BIAL awarded AAA rating, the highest in the credit rating scale

Among key strengths contributing to the highest rating are projections for passenger traffic at KIA, expected to grow by 10-11% in FY2025, reaching 41-42 million passengers compared to 37.5 million in FY2024

Bangalore International Airport Limited (BIAL) has been awarded the AAA rating (Stable Outlook) by ICRA Ltd, India Ratings and Research Pvt Ltd, and Crisil Ratings Ltd. This rating, the highest in the credit rating scale, reflects a strong degree of safety in the timely servicing of financial obligations and minimal credit risk. 

“This recognition highlights BIAL’s solid market position as the third-largest airport in India and the largest in South India, with a passenger handling capacity of 51.5 million per annum,” BIAL said.

Key credit strengths

Among the key strengths contributing to BIAL’s rating are projections for passenger traffic at Kempegowda International Airport (KIA), expected to grow by 10-11% in FY2025, reaching 41-42 million passengers compared to 37.5 million in FY2024. Additionally, the extension of BIAL’s concession agreement until 2068 provides significant financial flexibility through a long operational tail period.

“Projections for FY2025 indicate that BIAL’s operating income is set to increase by 20%, and this growth is driven by the expansion of the airport, a steady increase in passenger numbers and higher aeronautical and non-aeronautical revenues. The strategic joint ownership by Fairfax Group (which holds a 64% stake), Siemens (10%), Airports Authority of India (13%), the Government of Karnataka (13%) further solidifies BIAL’s financial and operational capabilities,” BIAL said.

Bhaskar Anand Rao, Chief Financial Officer of Bangalore International Airport Limited, remarked, “We are honored to receive the AAA rating from ICRA, India Ratings and Research, and Crisil. This recognition reflects our robust business model and our commitment to sustainable growth. With regulated aeronautical revenues and our strategic investments in expanding capacity and enhancing the passenger experience, we are well-positioned for continued success. Our focus remains on delivering long-term value to all stakeholders while maintaining a solid financial foundation.”

Investment plans

BIAL has ambitious plans to invest approximately ₹16,000 crores between FY2025 and FY2029, aiming to boost its capacity to handle 80 million passengers annually. Key projects include the expansion of Terminal 2, infrastructure upgrades, and other major initiatives. 

“The AAA rating emphasises BIAL’s operational scale, fueled by increasing passenger traffic, the launch of Terminal 2, and steady growth in revenues. This stable outlook underscores BIAL’s potential for long-term growth, supported by strong financial flexibility and diverse income streams,” BIAL said.

Published - November 19, 2024 07:28 pm IST