GMR Airports Infrastructure boosts stake in Delhi International Airport with $126m acquisition

GMR Airports Infrastructure Limited (GIL), formerly GMR Infrastructure Limited, has signed a significant Share Purchase Agreement (SPA) with Fraport AG Frankfurt Airport Services Worldwide, marking a pivotal moment in the aviation sector. Through this agreement, GIL will purchase Fraport’s 10% minority equity stake in Delhi International Airport Limited (DIAL) for an estimated USD 126 million.

This acquisition will boost GIL’s current holding in DIAL from 64% to 74%, solidifying its position as the majority stakeholder. The Airports Authority of India (AAI) will retain its 26% stake, continuing its influential role in the airport’s operations. Despite this shift in ownership, Fraport’s operational role as the Airport Operator will persist under the existing Airport Operator Agreement and associated contracts.

Strategic Implications and Stakeholder Reactions

The proposed transaction is a strategic move by GIL, reflecting its ongoing commitment to consolidating its stake in core assets and enhancing its control over key infrastructure. G. B. S. Raju, Business Chairman (Airports) at GMR Group, acknowledged the crucial role Fraport has played, stating, “Fraport has been one of the original shareholders and has extended significant technical support to Delhi Airport as per their role of Airport Operator.”

Kiran Kumar Grandhi, Corporate Chairman of GMR Group, emphasized the strategic importance of the acquisition: “The acquisition of an additional stake in DIAL is in line with our objective of consolidating our presence in core assets of the Group and signifies the importance of Delhi Airport in the overall Group portfolio.”

Regulatory and Approval Process

The transaction is subject to approval from the AAI and GIL’s shareholders, as well as customary closing conditions. The deal is expected to be finalized within 180 days of the SPA’s execution. This step is crucial as it aligns with SEBI regulations concerning related party transactions, ensuring transparency and compliance in the process.

Fraport’s Continued Role

Fraport’s continued involvement as the Airport Operator is notable. The company has been instrumental in developing and operating major international airports and has provided significant technical expertise to Delhi International Airport since its inception. Fraport’s ongoing role underlines the importance of their operational experience in maintaining high standards at one of India’s busiest airports.

Background on Delhi International Airport Limited

Delhi International Airport Limited, a joint venture between GIL, the Airports Authority of India (AAI), and other stakeholders, operates one of the largest and busiest airports in India. The airport has seen significant growth and development over the years, becoming a major hub for both domestic and international flights.

The acquisition not only strengthens GIL’s foothold in the Indian aviation sector but also underscores its strategic vision for expanding and consolidating its infrastructure portfolio.