Oct 17, 2012, 01.52 PM IST
Scrapping of airport development fee (ADF) at Mumbai and Delhi airports will leave a funding gap of around Rs 4,200 crore and Rs 1175 crore on GVK and GMR-both operators of Mumbai and Delhi airports.
Scrapping of airport development fee (ADF) at Mumbai and Delhi airports will leave a funding gap of around Rs 4,200 crore and Rs 1175 crore on GVK and GMR -both operators of Mumbai and Delhi airports.
ADF is collected from passengers for funding or financing the costs of upgradation, expansion or development of an airport
The civil aviation ministry which issued a statement yesterday on scrapping ADF has also directed the Airports Authority of India (AAI) which also has a 26% stake in each of these airports to infuse addition equity into the Mumbai, Delhi airport modernization projects.
This announcement, likely to come into effect from Jan 1, will further strain financials of GVK and GMR which are already incurring losses in their airport business segments. Both companies have in separate statement said that they are evaluating the impact of this development on their respective projects and are in consultation with stakeholders and will revert to the authorities in due course of time.
Currently, Delhi airport collected Rs 200 per domestic passenger and Rs 1,300 per international passenger are being charged as ADF at Delhi Airport and Rs 100 per domestic passenger and Rs 600 per international passenger at Mumbai airport.
Both GMR and GVK had a cost-over run of atleast 22% on their projects and have time and again informed the airport regulator about levying user development fee to passengers. Since the Delhi airport modernization is complete, GMR has started charging UDF from passengers. Mumbai airport's upgradation is also nearing completion.
GMR has an a debt of around Rs 9,000 crore for its airport division and GVK has a debt of around Rs 2000 crore
GVK Power stock price
On December 04, 2013, GVK Power & Infrastructure closed at Rs 7.58, up Rs 0.00, or 0.00 percent. The 52-week high of the share was Rs 15.75 and the 52-week low was Rs 5.52.
The latest book value of the company is Rs 15.84 per share. At current value, the price-to-book value of the company was 0.48.
Tags: Scrapping of airport development fee (ADF) at Mumbai and Delhi airports will leave a funding gap of around Rs 4, 200 crore and Rs 1175 crore on GVK and GMR-both operators of Mumbai and Delhi airports.
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