Following its plan for IPO, which is slated for next year, the Airports Authority of India (AAI), has decided to go ahead for fresh valuation of its assets. The organisation has already appointed KPMG as a consultant that had valued its land assets to the tune of R20,000 crore. AAI chairman VK Agarwal has said the organisation is revisiting its earlier estimates.
?The valuation is said to be about R80,000 crore,? said Agarwal. Further, it is also working out on a new business plan before the IPO. ?Though KPMG had earlier done the valuation, a strong business plan was still missing. Hence, we have decided to go in for fresh valuation with a new business plan, as we feel that the valuation to be close to R80,000 crore,? he said while speaking to the media on the sidelines of a two-day GMR Aviation Security Summit in Hyderabad.
He said that the proposed IPO comes at a time when revenues from the airports have suffered revenue loss on account of decline in air passengers and aircraft movement. “The proceeds of the IPO would help the organisation to part-fund the development of two major airports one in Kolkata and Chennai and 35 non-metro airports. Each non-metro airport approximately requires about R400 crore. Currently, AAI is an authority and the AAI Act has to be amended in the Parliament so as to transform into a company,” he added.
Incidentally, corporatisation would give AAI access to funds, formulate strategies and enable it function as an entity accountable to a board of directors. ?We have to go through the government and taken necessary permissions after getting the business plan. The listing process may take one year,? he said.
AAI owns and manages 125 airports across the country and is seeking approximately R12,000 crore during the Eleventh Five-Year Plan to modernise and develop non-metro airports to handle growing air traffic. Developing 35 other airports in tier II cities was part of Eleventh Five Year Plan. Out of which, 22 airports have been completed, while the remaining are in the process of completion and commissioning.
In the forthcoming 12th Plan, AAI will focus on other uncovered airports. ?We want to activate those, which have become inactive. Right now, 85 airports are operational, of which 15 to 20 can be reactivated in the next phase after the completion of bigger airports,? Agarwal said. Around R3,000 crore would be required and so far we have not finalised on the investment. We are also raising loan of R2,000 crore, and so far we have borrowed R1,000 crore and the remaining R1,000 will be borrowed next year, he added.