Airports may find few buyers

The government’s move to raise capital by privatising half a dozen airports through 50-year concessions will find few takers when the aviation industry is facing acute financial stress, industry experts said.

Investment bankers Mint spoke to expect that if the government proceeds with the privatisation plan, it might find only two-three serious bidders that are able to raise the required debt and equity in a liquidity-starved market, lowering the chances of fair price discovery.

One banker said it will be difficult for buyers to do adequate due diligence during lockdown, which would particularly curtail foreign interest. “As the more profitable public airports are going under the hammer first, the government will get less than fair value on many of them,” he said requesting anonymity.