KOCHI: The dream of a bunch of shareholders of the Cochin International Airport Limited to have stock exchange listing of the company is unlikely to materialise. The management of the company is understood to be in no mood to list the company in the stock market for a variety of reasons.
According to sources in the company, the director board is predominantly of the view that there is no need to go for stock listing to raise funds as the company is already raising Rs 350 crore through rights issue at a premium of Rs 40 per share on a ratio of 1:4.
The airport is currently constructing a new international terminal at a cost of '1,000 crore and this amount can be used for the purpose.
“The rest will be raised as loan. The loan component is always needed in the prudent financial management of the airport company. The Airport Economic Regulatory Authority (AERA) fixes the tariffs at the airport based also on the loan component of the airport and if loan is not taken, the airport will be the loser in this regard. In the case of paying less tax also, it is prudent to take loan than raise money through the stock market,” said a source.
“For the shareholders, there is no need to hurry to the stock market to sell shares at a high premium. There are a lot of takers outside for the shares of CIAL who are ready to shell out even up to Rs 200 per share. The listing in stock market, however, has risks as the share value will fluctuate,” said the source.
Moreover, the government will lose the control of the company and the Chief Minister may lose the post of chairman.
“The management of the company too will become difficult as the Securities and Exchange Board of India (SEBI) will have a tight leash over the company. For a public-private partner company with a lot of small shareholders, this will be a difficult proposition,” he said.
“Though at the recent AGM, the Chief Minister asked CIAL managing director V.J. Kurien to explore the possibility of stocklisting, it is unlikely to happen due to these reasons,” said the source.
