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Airports Authority of India IPO next year

— PHOTO: NAGARA GOPAL

ACCESSING FUNDS:Kiran K. Grandhi (left), Chairman, Airports, GMR Group, presenting a memento to V. P. Agrawal, Chairman, Airports Authority of India, at a summit in Hyderabad on Friday.

HYDERABAD: The Airports Authority of India (AAI) will come out with its initial public offering (IPO) sometime next year, said its Chairman V. P. Agrawal.

Speaking on the sidelines of a two-day GMR Aviation Security Summit, he said consultant KPMG had valued its assets at Rs.20,000 crore, while the authority per se estimated that the valuation should be a minimum of Rs.80,000 crore.

The mismatch, while being unacceptable, did not apparently take the business plans of the AAI to add value for its assets, he said.

Only when the right evaluation came through could they go ahead with having a strong business plan in place, ahead of the IPO.

For AAI to be made a company, the AAI Act had to be amended in Parliament, he said, adding that they would go through the government and obtain the required permission after getting the business plan in place.

“The listing process may take about a year,” he said.

The IPO proposal comes at a time when revenues from airports are dipping due to the decline in air passengers and aircraft movement. Its proceeds could help AAI to part-fund development of the two major airports at Chennai and Kolkata, apart from 35 other non-metro airports, each of which needed Rs.400 crore, he said.

Of the 35 other airports in Tier-II cities being developed as part of the XI Plan, he said 22 were completed and the remaining were in various stages of commissioning. “We will complete them in a year and the expansion will be six to eight times bigger than the airports' original size,” he said.

The corporatisation will give AAI access to funds, formulate strategies and enable it to function as an entity accountable to a board of directors, he said.

Asked about radio-active screening at airports, Mr. Agrawal said the Central Government had decided to get it done through the Electronics Corporation of India and that it was for the Home Ministry to put it through.

As for the Begumpet airport, it is likely to be used as a training facility and will house flying institutes. He said whatever was decided it had to be related to flying only and added that maintenance and repair organisations (MRO) could come up. He said an aircraft manufacturer had already come up with a proposal for setting up an MRO.

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