PROJECT APPRAISAL

OF

NAVI MUMBAI INTERNATIONAL AIRPORT LIMITED (NMIAL)

FACULTY GUIDE:
Prof. Tamal Dutta Choudhuri IBS Kolkata

SUBMITTED BY:
Dyuti Lal Gaurab Basu (09BS0000728) (09BS0000767)

Purpose of the project: Present Mumbai Airport (Chhatrapati Shivaji International Airport). business and commercial activity of the region. Hence to absorb the over crowding of present airport in Mumbai a new Greenfield airport project in Navi Mumbai is to be developed. even on restructuring and modernization is going to be saturate by 2013. the availability of physical and social infrastructure along with environmental friendly size with least resettlement and rehabilitation makes the Navi Mumbai airport project technically and financially viable. Currently it holds 36. The location of the proposed airport at Navi Mumbai has been considered on several parameters. Navi Mumbai is expected to absorb the future growth in population. Promoters & Their background: GVK Airport Developers (GVKPIL): GVK Airports Developers is wholly owned subsidiary of GVK Power & Infrastructure Limited.GVKAHPL has since acquired 12% stake in Bangalore International . It is currently developing and managing Mumbai¶s Chatrapathi Shivaji International Airport. (MIAL) and is the largest stake holder. the flagship company of GVK Group. Ltd. It is in the business of developing and managing airports.63% equity stake in Mumbai International Airport Pvt. The availability of physical and commercial activity of the region.

The name of the Company was changed to GVK Power & Infrastructure Limited on July 13. a private company with unlimited liability. .R. Hydel and Thermal). ACSA added Pilanesberg International Airport to its network in 1998 under a 30-year concession with the North West Province. the Company was converted from a private limited company to a public limited company in 2005 and the name was changed to Jegurupadu Operating & Maintenance Company Limited. the Company is legally and financially autonomous and operates under commercial law. when a 25. Tambo. The transaction valued ACSA at about R4 billion. Oil and Gas. Transportation and Urban Infrastructure. The Company has consolidated its infrastructure assets under one roof. In 2005. Roads. a local asset management company. GVKPIL is a Holding entity with three verticals-Energy. (BIAL) from Unique (Flughafen Zürich AG) Zurich Airport and GVKAHPL has further 17% of L&T¶s stake in BIAL. The Company was incorporated in 1994 as Jegurupadu Operating & Maintenance Company. Subsequently. Although ACSA is majority owned by the South African Government. as amended. GVKPIL Background: GVK Power & Infrastructure Ltd (GVK PIL) is a Secunderabad-based infrastructure player. Main contributors to Company¶s revenue are power. Thus GVKAHPL has a stake in BIAL up to 29%.4% shareholding was sold to privatesector shareholders. under the Companies Act. through the Department of Transport. Airports.. the 20% foreign-held shareholding was sold to the Public Investment Corporation. etc. 1956. ACSA was partially privatised in 1998. Cape Town and Durban. making it an integrated infrastructure player and has interests in various Power Generation assets (viz. Formed to own and operate the nine principal South African airports. including the three main international gateways of O. 2005. roads and airport operations Airports Company South Africa (ACSA): ACSA was formed in 1993 as a public company under the Companies Act of 1973. as amended. Gas.Airport Ltd. and the Airports Company Act of 1993. SEZ. Coal Mines.

GVKADL and ACSA has stake of 74% where as AAI has stake of 26%.Special Purpose Vehicle (SPV): A special purpose vehicle is created consisting of GVK Airport developers. . Airports Company South Africa and Airports Authority of India and the SPV is named as Navi Mumbai International Airport Limited (NMIAL).

The cost of the project. It is expected to absorb annually 4. is Rs 4.000 m 155. 273 Cr.2 million in three years time.600 Cr Rs.970 crores. ACSA and AAI).e 3:1 ).200 Cr Rs. .1. The airport will have a terminal area of 250.Cost of the project & Means of financing: Cost of the Project: According to CIDCO (City and Industrial Development Corporation of Maharashtra Ltd).2.1.896 Cr Rs.000 m 130.4. Rs.000 m 2 2 2 Cost of the Project Rs. which is being developed through the public-private partnership route. The development will be stretched in 4 phases: Phases Phase-1 (2011±13) Phase-2 (2016±2018) Phase-3 (2020±2022) Phase-4 (2026±2028) Planned Capacity 350.200 crore (Phase 1).5 million passengers in its first operational year and will be doubling it to 8.000 m² and handle 50-55 million passengers annually. Here 26% of Rs 1050 Cr will be provided by AAI ie Rs.272 Cr 185. Equity: The entire equity capital of Rs 1050 Cr will be brought in by the promoters of SPV (GVKADL.000 m² and a cargo area of 100. 777 Cr will be divided into 50:50 among GVKADL and ACSA and they will bring Rs 388. It will be able to absorb 13.000 m2 Navi Mumbai International Airport will support the rapidly growing air travel needs of Mumbai Metropolitan Region. the total cost of the airport will be about Rs. Means of Financing: The Proposed means of financing the project is as follows: Particulars Equity (to be brought in by Promoters) Debt (Term loan to be raised through Bank) Total Rs ( in Cr) 1050 3150 4200 The project is proposed to be financed with debt equity ratio of 75:25 ( i.7 million by 2020 and 30 million by 2030.5 Cr or around Rs 390 Cr each. Rest of the amount ie.9.

successful implementation of this major. Market Demand & Analysis: The Navi Mumbai Airport is proposed to be developed through public-private participation. floriculture.Debt (Rupee Term Loan): The entire debt component of Rs 3150 Cr is proposed to be tied up through rupee term loan (RTL) from a consortium of banks/financial institutions.75 years and repayment of 11. Thane-Belapur and Taloja industrial area and the huge catchment area ranging from Pune to South Mumbai-would assure a steady growth rate in traffic at the new airport. high-tech high value industries to world market making airport to act as focal point for emergency of a trans-shipment centre in Asian region. Security and Margin: The term loans and the working capital loans would be secured by a first charge on all the immovable and movable assets of the company. Interest rate of 11. The charge created or to be created would rank pari passu with the participating FIs/Banks. The company will pay 70% of RTL in 46 quarterly installments and the balance 30% of debt as bullet repayment along with 46th installments. present and future. moratorium of 0. thus assuring steady revenues to the investors.5% is charged and the door-to-door tenor of the RTL would be 15 years (including construction period of 3 years. Navi Mumbai Airport Operator Revenue Stream: Aeronautical: y y y Landing charges Parking charges Passenger Service Fee Non Aeronautical: Aero-Related: y y y y Cargo Handling Aircraft Refueling Aircraft maintenance Catering Services . vitally needed project. Jawaharlal Nehru Port Trust.25 years). a Special Economic Zone. In addition the project opens-up state vast hinterland rich in agriculture. For rapid.

Business and industrial park Retail and entertainment. MoEF. had deferred environment clearance for the project on the grounds that the airport would involve reclamation of low-lying areas in an ecologically fragile zone as well as destruction of several hectares of mangroves. shops Car parking. in March. The have the required know how of development and maintenance of the airport infrastructure projects. Location and Land: The airport which has been proposed is located on NH4B which is at a distance of 35 km from the Chhatrapati Shivaji International Airport. near Panvel town in Navi Mumbai. Environmental Feasibility: The ministry of environment and forests (MoEF) gave its clearance for the Rs 4. public admission fee Commercial (Other): y y y Real Estate Development Hotel. . businesses. residential Technical Feasibility: The Promoters of the special purpose vehicles are experienced in airport projects. Recently promoters have been involved in the modernization of Chhatrapati International Airport in Mumbai.Commercial (Terminal): y y y y Advertising Fee Revenue from Concessionaires Rental from airlines. Approximately 1140 Hectares (Ha) has been marked for the development of the second International airport.200-crore Navi Mumbai international airport on 14 May 2008. Another 225 Ha of government land is being transferred to CIDCO and the remaining 295Ha is private land which is under acquisition.

7 3.33 32.85 7.64 8.Financials of the Company: Profit & Loss account of GVKPIL (in Cr) Mar '06 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 0 0 2.8 18.13 10.37 15.058.36 0 11.44 3.84 9.39 0.34 0 44.92 1.6 11.88 14.88 27.24 0 23.48 2.35 0 27.44 99.92 16.23 Mar '07 12 mths Mar '08 12 mths Mar '09 12 mths Mar '10 12 mths Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 6.42 21 17.15 31.43 4.76 0 13.36 12.23 26.5 31.12 0 5.87 1.14 0 15.21 -0.19 6.94 8.15 0 12.89 0 27.79 90.2 0 17.88 0 0 16.02 0.77 0 0 0 19.12 8.41 13.2 0.91 0.65 0 0 0 4.38 8.15 16.04 0 31.67 0 46.18 0 0 6.83 2.7 18.10 0.16 0 4.77 0 42.73 1.97 0 26.7 6.35 0.32 236.67 13.61 .45 14.01 0 99.67 1.22 14.78 25.43 21.17 0 0 0 10.59 10.45 1.89 16.21 0.34 11.49 0.08 0 7.44 6.87 0.058.91 0 118.24 0.49 99.32 4.69 27.23 46.13 26.792.47 0.92 26.88 -0.49 0.89 1.76 0 0 10.15 0 11.56 3.79 105.64 0 12.03 35.66 0 0 3.03 0 26.23 30.35 0 0 0 236.42 0 174.3 1.83 13.41 3.1 4.56 0.12 0 0 4.28 25 148.35 -1.97 91.56 0 60.35 0 0 10.

64 70.64 23.32 0 350.23 0 2.02 7.76 140.07 0 11.25 .64 0 0 388.05 0.39 0 1.01 0 308.00 23.58 140.73 66.58 95.32 0 1.739.169.577.27 3.23 108.57 0 100.06 547.28 8.64 0 1.33 0 951.465.58 0 0 1.87 0.92 0 0 2.98 0 1.73 790.25 1.01 0.22 0 0 0 1.02 3.93 1.54 787.17 5.31 3.08 0.83 0.58 140.95 1.01 0 705.15 0 33.33 0 327.051.44 771.23 2.99 0 2.91 100.04 0.21 6.047.37 0.12 0.566.15 0 0 0 412.51 0.81 2.62 1.22 0 0 0 1.16 5.84 0 116.62 1.8 0 6.58 0 0 1.99 0 5.04 0.33 0 1.718.92 0 1.09 0 1.63 0 3.307.12 1.22 157.718.71 4.598.04 549.46 1.055.76 6.Balance Sheet of GVKPIL(in Cr) Mar '06 12 mths Mar '07 12 mths Mar '08 12 mths Mar '09 12 mths Mar '10 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum.64 23.03 0.718.34 0 100.514.51 0 412.41 0.16 2.16 0 2. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.566.44 780.44 0.45 0 412.44 350.3 432.42 0 771.739.64 107.739. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities 0.72 33.31 4.633.22 32.25 0.05 0.15 23.62 103.52 1.34 2.7 0 1.64 0 1.63 0 2.35 0 421.92 157.16 0.22 140.59 10.75 12.42 2.73 0.

03 257.81 164.94 1.3 33.75 1 0.05 76.7 ---68.65 -4.93 1.04 2.04 222.8 38 0.22 34.2 11.42 -9.47 22 15.06 12.83 4.63 -9 -1.9 268.96 1 --- 266.91 4.59 51.75 1 -0.31 38.1 0.01 238.3 14.64 34.61 1.26 2.15 11.28 -16.34 59.99 266.28 14.88 34.018.83 34.19 11.54 0.12 0.25 1.22 6.35 -- 1 -0.61 3.59 36.88 -15.33 ---1.05 6.72 138.23 ---91.52 268.37 3.19 ---- 0.54 0.87 0.35 10 2.11 76.04 0.32 22.31 -7.04 102.37 12.37 1.71 4.32 41.92 15.84 1.15 5.42 43.01 41.75 --- 223.26 12.Key Financial Ratios of GVKPIL Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Debt Service Coverage Ratio Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 10 -2.77 4.2 9.06 76.17 9.27 0.84 4.17 51.06 28.06 76.02 73.61 15.11 38.73 --0.79 94.31 33.07 0.22 12.21 -2.91 1.59 1.45 22.27 9.78 34.96 1.65 34.96 -931.89 1.22 3.52 4.26 5.15 ----45.38 0.4 39.11 36 36 1.89 1 1.84 10.28 .93 20.62 3.21 1.78 -- 16.4 32.25 0.5 1.19 51.