Moody’s downgrades DIAL rating by one notch to Ba3

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Updated: March 26, 2020 1:04:51 PM

DIAL — a joint venture led by GMR Group (54%), state-run Airports Authority of India (26%), Fraport AG (10%) and Eraman Malaysia (10%) — is the concessionaire for New Delhi’s Indira Gandhi international airport.

To make matters worse, under the existing ‘base airport charge’ regime, DIAL will have to continue levying minimum tariff permitted over the control period through to the end of FY24, and will be unable to recoup the lost revenue through higher tariffs. (Reuters image/ File)To make matters worse, under the existing ‘base airport charge’ regime, DIAL will have to continue levying minimum tariff permitted over the control period through to the end of FY24, and will be unable to recoup the lost revenue through higher tariffs. (Reuters image/ File)

Moody’s Investors Service on Wednesday downgraded the credit quality rating of Delhi International Airport (DIAL) by one notch to Ba3, mainly due to rising debts amid increasingly stringent global and nation-wide travel restrictions induced by the coronavirus outbreak. To make matters worse, under the existing ‘base airport charge’ regime, DIAL will have to continue levying minimum tariff permitted over the control period through to the end of FY24, and will be unable to recoup the lost revenue through higher tariffs.

DIAL — a joint venture led by GMR Group (54%), state-run Airports Authority of India (26%), Fraport AG (10%) and Eraman Malaysia (10%) — is the concessionaire for New Delhi’s Indira Gandhi international airport.

“The downgrade to Ba3 reflects our expectation of a sharp decline in passenger and aircraft traffic at Delhi Airport in the coming months and the uncertainty over the timing and extent of a recovery, which coincides with increased debt issuance as the airport enters the peak stage of its Rs 9,800 crore expansion project,” said Moody’s vice-president Spencer Ng.

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