The government anchored National Investment and Infrastructure Fund (NIIF) is planning to aggressively leverage opportunities in the Indian aviation sector by taking up stake in various state airports.
Business Standard has reported that the fund has bid for four out of six airports that the government put up for privatisation. These include Ahmedabad, Jaipur, Lucknow and Mangaluru. Sources told the paper that NIIF has tied up with Zurich Airport to bid for the airports.
“The equity structure for the tie-up is yet to be finalised,” a person aware of the development told the paper.
The government invited bids for six state airports -- Ahmedabad, Jaipur, Lucknow, Mangaluru, Guwahati and Thiruvananthapuram – to allow private players to operate and maintain the airports for 50 years. The winner will also be responsible for developing city side infrastructure.
NIIF is owned by government of India (49 percent) along with global and domestic institutional players. The fund has investment "mandate to invest in infrastructure assets and related businesses" that are projected to see "long term growth trajectory".
The report further said that NIIF is also in talks with GVK Group and South Africa based Bidvest group to buy a stake in Mumbai International airport coupled with buying stake in Greenfield airports like Bhogapuram (Odisha).
"The NIIF is bullish about the growth in the airport sector. They are in talks with global airport companies and other investors looking to bid for projects across the country," a source told the paper.
GVK group, the majority stake holder (50.5 percent) in Mumbai’s Chhatrapati Shivaji International Airport, is looking to sell a portion of its stake due to high debt burden. Bidvest, owner of 13.5 percent stake in the airport, is also looking at selling its stake.
Bhogapuram airport, which is expected to be built at Rs 4,200 crore, will be second airport in Odisha. The fund has tied up with German airport operator – AviAlliance – to operate and maintain the airport.
The Indian aviation sector has been growing in double digits, growing 18.6 percent Y-o-Y in 2018. It is seventh largest aviation market in the world at present and is poised to become third largest aviation market by 2040.
According to government’s Vision 2040 document, India will need close to 200 airports, up from current 67, over the next two decades to accommodate 1.1 billion passengers.
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