Current market volatility has reportedly forced Hyderabad-based GVK Airport to defer its initial public offering (IPO) for raising INR3,500 crore. GVK Power and Infrastructure was planning to list its airport division GVK Airport Developers Limited. The IPO was expected to be launched later this year.
GVK operates two of the busiest Indian airports in Bengaluru and Mumbai. It further plans to increase its business in Kolkata, Navi Mumbai and Goa.
The proceeds were to be used to improve its valuation by monetizing the land around the Mumbai International Airport. The monetization planning, which took shape in 2014, has been stalled for a long time now owing to many difficulties. Slow work and encroachments around the airport area have made the proposal to lag further.
The plan included development of around 22 million square feet land, which was to be known as GVK Sky City for the next decade. Around 2 million square feet of land was to be developed around Mumbai International Airport between 2014-15.
Another reason behind delaying the IPO can be to test the waters before taking the leap. Before launching its own public offer, GVK wants to see the response towards the massive INR2,500 crore IPO of InterGlobe Aviation – the company behind India’s largest carrier Indigo Airlines.
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It is to be noted that GVK Airport Developers Limited planned to use the amount from the proceeds towards paying its debts which totals INR3,500 crore. The not so conducive market condition has forced the company to hold its IPO dreams. Most of the recently listed IPOs have disappointed investors by listing either below or just slightly above the allotment price. This includes Prabhat Dairy, Sadbhav Infrastructure, Pennar Engineered Building Systems, Shree Pushkar Chemicals & Fertilisers, and Power Mech Projects.