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Airports regulator restores airport development fee for DIAL
Airports Economic Regulatory Authority (AERA) has allowed charging Rs 200
to domestic passengers and Rs1,300 to international passengers as airport
development fee (ADF) at Delhi International Airport (DIAL) so as to collect
Rs12.3bn in Stage I and Rs7bn in Stage II. The company has planned to
securitise ADF in the next one month to repay short-term loans of Rs6bn,
which will reduce interest costs by around Rs720mn annually. We believe this
is a positive development for the stock and retain our Buy rating on it with a
SOTP-based target price of Rs39.
Key highlights:
AERA has restored levy of ADF at the rate of Rs200 per departing domestic
passenger and Rs 1,300 per departing international passenger so as to garner
Rs12.3bn in Stage I and incremental Rs7bn in Stage II. This levy was
suspended following a Delhi High Court order effective from 1 June 2011.
The collection of Rs12.3bn of ADF is to bridge the financing gap for approved
capex of Rs 118bn which was incurred until 31 March 2010. The collection of
incremental Rs7bn of ADF in Stage II is for certain costs which were not
incurred as on 31 March 2010, but was part of the project cost.
The company has planned to securitise ADF with the banks in the next one
month in order to repay short-term loans of Rs6bn, which were raised post
suspension of ADF levy by the Delhi High Court. This will bring interest costs
down by about Rs720mn annually.
AERA has approved capex of Rs118bn in Stage I, which is Rs10bn lower than
earlier approved capex. Out of the Rs10bn, Rs 7bn will be approved by the
AERA based on the company submitting proof of actual costs incurred. In
respect of the Rs1.5bn upfront fee, the company has reduced this amount from
the project cost and from the means of financing and thereby there is no impact
due to disallowance.
We believe this is a positive development for GMR Infrastructure and retain our Buy
rating on it with a SOTP-based target price of Rs39. Key contributors to our TP
comprise Rs20 from the airports business (including real estate), Rs14 from power
generation and coal mining, and Rs3 from the road segment.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Airports regulator restores airport development fee for DIAL
Airports Economic Regulatory Authority (AERA) has allowed charging Rs 200
to domestic passengers and Rs1,300 to international passengers as airport
development fee (ADF) at Delhi International Airport (DIAL) so as to collect
Rs12.3bn in Stage I and Rs7bn in Stage II. The company has planned to
securitise ADF in the next one month to repay short-term loans of Rs6bn,
which will reduce interest costs by around Rs720mn annually. We believe this
is a positive development for the stock and retain our Buy rating on it with a
SOTP-based target price of Rs39.
Key highlights:
AERA has restored levy of ADF at the rate of Rs200 per departing domestic
passenger and Rs 1,300 per departing international passenger so as to garner
Rs12.3bn in Stage I and incremental Rs7bn in Stage II. This levy was
suspended following a Delhi High Court order effective from 1 June 2011.
The collection of Rs12.3bn of ADF is to bridge the financing gap for approved
capex of Rs 118bn which was incurred until 31 March 2010. The collection of
incremental Rs7bn of ADF in Stage II is for certain costs which were not
incurred as on 31 March 2010, but was part of the project cost.
The company has planned to securitise ADF with the banks in the next one
month in order to repay short-term loans of Rs6bn, which were raised post
suspension of ADF levy by the Delhi High Court. This will bring interest costs
down by about Rs720mn annually.
AERA has approved capex of Rs118bn in Stage I, which is Rs10bn lower than
earlier approved capex. Out of the Rs10bn, Rs 7bn will be approved by the
AERA based on the company submitting proof of actual costs incurred. In
respect of the Rs1.5bn upfront fee, the company has reduced this amount from
the project cost and from the means of financing and thereby there is no impact
due to disallowance.
We believe this is a positive development for GMR Infrastructure and retain our Buy
rating on it with a SOTP-based target price of Rs39. Key contributors to our TP
comprise Rs20 from the airports business (including real estate), Rs14 from power
generation and coal mining, and Rs3 from the road segment.
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