GMR Airports raises Rs 2,250 crore from finance companies, private credit investors

Mumbai: GMR Airports (GAL), which operates aviation facilities in Delhi, Hyderabad and North Goa, raised ₹2,250 crore from finance companies and private credit investors last week, said people with knowledge of the matter. The funds were raised at 13.275% in the form of listed, unsecured, rated, non-convertible bonds for two years and ten months. GMR Airports will pay 5% as a cash coupon and 8.275% as a redemption premium.

JP Morgan Securities Asia Pacific invested ₹830 crore while Tata Capital ₹800 crore, Sachin Bansal-promoted Navi Finserv ₹300 crore, and HSBC ₹200 crore from its branch in Gujarat International Finance Tec-City (GIFT City), people cited above said.

Aditya Birla Capital invested ₹100 crore, and Varde Partners, through its vehicle named Credit Solutions India Trust, invested ₹20 crore.

HSBC and JP Morgan declined to comment. GMR, Varde, Navi Finserv, Tata Capital and Aditya Birla Capital did not respond to ET's query. The company has a net debt of about ₹25,000 crore on its books, and a chunk of it is high-cost debt. For the October-December quarter, its finance cost increased by about 45% to ₹857 crore pulling it down to a net loss.

"GAL has a higher cost of interest. And the reason is that GAL, as on date, does not have cash flows. Those cash flows will emerge over the next 3 to 5 years. The debt that has been taken at GAL is primarily for investment into the assets. So, it's basically equity funding, your financing for the equity investment over there," said Saurabh Chawla, finance and strategy head, GMR Airports, at a recent analysts call.

This was the last tranche of the ₹5,000 crore borrowing approved by its board last October.

GMR Airports has repayments of ₹1,974 crore due between June and September 2024, according to the bond document. The proceeds of the bonds will be used to refinance this debt and invest in its subsidiaries and joint ventures.

"At each round of financing, the interest rate has moved down," said Chawla.

The GMR Group has eight airport assets under operation or in various stages of development, and another one for which it has won the bid.

"We have been continuously monitoring interest rates.

In the case of Goa, which we have just completed, it is less than 10% for five-year fixed NCDs. In Hyderabad, we have raised 8.75% and in Delhi, it is 9.75%. These are very competitive interest rates. Even in the case of the GMR Airports, we have been substantially reducing our interest costs," CFO GRK Babu told analysts.

GMR's Delhi, Hyderabad, North Goa and Cebu in the Philippines are operational, while Bhogapuram (Andhra Pradesh), Bidar (Karnataka), Crete (Greece) and Medan (Indonesia) are under development. It has won the bid for the Nagpur airport but is yet to be awarded the project.




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