Tata Group, GIC and SSG to invest Rs 80 billion in GMR Airports Limited

A consortium of the Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management will invest Rs 80 billion ($1.15 billion) to buy a 44 per cent equity stake in GMR Airports Limited, the operator of Delhi airport. GMR Infrastructure, the parent company of GMR Airports, will use the entire amount to bring down its debt to Rs 120 billion from Rs 200 billion and will demerge the division into a stand-alone airport business. Post the sell-off, the Tata Group will hold a 20 per cent stake in the airport unit, while GIC will get 15 per cent and SSG 10 per cent. Once the deal is finalised, GMR Airports will be valued at Rs 180 billion. GMR Infrastructure will retain management control of the airport unit with a stake of 53.5 per cent. GIC will infuse about Rs 26.7 billion and SSG Rs 17.8 billion, taking the total private equity component to Rs 44.5 billion ($646 million). This will make it the biggest private equity deal in the country’s airport sector in both rupee and dollar terms. To clinch the deal, the Tata-GIC-SSG trio has beaten Mitsubishi, which was also in advanced talks with GMR for buying an equity stake.

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