Tata Group is making a foray into airports. The conglomerate will invest Rs 3,555 crore for a 20% stake in GMR Airports, which runs the Delhi International Airport, the country’s biggest and Asia’s sixth largest.
The proposed stake-purchase has been routed through Tata Sons, which also owns majority stakes in two carriers—AirAsia India and Vistara. Tatas’ interest in the aviation business also includes charter services through Taj Air.
The Tatas follow billionaire Gautam Adani’s bet on the sector after his company won bids to operate six airports in the country last month. In the past, the Tatas had made attempts to enter this space and tied up with Singapore’s Changi and Heathrow airport operators to participate in the privatisation of airports in the country. However, the bids did not materialise due to multiple factors like rules that prohibit a company with interest in an airline from owning more than 26% stake in certain greenfield airports.
The Tatas are entering the space at a time when the country is facing a severe shortage of airport infrastructure and in the coming years, the sector is set for a massive expansion. Also, the Tatas have expansion plans for its airlines; the salt-to-software conglomerate will be the first to have a presence in both airlines and airports.
Besides the Tatas, Singapore wealth fund GIC and SSG Capital will invest Rs 2,666 crore and Rs 1,777 crore in GMR Airports for a 15% and a 10% stake respectively. The Tatas-GIC-SSG combined investment of Rs 8,000 crore in GMR Airports will be through a mix of fresh equity and purchase of shares from existing stakeholders.
The deal, valued at nearly Rs 18,000 crore, will bring the total debt of the GMR Group down by 40% to Rs 12,000 crore. After the sale, GMR, which also operates airports in Hyderabad and Cebu in the Philippines, will hold a 54% stake in the airport business. GMR is also in the process of developing greenfield airports in Goa and Crete in Greece.
The proposed stake-purchase has been routed through Tata Sons, which also owns majority stakes in two carriers—AirAsia India and Vistara. Tatas’ interest in the aviation business also includes charter services through Taj Air.
The Tatas follow billionaire Gautam Adani’s bet on the sector after his company won bids to operate six airports in the country last month. In the past, the Tatas had made attempts to enter this space and tied up with Singapore’s Changi and Heathrow airport operators to participate in the privatisation of airports in the country. However, the bids did not materialise due to multiple factors like rules that prohibit a company with interest in an airline from owning more than 26% stake in certain greenfield airports.
The Tatas are entering the space at a time when the country is facing a severe shortage of airport infrastructure and in the coming years, the sector is set for a massive expansion. Also, the Tatas have expansion plans for its airlines; the salt-to-software conglomerate will be the first to have a presence in both airlines and airports.
Besides the Tatas, Singapore wealth fund GIC and SSG Capital will invest Rs 2,666 crore and Rs 1,777 crore in GMR Airports for a 15% and a 10% stake respectively. The Tatas-GIC-SSG combined investment of Rs 8,000 crore in GMR Airports will be through a mix of fresh equity and purchase of shares from existing stakeholders.
The deal, valued at nearly Rs 18,000 crore, will bring the total debt of the GMR Group down by 40% to Rs 12,000 crore. After the sale, GMR, which also operates airports in Hyderabad and Cebu in the Philippines, will hold a 54% stake in the airport business. GMR is also in the process of developing greenfield airports in Goa and Crete in Greece.
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