Not GMR, not GVK. The big daddy of airport stocks will hit Dalal Street next year. State-run Airports Authority of India (AAI) will be corporatised --- turned into a company --- and hit the IPO trail, civil aviation minister Praful Patel said on Tuesday.
“We plan to corporatise AAI by March next year,” Patel told reporters. “The objective is to list the company eventually as it will help the entity generate equity for development of airports across the country.”
Corporatisation of AAI would pave the way for it to raise funds, formulate strategies and enable it function as an entity accountable to a board of directors. The department of telecom had undertaken a similar exercise to create Bharat Sanchar Nigam Ltd (BSNL).
Patel said AAI has a huge asset base and nearly 120 small and large airports under its ambit that would allow it good valuation in the bourses. “If AAI has to develop a large number of airports it will need to generate funds,” he said. “And on being corporatised, generating funds would not be a problem.”
The Rs. 4,000 crore AAI is developing 35 airports including those at Kolkata, Chennai, Indore, Bhopal, Ranchi, Raipur, Goa, Amritsar, and Dehradun, the cost of which adds up to Rs. 6,000 crore.
“The development of airports including Kolkata and Chennai will need huge investments and corporatising the entity will help it raise the required finances,” Patel said.
AAI has earmarked a capital expenditure of Rs. 3,000 crore for the new financial year that started in April 2009, of which Rs. 1,000 crore would be funded through internal accruals and rest through debt --- it plans to raise Rs. 5,000 crore through issuance of bonds later this year.
Going beyond AAI, Patel said “All is well with Air India.” He did not elaborate further.
AAI was formed in 1995 by merging the International Airports Authority of India and the National Airports Authority with the mandate to expand and modernise airports in the country.