The National Investment and Infrastructure Fund Ltd. will invest Rs 675 crore in the upcoming greenfield international airport being developed by GMR Airports Ltd. in Andhra Pradesh's Bhogapuram.
The fund will invest in GMR Visakhapatnam International Airport Ltd., a special purpose vehicle which will develop and operate the Bhogapuram airport, GMR said in a statement on Thursday.
"This marks NIIF's second airport investment, after its investment in GMR Goa International Airport Ltd. (GVIAL), which operates Manohar International Airport in Goa, was completed in April 2023," it said.
The transaction envisages a primary investment by NIIF in the form of compulsorily convertible debentures to be issued by GVIAL, the company said.
"Our growing partnership with NIIF is a further testament of GMR's credibility as an airport infrastructure developer and the future of the aviation industry in the country," said GBS Raju, business chairman–airports, GMR Group.
Earlier this month, the airport operator raised Rs 3,215 crore to partially finance the phase-1 development of Bhogapuram project from a consortium of five banks/financial institutions, led by India Infrastructure Finance Co.
The debt will have a tenure of 18 years, which will comprise three years of construction, one year of stabilisation, and 14 years of structured repayments.
In 2020, GVIAL was awarded the concession to develop and operate the greenfield Bhogapuram International Airport to the north of Visakhapatnam, under a 40-year design-build-finance-operate-and-transfer model.
The phase-1 initial capacity is expected to be up to 60 lakh passengers per annum and a total capacity of up to 4 crore passengers per annum.
"NIIF believes that Bhogapuram International Airport will strengthen aviation infrastructure in Andhra Pradesh, playing a pivotal role in the region's economic progress in the coming years," said Vinod Giri, managing partner–master fund at NIIF.
The government-backed NIIF manages over $4.9 billion of equity capital and its master fund is one of India's largest infrastructure funds.
GMR presently operates six airports in India in Delhi, Hyderabad, North Goa and Bidar.
The Rajiv Jain-backed GQG Partners had earlier in December acquired a 4.7% stake in GMR Airports Infrastructure Ltd. for Rs 1,671 crore.
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