GMR Airports to enter into high growth Indonesian aviation market

So, let's know what the buzz all about is! 

The stock of GMR Infrastructure opened above Rs 40 and despite profit booking from the higher levels, the stock was seen outperforming the benchmark indices. At the time of writing this article, the stock was seen trading with gains of close of half a per cent while the benchmark indices were trading in red.   

So, let's know what the buzz all about is! GMR Airports Limited (GAL), a subsidiary of GMR Infrastructure Limited was announced as the winning bidder for the development and operation of Kualanamu International Airport in Medan, Indonesia (Medan Airport).   

Medan is the capital of North Sumatra province and also, the fourth largest urban area in the country. GMR will enter into 49:51 partnerships with Angkasa Pura 2 (AP2) for this project. The consortium will transform Kualanamu International Airport into Western International hub of Indonesia.    

The airport handled more than 10 million passengers in 2018. The project scope includes operation, development and expansion of the airport over a period of 25 years. Kualanamu International Airport is an operating airport with healthy cash flows. GMR Airports won the bid for this high growth potential brownfield airport through a closely contested international competitive bid process and will partner with Angkasa Pura 2 (AP2). The letter of award is expected to be issued in the next few days post bid formalities while signing of project agreements before the end of the year.  

The stock has gained a staggering 50 per cent on a YTD basis; however, lately, it has seen some profit booking, which is quite evident from the fact that on a MTD basis, the stock plunged nearly 2 per cent while on a WTD basis, it slipped by 5.35 per cent.