KOCHI: Many plans are on the drawing board for the Cochin International Airport Limited (CIAL) to increase its turnover to Rs 3,000 crore by 2023 from Rs 361.39 crore recorded in 2013-14.
In order to scale up the turnover, the company now intends to borrow money as the borrowing cap has been raised from Rs 300 crore to Rs 1,500 crore. But, financial experts point out that it would be good option to list CIAL shares on stock exchanges to garner funds.
Though many of the shareholders and potential investors in the State are of the view that the shares should be listed, the majority shareholders are opposing the move, fearing loss of ownership.
“A rough estimate shows that the equity value of the company is around Rs 4591 crore. The company also owns over 1,200 acres of land, which is worth Rs 16,500 crore.
“If five per cent of the CIAL shares is diluted and the entity is listed on stock exchanges, on a conservative estimate, Rs 250 crore could be raised easily,” experts say.“At present, the shares are traded at around Rs 150, which is pretty low considering the huge prospects of growth for the company. Cochin International Airport Limited has all the qualities to be a listed company. As it completes 15 years of operation, it is high time its shares are listed. Apart from making it easier to raise fund, listing of shares will also bring in more transparency and better accountability. After listing, the shareholders will be able to know the financial strength of the company in every three months, rather than getting the detailed reports annually. The true worth of the company could only be known when it goes for listing,” said V K Vijayakumar, Investment Strategist at Geojit BNP Paribas Financial Services Limited.
The CIAL was launched in 1999 with an initial cost of Rs 283 crore.
The company has around 18,000 shareholders, and the total number of shares is 30.61 crore. The State Government has a 32.24 per cent stake in the CIAL, followed by N V George (11.89 per cent), Synthite Industries Limited (8.16 per cent) and M A Yusuffali (7.78 per cent).
“We are in favour of listing CIAL shares, but the major concern is the valuation of the company. The shareholders are against the company going for listing in a hurry. The listing of Cochin International Airport Limitedshould be done at favourable circumstances so that the shareholders get maximum benefit,” said Devasikutty Padayatil, general secretary of the Shareholders’ Organization of Cochin International Airport Limited (SOCIAL).
Meanwhile, M A Yusuffali, managing director of the LuLu Group and director of the Cochin International Airport Limited, said that the ownership of the company should remain with the current shareholders and their generations, expressing his disagreement with the idea of listing of shares.
Yusuffali’s stake in CIAL is roughly Rs 357 crore.