Tata, GIC join $1.1b investment in India's GMR Airports
Tata Group, GIC Private, and special situations investor SSG Capital have formed a consortium to invest INR80 billion ($1.1 billion) in India’s GMR Airports (GAL). It will facilitate a number of private equity exits.
Tata has agreed to invest INR35.6 billion for a 20% stake, while GIC and SSG will provide INR26.7 billion and INR17.8 billion for 15% and 10% interests, respectively. The deal, which is said to be the largest-ever PE investment in India’s airport segment, values GAL at approximately $2.6 billion.
It will provide exits for a group of investors holding a combined 5.8% stake, including SBI Macquarie, Standard Chartered Private Equity, and JM Financial Old Lane. This group received INR35.6 billion in cash plus additional equity from GAL last year after the company failed to deliver a liquidity even within an agreed timeframe ending in 2015. The investors committed about INR15 billion to GAL in 2011 and 2012, helping expand the company’s portfolio of airport assets from two to six.
GMR Infrastructure, the parent company of GAL, will continue to hold a 54% stake in GAL. Following the transaction, it intends to separate the airport business by demerging its energy, urban infrastructure and transportation, and highways divisions. GMR says the airport portfolio has a passenger capacity of 159 million across operational and developing assets. This includes the largest and busiest airport in India in New Delhi, as well as at least seven Indian and international greenfield projects.
Tata operates two airlines in India, Vistara and AirAsia India. GIC has made a number of investments in air infrastructure and services globally, including Heathrow Airport in the UK, Impulse Airlines in Australia, and Beijing Capital International Airport. SSG was active in this space as recently as 2017 with the acquisition of a 34% stake in a subsidiary of Cox & Kings, an Indian travel company that has operations in 22 countries and is said to be the oldest company in the global travel industry.
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