The India-focused investment arm of Canadian firm Fairfax is set to acquire an additional 10% stake in Bangalore International Airport Ltd (BIAL) for $255 million (about Rs 2,160 crore).
Fairfax India Holdings Corp, which already owns a controlling 64% interest in the airport operator, will buy the additional stake from Germany’s Siemens Project Ventures GmbH, which will cease to be a shareholder in BIAL.
BIAL operates the Kempegowda International Airport in Bangalore. Fairfax, which was founded by Indian-born Canadian billionaire Prem Watsa, became the largest shareholder in BIAL by acquiring a 33% stake in the operator from GVK Power and Infrastructure in 2016. Following the latest transaction, it now controls a 74% interest in BIAL.
Fairfax’s stake in BIAL will be held by two entities—Fairfax India Holdings Corp (30.4%) and its indirect subsidiary Anchorage Infrastructure Investments Holdings Ltd (43.6%). The remaining 26% in BIAL will continue to be held by the Airports Authority of India and the government of Karnataka.
“This additional investment in BIAL is a testament to our belief in the continued growth opportunities presented by BIAL,” said Watsa.
Siemens originally owned a 40% stake. It sold a 14% stake to GVK back in 2011. This reduced Siemens' stake to 26% and increased GVK's holding from 29% to 43%. Siemens has been progressively offloading its stake in BIAL since 2018 when it offloaded a 6% stake for Rs 450 crore ($65 million then). In December last year, it sold a 10% stake in BIAL in two tranches to Fairfax—3% for $75 million and 7% for $175 million.
BIAL runs the third biggest airport in the country which can handle 51.5 million travelers a year. It faced major headwinds during the nationwide pandemic-induced lockdowns of 2020 and 2021, but has been trying to recover its lost ground even as it continues to expand its operations.
As VCCircle noted in October, the financial year 2023-24 was a mixed bag of sorts for BIAL, which swung to a net loss of Rs. 55.7 crore from a consolidated profit of Rs 487.3 crore in 2022-23, despite recording a 49% jump in its consolidated revenue in the same period.
This loss was surprising, given the fact that most of its commercial and financial metrics in 2023-24 were better than those in 2022-23. In fact, in March, VCCircle had noted how BIAL had managed to turn its fortunes around following the setback it suffered in the wake of the pandemic.