GMR Airports to issue ₹2,150 cr of non-convertible debentures to refinance Hyderabad airport debt, cut borrowing costs

“The next refinancing we are looking at is for the Hyderabad airport 2026 foreign exchange bonds, where the board has approved the issuance of NCDs in rupee denominations,” GAL Executive Director (Finance and Strategy) Sourabh Chawla said in the earnings call last week.

Switching to rupee NCDs from foreign currency bonds eliminate the risk of rising debt service costs if the rupee depreciates and stabilizes future payments. This type of refinancing also leads to a reduction in the interest burden and better conditions, especially if domestic liquidity is strong.

GMR Airport has not yet responded to questions Mint On details of debt refinancing of Hyderabad airport.

GMR Airports, the world’s second largest private sector In terms of passenger traffic, the airport operator had reduced borrowing costs through refinancing in the second quarter, and the benefits of this are expected to be seen in the coming quarters.

company upgraded ₹5,900 crore through non-convertible debentures in two tranches. first slice ₹1,500 crore carries a redemption premium of 5.225% and a coupon rate of 5% on its second tranche. ₹4,400 crore carries a 5% coupon rate and 5.425% redemption premium, the company said in its investor presentation.

“The non-convertible bonds were raised at 10.225% to 10.425% effective cost in two tranches of 18 months and 36 months maturity. This resulted in a savings of 300 basis points,” Chawla said. he said. “GMR Airports… used the proceeds to repay existing debt ₹5,000 crore along with redemption premium. ₹85 crore.”

According to Elara Capital analysts, by issuing NCBs, GAL reduced average borrowing costs by 395 basis points and extended maturities.

medium leverage

“These steps, coupled with stronger aero and non-aero cash flows and monetization of Aerocity and Goa assets, are expected to moderate leverage and improve return on capital employed in FY26-28,” Elara Capital analysts Ankita Shah, Hem Raval and Het Patel said in a Nov. 4 note. he wrote.

In a parallel movement, Delhi International Airport Ltd (DIAL) upgraded ₹1,000 crore at 8.75% for 15-year NCDs, replacing the previous debt carrying a coupon of 9.98% (an advantage of 123 basis points).

GAL also tapped ₹3,000 crore working capital loan to run newly acquired duty-free operations at Delhi and Hyderabad airports.

“These transactions significantly reduce our cost of capital and strengthen the maturity profile,” Chawla said.

Consolidated net debt of the company excluding foreign currency convertible bonds ₹2,630 crore ₹Increasingly to 34,000 crore ₹1,180 crore from the first quarter of FY26.

Net debt of Bhogapuram airport to be established in Visakhapatnam increased ₹310 crore QoQ, while this figure decreased at Delhi Airport ₹280 crore, Chawla said in the investor call.

GAL’s airports in Delhi, Hyderabad, Goa and Medan (Indonesia) together served more than 120 million passengers in FY25. The company reported ₹10,414 crore income and loss from operations in FY25. ₹816.90 crore.

Adani Airports, which operates eight airports in India, served 94.4 million passengers last year and ₹7,772 crore from operations. Adani Airport Holding Ltd. announced profit ₹866.71 crore. State Airports Authority of India is yet to announce its FY25 results.

strong momentum

Refinancing gains at GAL coincided with strong operating momentum in the second quarter. GAL’s total revenue increased ₹3,750 crore in the three months ended September, helped by revised tariffs at Delhi airport, takeover of cargo operations and transfer of duty-free businesses to direct control. Profit remained at this level ₹35 crore compared to the loss ₹430 crore a year ago.

Delhi Airport remained the main contributor, with aviation revenue rising 166% over the previous year following the implementation of revised tariffs from mid-April. Total revenue at the airport increased by 34%. Hyderabad airport recorded a 17% revenue growth, led by a 38% increase in non-aviation revenue.

Passenger traffic at GAL-operated airports fell 3.5% to 27.8 million in the second quarter due to airspace restrictions related to geopolitical events and runway improvements at Delhi, the country’s busiest airport. With the track now operational and winter routes restarting, the company expects an intake in October-December.

Work continues at Bhogapuram Airport, which has achieved 87.5 percent physical progress. ₹The 14,000-crore Hyderabad expansion plan, including a new terminal and cross taxiways, is expected to begin in calendar year 2027.