The long-awaited measure of corporatising and listing the Airports Authority of India (AAI) on the bourses is unlikely to be completed by the end of the current financial year as planned by the Ministry of Civil Aviation (MoCA).
A senior official in the Airports Authority of India (AAI) said, “We have to hive off air navigation services (ANS), form a company, get it rated and then go for listing. All this will take at least three years, if not longer.”
Earlier this year, AAI kicked off the divestment process and subsequent listing on the bourses by hiring SBI Caps to guide them through the process. However, AAI insiders point out that the biggest hurdle that has emerged in corporatising AAI is its huge land bank. AAI has 58,000 acres of land dotting the country.
Civil aviation minister Ashok Gajapati Raju Pusapati had announced plans to corporatise AAI and list it on the stock exchange in a bid to improve transparency and efficiency in November 2014. He had declined to specify a time line for the same. However, then civil aviation secretary V Somasundaram had indicated that it could take up to six months.
AAI is the country’s largest airport operator and owns and maintains 125 airports comprising 68 operational airports and 26 civil enclaves. The company has been making profits since its inception and posted net profits of Rs 735 crore and Rs 796 crore during 2012-13 and 2013-14, respectively. The operator’s profits have soared on hefty fees from joint ventures that operate the Delhi, Mumbai, Bengaluru and Hyderabad airports. AAI’s fees from the Delhi and Mumbai airports have more than doubled from Rs 1,035 crore in 2010-11 to Rs 2,673 crore in 2013-14.
This money has helped it modernise the Kolkata and Chennai airports, as well as other smaller ones, on its own. In 2012-13, AAI invested Rs 1,800 crore in developing airport infrastructure.
Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, said, “Listing will allow AAI to raise funds and not be dependent on government. It will get a chance to unlock its hidden potential, especially in non-aeronautical revenue. Also, there will be greater transparency, professionalism and commercial orientation in the company. This means the long pending hive off of AAI’s Air Navigation Services into an independent corporate body may also happen.”
The government has appointed former law secretary NK Chaturvedi as a consultant to recommend measures to spin off ANS from the state-owned airport operator.
Maintains 125 airports
* AAI is the country’s largest airport operator and owns and maintains 125 airports comprising 68 operational airports and 26 civil enclaves.
* The company has been making profits since its inception and posted net profits of Rs 735 crore and Rs 796 crore during 2012-13 and 2013-14, respectively.