The aviation ministry is preparing to sell its stakes in companies that operate airports in Delhi, Mumbai, Bengaluru and Hyderabad, a move that will help achieve the government’s target of raising ₹20,000 crore from monetisation of assets in FY22.
The ministry has started the process to fetch approvals, including those from the cabinet, to speed up the sale process.
Sources told ET that the issue was discussed at last month’s meeting of the core group of secretaries for asset monetisation (CGAM).
“The aviation ministry has an asset monetisation target of ₹20,000 crore for FY22. While privatisation of airports will contribute to that target, this move could become the largest contributor,” said an official who did not want to be named.
The CGAM meeting was attended by aviation secretary Pradeep Singh Kharola. Emails and messages sent to Kharola remained unanswered. Mails sent to the Department of Investment and Public Asset Management also remained unanswered.
The government, through the Airports Authority of India (AAI), owns 26% each in Delhi and Mumbai airports, and 13% each in Bengaluru and Hyderabad airports. Sources added that the move will not impact the revenue share arrangement that AAI has with Delhi and Mumbai airports.
Promoters’ Right of First Refusal
Delhi International Airport Ltd, which runs the Delhi airport, shares about 46% of revenues with AAI, while Mumbai International Airport Ltd shares 39%. These proceeds form a large part of the state-owned airport company’s revenue.
Bangalore International Airport (BIAL), which runs the airport in Bengaluru, and GMR Hyderabad International Airport that runs the airport in Hyderabad, do not share any revenues with AAI.
Sources added that the promoters of these airport companies have the right of first refusal (RoFR) in these projects. GMR Group is the promoter for Delhi and Hyderabad airports and Adani Group is the new owner of Mumbai airport. Fairfax Group is the promoter of BIAL.
Existing promoters at all these airport companies will likely exercise the respective RoFR options, buying the stakes from the government.
The government has set a target to raise ₹2.5 lakh crore through sale of assets under various ministries. It is also in the process of selling 100% in Air India, along with its subsidiary Air India Express, and 50% stakes in ground handling company AISATS and helicopter operator Pawan Hans Ltd. The stake sales in these companies, however, are not expected to fetch substantial amounts of money.
Source: Economic Times