Sunday, October 09, 2022

Delhi International Airport to raise up to Rs 1,600 cr via debentures

Mumbai: In tweaking of fund raising plans, Delhi International Airport Limited (DIAL), a GMR group entity, will raise upto Rs 1,600 crore through Debentures to finance balance capital expenditure for capacity expansion by September 2023. Till end of August 2022, had incurred Rs. 7,765 crore of the project cost.

The pending project cost of Rs 3,785 crore is expected to be funded through the proposed NCDs (alternative to lease financing loan), real estate security deposits (RSDs) and cash in hand earmarked for project.

DIAL is currently undertaking a large capital expenditure (capex) programme to increase the passenger capacity to 100 million by September 2023. The capex timeline has been revised to September 2023 from June 2022 because of the COVID pandemic.

Given the significant decline in internal accruals owing to the Covid-19 disruptions in FY2021 and FY2022, the company raised additional debt through the issuance of bonds in March 2021 and June 2022.

Icra has assigned "A+" rating with outlook positive for proposed Non-convertible Debentures (NCD). The rating agency also affirmed "A+" rating for exisiting working capital limits, debentures and non-fund based limits and revised outlook revised from 'Stable' to 'Positive' from Stable.

The outlook revision to Positive on the long-term rating reflects expectation that the credit profile of the company is likely to witness improvement in the near to medium term in the backdrop of ramp-up in traffic.

The ratings continue to derive strength from the significant competitive advantage enjoyed by DIAL, given the dominant position of the Indira Gandhi International Airport (IGIA) as the largest Indian airport in terms of passenger traffic. Any significant cost overruns in the ongoing capex or a material disallowance of capex cost by the the Airports Economic Regulatory Authority of India (AERA) will be a credit negative, ICRS said.

With large bullet repayments falling due in FY2026 (Rs 3,257 crore), FY2027 (Rs 3,494 crore), FY2028 (Rs 1,000 crore) and FY2030 (Rs 3,500 crore), DIAL remains exposed to high refinancing risks.

09/10/22 Abhijit Lele/Business Standard

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