Fairfax India Holdings Ltd mulls Bangalore airport IPO
Prem Watsa’s Fairfax India Holdings Ltd is reportedly considering an initial public offering (IPO) for Bangalore International Airport that could value the asset at about Rs 30,000 crore.
According to a Bloomberg report, the Indian arm of Canadian investment group Fairfax Financial Holdings is working with an adviser on the potential listing that could occur as soon as 2023.
Fairfax India holds a majority stake in Bangalore International Airport Ltd (BIAL), which was formed in 2001 to operate the Kempegowda international airport for a 60-year concession period.
Private promoters hold a 74 per cent stake, while the Karnataka State Industrial & Infrastructure Development Corporation and Airports Authority of India hold 13 per cent each.
The international airport commenced operations on May 24, 2008 and the expansion of the terminal was completed in 2014. Fairfax holds around 54 per cent in the parent. As of June, more than 25 crore passengers visited the airport which serves 61 domestic and 14 international destinations.
The Bloomberg report added that the IPO may raise between Rs 3,000 crore and Rs 4,000 crore and it may consist of about 75 per cent primary shares and the rest in existing shares. However, since the developments are at a preliminary stage, Fairfax may also decide not to proceed with the share sale, the people said.
Subsequent reports said that Fairfax has denied plans to sell its stake in the Bangalore airport.
GMR Airports Infrastructure is the listed airport operator in India. GMR operates the Delhi and Hyderabad airports. The Adani group is the largest airport operator and this business is incubated within its flagship Adani Enterprises.
GMR Airport recently said that during the second quarter ended September 30, the passenger traffic at the Delhi airport improved 76 per cent from the previous year to nearly 1.49 crore and gross revenue increased 42 per cent over the year-ago period to Rs 961 crore.
On the other hand, the passenger traffic at the Hyderabad airport rose 75 per cent to 49 lakh, while its gross revenue increased 90 per cent from Rs 154 crore in the second quarter of 2021-22 to Rs 293 crore in the period ended September 30.
On the other hand, Adani Airports Holdings Ltd handled 1.63 crore passengers across its portfolio which it said is 90 per cent of the pre-Covid level.
The Adanis own eight airports of which one at Navi Mumbai is being developed. The rest are in Ahmedabad, Lucknow, Mangalore, Mumbai, Jaipur, Guwahati and Thiruvananthapuram. In the first quarter of this fiscal, these seven Adani airports carried 1.66 crore passengers.
Meanwhile, the government will increase the regional air connectivity levy charged from airlines operating on major routes to Rs 10,000 per departure from January 1, a move that could push the airfares higher.
Currently, the levy is Rs 5,000 per departure and the amount will further go up to Rs 15,000 from April 1 next year, according to a notification.