is GMR Infra taking off?

what comes to mind when one thinks of Goa? serene beaches, the incredible local cuisine, and perhaps even music festivals. but what about the stock market? it might not be at the top of the list for the average tourist, but India’s third largest infrastructure company (by market cap) is certainly making moves in the state that are being reflected in the market. on December 22, the stock price of GMR Infra, sitting on returns of over 70% for 2021, rocketed a further 8%.

what has Goa got to do with it?

winging it

it has largely to do with GMR’s airport infrastructure business. the airport that it is building in North Goa is being fast tracked to get commissioned as early as by August 2022. in particular, it recently announced that 50% of the work had been completed on the greenfield international airport. it will have an initial annual capacity of 7.7 million passengers and eventually expand to five times that number. this bodes well for its goal of doubling its operational capacity for airports, which it currently operates in Delhi and Hyderabad.

the Goa airport will be followed by the airport at Bhogapuram, serving Vizag which sees nearly 3 million passengers annually. a legal order asking MIHAN to hand over Nagpur airport to GMR will see another 3 million passengers added.

second wind

the aviation sector seemed to be in deep soup with the emergence of the omicron variant of the Covid-19 virus. a delay in resumption of international flights and potential lockdowns on the horizon combined with constrained revenue flow saw many aviation companies fall out of favour in the market. but with a slight easing of concerns over the impact of the variant, aviation may be back on track.
with Rakesh Jhunjhunwala entering the industry through Akasa, Tata taking over Air India, and Indigo looking to consolidate its position as market leader, the industry is set for its most exciting year in a while. this increased activity will no doubt also prove beneficial for airport infrastructure players such as GMR.

overall, GMR dabbles in a lot of other sectors such as highway construction and power projects, which are also seeing significant investment and expansion. those investors pulled in by its airport play might be in for a pleasant surprise.