Shares of GMR Airports Infrastructure Ltd edged higher on September 10 after the company announced that it has entered into an agreement with Fraport AG Frankfurt Airport Services Worldwide to acquire its 10 percent stake in Delhi International Airport Limited (DIAL).
The said acquisition would be for a negotiated aggregate consideration of $126 million, GMR Airports said.
GMR Airports Infra currently holds 64 percent of the paid-up capital of DIAL and post the proposed acquisition, its stake in DIAL would increase to 74 percent. Airports Authority of India (AAI) continues to holds 26 percent stake in DIAL.
Jefferies has issued a buy call on GMR Airports stock with a target price of Rs 106 per share, citing the Delhi International Airport (DIAL) deal as attractively priced. The Airports Authority of India will continue holding a 26 percent equity stake in DIAL.
While Jefferies has not yet reviewed the sum-of-the-parts (SOTP) valuation for the company due to the ongoing closure of the deal, the international brokerage noted that over 50 percent of GMR Airports' valuation in their SOTP model comes from DIAL.
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Post transaction, Fraport’s appointment as the airport operator of DIAL shall continue to be governed by the Airport Operator Agreement and/or any other agreement(s) executed in relation to its role as the airport operator, the company said in a disclosure to the exchanges.
The transaction, subject to the AAI’s approval and approval of GMR Airports Infra shareholders, is expected to be concluded within 180 days from the date of execution of the said agreement date.
At 9:19 am, GMR Airports Infrastructure shares were trading over a percent higher at Rs 92.50 on the National Stock Exchange (NSE). The stock has gained 13 percent so far this year, largely in line Nifty's returns of 14 percent. The stock has gained 42 percent in the past 12 months, compared to a 28 percent rise in Nifty during this period.
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