GMR Airports to buy Malaysia Airports' 11% stake in GMR Hyderabad Airport for $100 mn

Global infrastructure major GMR group comprising GMR Airports Ltd and group subsidiaries have entered into a share purchase agreement with Malaysia Airports Holding Berhad (MAHB) and MAHB’s wholly owned subsidiary, MAHB (Mauritius) Private Ltd for the acquisition of their 11% equity stake in GMR Hyderabad International Airport Ltd (GHIAL) for $100 million.

GMR Airports currently holds 63% stake in GHIAL, while the government of Telangana (GoT) and the Airports Authority of India (AAI) hold 13% each in the equity stake in the company. Post the proposed acquisition, GMR Airports' stake will increase to 74%.

The transaction is expected to be concluded in 135 days from the date of execution of the agreement between both companies. “MAHB has been one of the original shareholders and have been partners in our Airport journey. They have extended technical support during the initial years of both Delhi and Hyderabad Airports,” says G B S Raju, Business Chairman (Airports), GMR Group.

As per the corporate chairman of GMR Group, Kiran Kumar Grandhi, the acquisition of an additional stake in GHIAL will help it consolidate its presence in "core assets".

The transaction with the MAHB group, being a shareholder of GHIAL, will be a "related party transaction" for GAL as per the SEBI norms, says the company. GHIAL is currently a subsidiary of GAL, the company and one of its promoters GMR Enterprises Private Ltd.

The GMR group expertises in designing, building, and operating airports, and has a significant presence in sectors like energy, transportation, and urban infrastructure.

GMR Airports, a subsidiary of GMR Airports Infrastructure, operates the Delhi airport, the largest and fastest-growing airport in India. It also runs Hyderabad Airport and New Goa Airport.

Overseas, GMR Airports is developing and operating Kualanamu International Airport in Medan, Indonesia, with Angkasa Pura II (AP II). It is also providing technical services to the second busiest airport in the Philippines, Mactan Cebu International Airport in Cebu.

The group is currently developing two major greenfield airport projects in India and Greece -- Bhogapuram Airport and Crete Airport.

Despite the positive development, shares of GMR Airports dipped marginally at 0.33% to ₹54.08 on the BSE, in line with broader market. The share opened at ₹54.26 and fell to ₹53.16 before settling at 54.13. At the current share price, GMR Airports' m-cap stands at ₹32,672.57 crore.

The company's board is scheduled to meet on October 27, 2023, to announce the financial results for the quarter and half year ended September 30, 2023.

In its monthly traffic updates for September, GMR Airports recently said its passenger traffic in Delhi surged 14% year-on-year to 5,802,348, while the passenger traffic in Hyderabad surged 21% to 1,969,753. Medan Airport in Indonesia and Cebu Airport in the Philippines recorded a 14% and 57% surge in overall traffic for the month.

"Delhi Airport reaches another milestone of handling highest ever half-yearly pax traffic -- cross 35 million mark in H1 FY24; Hyderabad airport reaches another milestone of handling highest ever half-yearly pax traffic -- crossed 12 million mark in H1 FY24," GMR Airport said.