GMR-ADP partnership to attract global brands to Indian airports

Executive Officer Saurabh Chawla said, “We want to use Groupe ADP’s expertise in design to create the next generation of retail at airports so that Indian consumers spend more at Indian airports and not at outstation hubs, which have attracted Indian consumers.” has ended the demand for Director, Finance & Strategy, GMR Infrastructure. “We want to harness their expertise in attracting the best brands to GMR airports, housed in newly designed retail areas. Imagine their negotiating power to attract global brands. Our (The relationship with ADP) is not a financial relationship. It is an industrial partnership,” Chawla said in an interview.

The Adani Group operates the largest number of airports in India after the Airports Authority of India (AAI); However, the GMR Group also operates airports abroad, making it India’s largest domestic private airport operator.

The retail strategy will help GMR improve non-aeronautical revenue at airports such as Delhi, where 30% of non-aeronautical revenue is used to cross-subsidise airport charges.

Chawla said the GMR group is also looking at developing an airport management vertical to bid for master concessions (airport operations) and real estate development at various airports.

The group’s broad strategy is in line with other airport operators such as Adani Group and AAI. The Adani group has already expressed its intention to develop real estate and aero cities around its airports. AAI is also set to sell master concessions at its airports to raise non-aeronautical revenue.

Seeking to develop its non-aeronautical business, GMR had previously won a bid for duty-free business in Bali. The partnership with Groupe ADP is expected to help the company attract top brands at competitive rates.

In 2020, Paris-based airport operator ADP bought a 49% stake in GMR Airports Limited, a subsidiary of GMR Airports Infrastructure Limited, with GMR Group holding the rest. Airports under GMR Airports Limited include independent operating entities for Delhi, Hyderabad, Mopa in Goa, Bidar, Bhogapuram in Greece and Crete. Founded in 1945, Groupe ADP owns and manages Charles de Gaulle Airport, Orly Airport and Le Bourget Airport in Paris. Overall, it controls and manages more than 20 airports, including its network of joint ventures—TAV Airport and GMR Airport.

In March, both the partners decided to merge GMR Airports with the group holding company GMR Airports Infrastructure. Once the merger is completed by March 2024, GMR Group will continue to be the largest stakeholder in the listed entity GMR Airports Infrastructure with a 33.7% stake, while Groupe ADP and the public will hold 32.3% and 34%, respectively. All the eight airport companies of the group will be subsidiaries of the company.

“Hence, the merger of GMR Airports Infrastructure Ltd and GMR Airports Ltd would result in value creation of 15-20%, as the closer the operational assets are to the listed company, the higher the valuation,” Chawla added. as co-promoters, but the management control will be with the GMR family. Western Europe is ADP’s sphere of influence and South Asia is GMR’s. In the rest of the geographies, we will collaborate, however, in Southeast Asia, GMR will lead the way in seeking opportunities. In geographies where TAV (ADP Subsidiary) is present, we coordinate through ADP,” he said.

Merger will also help the company raise funds 2,900 crore from Groupe ADP through a 10-year foreign currency convertible bond, which will be used to repay the debt.

“The debt of GMR Infrastructure Ltd. is approx. 2,200 crores, which includes accrued interest. about surplus 700 crores out of 2,900 crores together 550 crores of total earnings 1,250 crore will be used to remove a major portion of the contingent liabilities,” Chawla further said.

anu.sharma@livemint.com