GMR group secures ₹6,300 cr debt funding from Abu Dhabi’s ADIA

GMR Group has finalised an agreement with a subsidiary of the Abu Dhabi Investment Authority (ADIA) for an investment of ₹6,300 crore in the structured debt instruments of GMR Infra Enterprises Private Limited, according to an officla announcement made on October 23. GMR Group said that the transaction's completion is contingent on fulfilling certain conditions and receiving regulatory approvals.

Amid this development, shares of GMR Airports closed 2.2% higher, closing at ₹82.20, with a market cap of ₹86,794.78 crore. The stock opened flat today at ₹80.43 against the previous close price of ₹80.42.

The group informed that it plans to use the funds to refinance the entire external debt of GMR Enterprise Private Ltd (GEPL), which is the promoter of GMR Airports Ltd (GAL).

Additionally, this will reduce the GMR promoter group’s pledge on its shareholding in GAL. GMR Group manages three airports in India—Delhi, Hyderabad, and Goa—and operates two airports in the Philippines and Indonesia.

G M Rao controls GEPL, which serves as a promoter entity. GMR Group Corporate chairman Kiran Grandhi highlighted that the group has made substantial progress in lowering its corporate debt in recent years. Through this deal, GEPL aims to consolidate its loans from various lenders into a single source of capital.

According to the company's latest annual report, GMR Enterprises' total debt rose nearly 4% year-on-year (YoY), reaching ₹4,477 crore. ADIA has invested in Indian airport infrastructure, having previously supported GVK Airports with ₹7,600 crore in 2019, alongside PSP Investments and the National Investment and Infrastructure Fund.

As the UAE’s largest sovereign wealth fund, ADIA has also set up operations at Gujarat’s GIFT City with a fund of $4-5 billion dedicated to investments in India. The UAE remains India's largest Arab investor, contributing approximately $3 billion in 2023-24, making it the sixth-largest FDI source for that period and the seventh-largest since 2000. ADIA is a globally diversified investment institution that focuses on long-term value creation.

GMR Airports recently noted that certain media outlets have inaccurately reported the Supreme Court's October 18, 2024 judgement regarding the Appeals filed by the Airports Economic Regulatory Authority of India (AERA) against TDSAT decisions involving private airport operators, including GMR's Delhi International Airport Limited (DIAL). It informed that the judgement upholds AERA's authority over Non-Aeronautical Service tariffs.

“We would like to categorically clarify that the said Judgement has nothing to do with decision-making power of AERA over tariffs for Non-Aeronautical Services, but only upheld the ability of AERA to file an appeal challenging the TDSAT judgements in Supreme Court and participate as a party Appellant/Respondent as the case may be when such challenge to the TDSAT judgements is being heard in the Supreme Court,” the release added in a BSE release.