GMR Infrastructure Ltd has formed a sub-committee of its board to look into the possibility of spinning off its airport business, the company said on Friday.
The company said also in a stock-exchange filing that it has received multiple proposals from investors for its airport business and that the sub-committee will evaluate those proposals.
GMR said the new panel will evaluate options of demerging the airports business as the company gears up for the next phase of growth considering the government's intent to privatize airports, which is a $100-billion investment opportunity.
A demerger could also help GMR raise equity capital for the airport business and reduce its debt, the company said.
Apart from airports, GMR Group has business interests in energy, transportation and urban infrastructure sectors.
GMR operates airports in New Delhi, Hyderabad and Cebu in the Philippines, with total passenger capacity in operation and under development of 160 million. The Delhi airport earned cash profit of Rs 156 crore for the quarter ended December 2018, the Hyderabad airport posted cash profit of Rs 216 crore and the Cebu airport Rs 43 crore.
It is also developing greenfield airports at Mopa in Goa and at Heraklion, Crete, Greece in partnership with GEK Terna. Recently, GMR emerged as the highest bidder for the privatisation of Nagpur airport.
GMR Airports holds a 63% stake in the company that operates the Hyderabad airport. The Airports Authority of India and the government of Telangana hold 13% stake each while Malaysia Airports Holdings Berhad owns 11%.
GMR had proposed last year to buy out the Malaysia partner from the joint venture but the transaction fell through as the Indian company failed to fulfill the obligations stated under the share purchase agreement.
GMR Airports was valued at Rs 21,000 crore ($2.8 billion) in October 2018 when a clutch of private equity investors made a partial exit following an arbitration award.
These investors included Macquarie-SBI Infrastructure Fund and Standard Chartered Private Equity. The investors had put in Rs 1,478 crore in GMR Airports in 2011.
GMR’s airports division reported revenue of Rs 3,920.6 crore for the nine months through December 2018, down from Rs 4,218 crore a year earlier. It posted a pre-tax profit of Rs 1,035 crore, down from 1,308.7 crore.