Gross bank credit by Indian airports doubles to ₹8,673 cr in two years

The outstanding amount of gross bank credit by Indian airports has almost doubled over the past two years to ₹8,673 crore as of July 2022 compared with ₹4,970 crore at the same time in 2020, according to data put out by the Reserve Bank of India.

According to the data, in July 2021 Indian airports’ cumulative gross bank credit was ₹7,420 crore which increased by 16.5 per cent to ₹8,673 crore as of July 29, 2022. There has been an almost 30 per cent hike in the gross bank credit since the beginning of FY23 (Between April and July 2022).

Healthy increase

Industry experts believe that the increase in bank credit is healthy and is happening due to new Greenfield projects and expansion of major airports.

Jagannarayan Padmanabhan, Director and Practice Leader at Transport and Logistics, CRISIL Infrastructure Advisory, explained that— “The healthy increase in gross bank credit could be due to developments in the build-out  of greenfield and brownfield expansion by major airports. We should continue to see traction even in the coming quarters.” 

Both Delhi and Mumbai airports are constrained for capacity, and hence, these cities will get new airports in Jewar and Navi Mumbai, respectively, and are likely to be operational by 2024. Hyderabad and Bengaluru airports were expanded to add capacity, whereas Kolkata and Chennai are getting new terminals.

The domestic passenger traffic, too, is inching closer to pre-Covid level numbers. In May 25, 2020, reaching 64 per cent of the previous year levels in February 2021. Domestic passenger traffic grew by 94 per cent on a y-o-y basis in July 2022 and was only 18 per cent lower as compared to 11.9 million in July 2019 (pre-Covid level).

On account of capex

Hence, another senior analyst, requesting anonymity, pointed out that this increase in gross bank credit “should be on account of capex which is underway at Delhi, Mumbai, Goa, Nagpur, 6 airports by the Adani Group, etc.” 

Adani Airports Holdings has a portfolio of 8 airports . In post-result investor presentation for Q1 FY23, the company said that it aims at having over 300 million consumers by 2026, and is hence, in a rapid expansion mode.

In a recent interview with BusinessLine, Civil Aviation Minister Jyotiraditya Scindia said that over the next few years, passenger capacity at six metro airports including Delhi, Mumbai, Hyderabad, Bengaluru, Kolkata and Chennai will reach 400 million passengers.

He explained that once Jewar airport reaches its total capacity by 2026, in all, Delhi will be able to handle 170 million passengers at total capacity at both. Similarly for Mumbai, which is at 60 million passenger capacity along with Navi Mumbai, it will go up to 80-85 million in the coming years. Bengaluru and Hyderabad have a 25-30 million capacity going to about 90 million for both. Kolkata and Chennai both of which are getting new terminals will augment capacity by 30-40 per cent.