GMR Group secures Rs 6,300 crore investment from Abu Dhabi investment authority
- In Reports
- 04:27 PM, Oct 23, 2024
- Myind Staff
On October 23, GMR Group announced that it has finalised an agreement with a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for a significant investment of Rs 6,300 crore in structured debt instruments of GMR Infra Enterprises Private Limited.
The company stated, "Completion of the transaction is subject to the satisfaction of conditions precedent and regulatory approvals." Once completed, GMR Group plans to utilise the proceeds to refinance all external debt of GMR Enterprise Private Ltd (GEPL), which is the promoter of GMR Airports Ltd (GAL). Additionally, the completion of the deal will lead to a significant reduction in the GMR promoter group’s pledge on its shareholding in GAL.
GMR Group operates three major airports in India located in Delhi, Hyderabad, and Goa, along with two airports in the Philippines and Indonesia. GEPL is a promoter group entity controlled by G M Rao. Kiran Grandhi, the Corporate Chairman of GMR Group, mentioned that the company has successfully reduced a considerable amount of corporate debt in recent years.
As of 3:05 PM on October 23, GMR Airports shares were trading 2.7 percent higher at Rs 82.56 per share on the Bombay Stock Exchange (BSE). This strategic move will enable GEPL to consolidate multiple lenders into a single source of capital, streamlining its financial obligations.
According to its latest annual report, GMR Enterprises' total debt rose nearly 4 percent year-on-year, reaching Rs 4,477 crore. The Abu Dhabi Investment Authority (ADIA) has a history of investing in airport infrastructure in India; in 2019, GVK Airports raised approximately Rs 7,600 crore from ADIA, PSP Investments, and the National Investment and Infrastructure Fund.
ADIA, recognised as the largest sovereign wealth fund in the United Arab Emirates (UAE), has also initiated operations at the Gujarat International Finance Tec-City, or GIFT City, with a fund ranging from $4-5 billion earmarked for investment in India. Notably, the UAE has emerged as the largest Arab investor in India, with investments amounting to around $3 billion in the fiscal year 2023-24. The UAE was identified as the sixth-largest source of Foreign Direct Investment (FDI) for 2023-24 and the seventh-largest overall since 2000.
Established in 1976, ADIA is a globally diversified investment institution that manages funds on behalf of the Government of Abu Dhabi, employing a strategy focused on long-term value creation. Over 70 percent of all global capability centre (GCC) investments originate from the UAE. The recent India-UAE Bilateral Investment Treaty, effective from August 31, 2024, is anticipated to further enhance investment flows between the two nations.
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