Fraport’s Delhi exit: what it means for Indian airport investment as next concession stage nears

It was 18 years ago that the first concessions were made available on the largest Indian airports to domestic and foreign operators. Those operators at first queued up to get a piece of the action, until the government began meddling in the T&Cs, and some withdrew.

The biggest prize of all, a slug of Delhi International Airport, went to Germany's Fraport, but it amounted to only 10% - something that has embarrassed the operator, because beyond its role of airport manager it has been unable to assert strategic influence.

Having hummed and hawed for over a decade about what to do, Fraport has now sold that stake to the majority shareholder GMR, increasing its stake to 74%, with Airports Authority of India owning the remainder.

While Fraport is unlikely to walk away from India altogether, the winner in this is GMR. GMR has been somewhat resurgent lately, with several irons in the fire, mainly abroad, and it thereby retains some gravitas in the country as the primary concessionaire at the capital's main airport.

This puts it in a better position to fight off the challenge from the aggressive 'New Kid on the Block', Adani Airports, which is positioning itself to be the number one operator within India while also now attempting to invest in or acquire and develop foreign assets as well.

The next big hurdle for all concerned is the long overdue third concession tranche, which could be up to 13 airports, with even more to follow later in subsequent ones.

That will assuredly sort out the men from the boys.