IPO for Airports Authority on cards

New Delhi: Even as the proposed IPOs for Air-India and Indian have been put on the backburner, the civil aviation ministry is now looking at an IPO for the Airports Authority of India (AAI).
The move is significant since it contains a proposal for Esops to employees of AAI, who have been protesting against corporatisation of Delhi and Mumbai airports. In case, the stock options plan is attractive, it will go a long way in mollifying AAI employees, who recently went on strike against handing over of Delhi and Mumbai airports to joint ventures controlled by private sector players. According to rough estimates, AAI’s assets are worth Rs 5,265 crore. The actual value unlocked by an IPO will be far higher as the market goes by the earnings potential rather than the `gross block’ valuation. As on April 1 this year, the `gross block’ of Delhi and Mumbai airports, respectively, is estimated to be around Rs 847 crore and Rs 911 crore.
The ministry feels that AAI should tap the capital market to raise funds to develop non-metro airports, which require huge investments to meet the ongoing boom in passenger as well as cargo traffic. The details of the IPO for AAI will be worked out once the civil aviation ministry obtains Union Cabinet’s approval for the public issue.
25/04/06 G Ganapathy Subramaniam & MK Venu/Economic Times

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