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Delhi International Airport Ltd (DIAL) is planning to raise INR 3,550 crore through a 15-year bond issue as part of a debt restructuring exercise. The proposed fundraising will primarily refinance the airport operator’s existing $522.6 million dollar-denominated notes due this year, along with associated transaction and hedging costs. The bonds are expected to carry a coupon of around 9.50%, subject to market conditions and investor demand. DIAL plans to finalise investors in August and is targeting a mid-October pay-in. The proposed structure will replace short-term dollar obligations with longer-term rupee funding and staggered repayments
Delhi International Airport Ltd (DIAL), the operator of Delhi’s Indira Gandhi International Airport, is planning to raise INR 3,550 crore through a 15-year bond issue as it looks to refinance existing dollar-denominated debt and restructure its repayment obligations.
According to people familiar with the transaction, the proposed bond issue is expected to be priced at around 9.50%, although the final coupon will depend on prevailing market conditions and investor demand. The bonds are expected to receive an AA rating, with interest payments scheduled on a quarterly basis.
The primary purpose of the fundraising is to refinance DIAL’s existing $522.6 million international notes that are due for repayment this year. The company had raised the dollar-denominated debt through 10-year international bonds in October 2016 at a coupon rate of 6.125%.
The proposed refinancing would allow DIAL to replace the maturing foreign-currency obligation with rupee-denominated long-term funding. The proceeds will also cover transaction expenses and hedging costs associated with both the existing debt and the proposed bond issue.
The new structure is expected to provide DIAL with greater flexibility in managing its repayment schedule. According to the transaction details, the company could refinance or redeem the bonds after five years. The principal repayment would begin from the sixth year rather than requiring a large repayment at maturity.
Under the proposed repayment structure, 5% of the principal would be repaid annually from the sixth to the tenth year. This would increase to 10% annually in years 11 to 13, followed by a 15% repayment in the 14th year. The remaining 30% would be repaid in the 15th year.
DIAL is targeting a mid-October pay-in for the proposed bond issue and plans to finalise investors during August. The staggered repayment structure is intended to spread the company’s debt servicing requirements over a longer period instead of concentrating repayment around the maturity of its existing dollar notes.
The refinancing comes as airport operators continue to manage substantial capital requirements alongside long-term concession and infrastructure commitments. For DIAL, shifting from dollar debt to rupee funding also reduces direct exposure to foreign-currency repayment obligations.
The proposed bond sale represents a significant refinancing exercise for DIAL and forms part of its broader approach to managing its capital structure. If completed as planned, the transaction would provide the airport operator with longer-tenure domestic funding while extending the timeline for repayment of the underlying debt.
DIAL is backed by GMR Airports, Airports Authority of India and Fraport AG, and operates the capital’s principal airport, one of India’s busiest aviation hubs.
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