HYDERABAD, May 7: Delhi International Airport Ltd, a
GMR group company, plans to raise USD 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, Moodys said.
“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
USD350 million,” 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.
After accounting for the proposed USD notes, Moody’s
expects that DIAL’s funds from operations/debt would remain
weak over the next 2-3 years, with a very limited buffer above
the minimum tolerance level of 3-4 per cent Moody’s said.
Moody’s base case financial projections assume that
aeronautical tariffs would stay at the current level during
the third regulatory period between April 2019 and March 2024
and there was no material uplift to the airport’s financial
position arising from its arbitration proceedings with the
Airports Authority of India on the calculation of the 45.99
per cent concession fee.
Despite its elevated leverage position, DIAL’s liquidity
position is strong, with cash holdings and short-term
investments totaling Rs 2600 crore as in March 2019 and these
assets provide the airport with additional financial
flexibility over the next 12-18 months, the agency opined.
DIAL is the concessionaire for Indira Gandhi
International Airport, under an Operations, Management and
Development Agreement, entered into in 2006 with the Airports
Authority of India. (PTI)