IPO-bound AAI hires KPMG for valuation

The Airports Authority of India (AAI) has appointed consulting firm KPMG to value the organisation prior to its listing on the stock exchanges through a public offer.
“KPMG would give its report in six months. As per our estimates, our assets should be valued at a minimum of Rs 100,000 crore,” a senior AAI official, who did not wish to be identified, told ET. AAI currently owns and runs 92 airports and 28 civil enclaves at defence airports in the country.
The proceeds of the initial public offer (IPO) would part-fund the development works of 35 non-metro airports and the two major airports in Kolkata and Chennai.
Civil aviation minister Praful Patel had recently said the government would corporatise AAI and list it after amending the AAI Act. This is a first tentative step towards the IPO. AAI has not even decided on the size of the public offer.
It, however, needs to raise equity quickly, both to bring more equity funds and also to leverage the higher equity base to raise more debt. The AAI’s airport modernisation works involve an investment of Rs 12,434 crore during the current Five-Year Plan ending March 2012.
The AAI is also trying to increase its non-aeronautical revenue and raise it to global standards. Most of the world’s big operators generate nearly 70% of their revenue from non-aeronautical sources such as retailing of food and beverage, car parking, shopping complexes and hospitality districts around the airport.
23/12/09 Faizan Khan & Nirbhay Kumar/Economic Times

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Categories: Airports Dec 2009