The Airports Authority of India is unlikely to opt for masala bonds to raise funds for its capital expenditure requirements but is looking at funding from overseas market through private placements and pension funds, sources close to the development told CNBC-TV18.
AAI will soon appoint an international rating agency to tap the overseas markets better and is in talks with S&P for that, the sources said, adding that another agency may also be engaged to conduct roadshows under the fund-raising exercise.
The state-run airport operator is currently in the process of formulating a borrowing road map but instead of chalking out a long-term road map, AAI is likely to select borrowing instruments for a period of two years for now.
"The current process of privatisation of six airports is expected to fetch a one-time capital expenditure return of Rs 2000 crore while annual income would be around Rs 900 crore. Then there will be more airports which are likely to be privatised. Hence, keeping those factors in mind, it will be better to chalk out a borrowing plan for two years for now," a person aware of the matter said.
The borrowing plan, which is expected to be finalised next week, is likely to advocate for raising around Rs 500 crore in first tranche via US dollar-denominated bonds, the sources said. The airport body is especially eyeing pension funds as it feels that this category will be better suited keeping mind the cycle of returns in aviation space.
