Govt to spell out its stand on airport equity returns by February

The Civil Aviation Ministry will make its stand clear on the rate of return that airport operators can seek to generate on the equity brought in by them by early next month. The ministry has asked the Airports Authority of India (AAI) to hold talks with investment banks such as SBI Capital Markets Ltd to recommend a plausible return, according to two government officials who did not want to be named.

The aviation ministry is considering working on two different slabs for returns on equity invested in existing airports and those built from scratch depending on the risk level, said one government official. The risk, for example, could be more for an airport built from scratch compared with an existing facility like Delhi, which has an existing revenue stream. A higher risk would merit a higher return, according to a report by Tarun Shukla of Mint.