ADIA, NIIF invest in airport business of India's GVK

The investment will consist entirely of newly issued shares in GVK Airport Developers (GVKADL) and GVK Airport Holdings (GVKAHL), according to a statement. Financial terms have not been disclosed. Proceeds from the transaction will be used to pay down GVK’s debt obligations of up to INR57.5 billion ($825.6 million).

GVKAHL currently manages the primary international airport in Mumbai, and GVKADL is building a new facility for the growing city of Navi Mumbai. The Mumbai airport reported INR33.4 billion in revenue for the year ended March 2018, up from INR30.3 billion the prior year; over the same period it went from a net loss of INR898 million to a net profit of INR354 million. GVK’s overall revenue for the same period grew from INR40.5 billion to INR48.7 billion, while its net loss shrank from INR13.4 billion to INR5.4 billion.

The parent company has frequently used its airports businesses as a means to shore up its balance sheet in recent years. Prior examples include the sale of GVKAHL’s stake in Bangalore International Airport to Fairfax India Holdings across two transactions in 2017.

India’s government launched NIIF in 2015 to mobilize foreign investments in the country’s transportation, energy, and urban infrastructure sectors. The fund’s vehicles include a mother fund and several subsidiary funds, with a total fundraising target of about INR400 billion.

ADIA is an investor in the initiative’s Master Fund, which backs mature businesses with long-term track records. Previous investments by the sovereign wealth fund in India’s infrastructure space include Greenko Energy Holdings, a renewable energy developer backed by Singapore’s GIC Private.

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• Topics
• South Asia
• Infrastructure
• Expansion
• India
• National Investment Infrastructure Fund (NIIF)
• Abu Dhabi Investment Authority (ADIA)
• Growth capital