Govt defers sale of AAI’s residual stakes in 4 joint venture airports

The Finance Ministry has decided to defer the sale of AAI's residual stakes in four private joint venture airports as the valuations could be lower now

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Govt defers sale of AAI's residual stakes in 4 joint venture airports

New Delhi: The government has decided to temporarily defer the proposed sale of AAI’s stakes in the private joint ventures operating the airports at Delhi, Mumbai, Hyderabad and Bangalore, said a senior official. “State-owned Airports Authority of India’s (AAI) residual stakes in the four major airports are to be sold under the government’s ambitious National Monetisation Pipeline (NMP) that was announced in August last year,” the official said. AAI holds 26 percent stake each in joint ventures that operate Delhi and Mumbai airports. It also owns 13 percent shareholding each in the joint ventures that operate Hyderabad and Bangalore airports. For determining the indicative value of AAI’s stake in the four private joint ventures, a market approach has been adopted.

‘FinMin decides to defer sale of AAI’s residual stakes as valuations could be lower now’

The senior government official also said that the Finance Ministry has decided to defer the sale of the AAI’s residual stakes in these four joint ventures as the valuations could be lower now. Specific details could not be immediately ascertained. A query sent to DIPAM seeking comments on the decision remained unanswered.

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‘Monetisation value of Rs 10,000 cr has been tentatively considered on account of divestment of AAI’s stake in private joint venture airports’

NMP estimates the aggregate monetisation potential of Rs 6 lakh crore through core assets of the Central government over a four-year period from FY2022 to FY2025. Under the NMP, a total of 25 airports and the AAI’s residual stakes in the four airport joint ventures are slated to be sold off. As per NMP, the overall value of these assets was estimated at Rs 20,782 crore for FY 2022-25.

“Out of this, Rs 10,000 crore of monetisation value has been tentatively considered on account of divestment of AAI’s stake in private joint venture airports. The same has been phased out equally over FY22 and FY23. It may be noted that the actual realisation from AAI stake sale will depend on multiple factors such as transaction timing, market conditions, investor appetite and transaction terms,” said the NMP document that was released in August 2021.

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