India Ratings and Research (Ind-Ra) has assigned GMR Hyderabad International Airport Limited’s proposed bank facilities ‘Provisional IND AA’ Outlook as Negative and has downgraded Delhi International Airport’s loans.

The rating agency, in its latest reports of the airports, stated that it continues to take a consolidated view of GHIAL and its subsidiaries owing to operational, strategic and legal linkages.

Also read: Indian aviation braving the turbulence

The rating reflects an improvement in traffic trends, adequate cashflows for meeting expansion capex and improved visibility on tariff. GHIAL has been generating positive cash accruals since September 2020 and the agency believes the accruals will improve with traffic recovery. Wider vaccination and reduction in travel restrictions will boost traffic.

However, the negative outlook reflects the continuing uncertainties related to passenger traffic due to sporadic increases in Covid-19 cases in various geographies and the consequent impact on air traffic, although this may be temporary in nature.

In January 2021, GHIAL’s passenger traffic had recovered to 55 per cent of pre-Covid-19 levels (December 2019), driven mainly by domestic traffic; however, international traffic continued to be subdued. Compared to the traffic of 21.6 million passengers in FY20, GHIAL expects around eight million passengers in FY21.

The airport is undertaking expansion to improve capacity to 34 million passengers from 12 million passengers now.

GHIAL has already been generating surplus on monthly operating cashflow level, as the operating expenses were contained / deferred during FY21.


The downgrade reflects DIAL’s continued delay in the realisation of dues from Bharti Realty Limited and the increased risk of refinancing bullet obligations in February 2022.

Furthermore, the company is undergoing a large capex, and hence, its timely raising of funds would be critical for ensuring steady progress on the same. The resolution of the RWN reflects Ind-Ra gaining more clarity on the traffic movement at DIAL. While DIAL’s traffic has been impacted significantly in FY21 due to Covid-19, the traffic is recovering steadily on a month-on-month basis. The Negative Outlook represents the restrictions at the international travel and the likely muted international traffic for longer period.

The company is in advanced talks to raise additional funds for the ongoing capex.

DIAL’s overall passenger volumes for the 10 months ended January 2021 was 72.4 per cent lower year-on-year (yoy).

Given the locational advantage of the airport, serving the national capital region, Ind-Ra expects the recovery from Covid-19 to be soon.

Also read: S&P says India ‘on track’ for economic recovery in FY22-end

DIAL had invoked the force majeure clause of the concession agreement in FY21, as the Covid-19-led crisis had materially and adversely affected its business.

Indira Gandhi International Airport, operated by DIAL, is undergoing a significant capex of ₹98,000 crore plus interest, during construction on actuals to increase its capacity to 100 million passengers from 66 million passengers now. The capex, which was previously scheduled to be completed by June 2022 has now been deferred until June 2023.

Aeroports de Paris SA (Groupe ADP) had acquired 49 per cent stake in GMR Airports Limited, which owns 63 per cent stake in GHIAL, in July 2020.