GMR to raise $350 mn for Delhi airport expansion

Hyderabad: Delhi International Airport Ltd, a GMR group company, plans to raise $350 million through 10 year senior secured bonds for the airport expansion programme and Moody's has assigned a Ba2 rating for the proposed bonds.

Proceeds from the proposed bond would be used to help fund a major expansion to increase the passenger handling capacity of Indira Gandhi International Airport to up to 100 million passengers per annum, which the company expects would cost up to Rs 98 billion (Rs 9800 crore) over a three-year development phase, Moody'ssaid.

"Moody's Investors Service has assigned a Ba2 senior secured rating to Delhi International Airport Limited's (DIAL, Ba2 stable) proposed 10 year senior secured bond of up to $350million," the rating agency said.

The proposed bond's Ba2 senior secured rating reflects the airport's strong market position and robust passenger traffic, which would likely grow at a high single-digit percentage per annum over the next 18 months under Moody's base case scenario, it said.

The rating agency however, said Delhi Airport's ratings are constrained by its planned capacity expansion, which would exert downward pressure on its financial metrics, the evolving regulatory environment in India and its obligation to pay 45.99 per cent of its revenue to the Airports Authority of India as a concession fee.