Delhi International Airport Limited (DIAL), a consortium led by the GMR Group, plans to raise $350 million through 10-year senior secured bonds to fund the expansion of the country's busiest airport, PTI reported. Rating agency Moody's has assigned a Ba2 rating for these proposed bonds.
The proceeds will be used to expand the Indira Gandhi International Airport in a major way to increase its passenger handling capacity to 100 million passengers a year. The plan is expected to cost up to Rs 98,000 crore and take three years.
Ba2 senior secured rating reflects the airport's strong market position and robust passenger traffic that Moody's said is likely to grow at a high single-digit percentage per annum over the next 18 months under its base case scenario.
The rating agency further said that Delhi Airport's ratings were, however, constrained by its planned capacity expansion, the evolving regulatory environment in India and its obligation to pay 45.99 percent of its revenue to the Airports Authority of India as a concession fee, exerting downward pressure on its financial metrics. After accounting for the proposed USD notes, Moody's expects that DIAL's funds from operations/debt would remain weak over the next 2-3 years, with a very limited buffer above the minimum tolerance level of 3-4 percent Moody's said.
With inputs from PTI