| GMR Hyderabad Aerotropolis Limited | ||||
| Rating reaffirmed at 'Crisil AA+/Stable' | ||||
| Rating Action | ||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its rating on the long-term bank facilities of GMR Hyderabad Aerotropolis Limited (GHAL) at ‘Crisil AA+/Stable’.
The rating reaffirmation is in line with the rating action on the long-term bank facilities of the parent, GHIAL, where ratings have been reaffirmed. The rating reaffirmation factors in expected growth in traffic and non-aero revenues in fiscal 2024 and 9MFY25.
The rating continues to reflect the comfortable financial risk profile of GHAL with average debt service coverage ratio (DSCR) on external debt. These strengths are partially offset by exposure to risks related to the execution of under-construction projects and continuation of lease rentals with tenants. |
Analytical Approach For arriving at its rating, Crisil Ratings has applied its parent notch-up framework to factor in the support available to GHAL from GHIAL. This is because the real estate business, forming part of non-aeronautical activities, is the core business of GHAL and the parent, GHIAL, will continue to provide timely, need-based financial support to the company. |
Key Rating Drivers & Detailed Description Strengths: Strong support from the parent: GHAL, a fully owned subsidiary of GHIAL, is strategically important to its parent on account of the non-aeronautical revenue, including real estate, it contributes to the profitability of the parent. Of the 1,500 acres of land available with GHIAL for commercial development, 500 acres have been leased out to GHAL. Further, Crisil Ratings has taken note of the corporate guarantee provided by the parent, GHIAL, towards debt of GHAL, to support the same in a full and timely manner.
Comfortable financial risk profile: GHAL has stable cash flow from tied-up lease agreements. The leases have reputed tenants, such as Decathlon and Coldman, and have a well-secured rent structure with a lock-in period of 2-4 years and tenure of 18-21 years. Additionally, an in-built escalation clause of 5-15% every 1-3 years is included in the agreement, varying from tenant to tenant.
Weaknesses: Exposure to project risks: Under-construction projects of around Rs 310 crore will be completed over the medium term. Although the company’s management has experience in developing and managing real estate assets, its ability to execute, market and secure long-term lease contracts for these projects will remain critical. Hence, timely execution, leasing parameters and absorption of new projects will remain monitorable.
Susceptibility to continuation of lease agreements: GHAL is exposed to market risks with respect to tied-up lease agreements. This risk is partially mitigated by lock-in period right from the start of the contract, with a notice period of 3-12 months. |
Liquidity: Strong The parent, GHIAL, will continue to provide timely, need-based financial support. On a standalone basis, GHAL had free cash and equivalent of ~Rs 46 crore as on March 31, 2025, which is sufficient to meet debt obligation in fiscal 2026. The company has a debt service reserve account for meeting cash flow mismatch. |
Outlook: Stable The outlook on GHAL factors in the outlook on its parent, GHIAL. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company GHAL was incorporated on July 18, 2007, as a wholly owned subsidiary of GHIAL. The company undertakes property development activities at Hyderabad International Airport in Shamshabad, Telangana. Of the total land available with GHIAL, 1,500 acres is demarcated for commercial development. Of this, 500 acres has been leased out to GHAL for commercial development. |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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Criteria Details
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