Delhi International Airport Limited issuer summary: FY2026 results confirm post-CP4 improvement; next focus is refinancing of 2026 foreign-currency notes

Report date: 2026-05-31
Issuer: Delhi International Airport Limited
Ticker: DIALIN
Issuer type: Unlisted infrastructure / concession-based airport operator
Main bond covered: USD 500mn 6.45% Senior Secured Notes due 4 Jun 2029

Note: Unless otherwise stated, monetary amounts in this report are stated in Indian rupee crore. One crore equals 10 million rupees. DIAL standalone financial figures are based on the FY2026 audited financial results submitted to BSE on 27 May 2026, past DIAL annual reports, DIAL interim results, and rating-agency materials. GMR Airports Limited investor materials are used as supplementary information on Delhi Airport passenger traffic, airport operating metrics, and the sponsor side, and should not be confused with DIAL standalone financials.

1. Business Snapshot and Recent Developments

Delhi International Airport Limited (DIAL) is an unlisted airport concession company that operates, modernises, and expands Indira Gandhi International Airport, Delhi (Delhi Airport or IGI Airport). GMR Airports Limited holds 74% and Airports Authority of India (AAI) holds 26%. Through the 2006 privatisation and modernisation process, DIAL became responsible for airport operations, capital expenditure, passenger and airline services, and non-aeronautical commercial development. The concession runs until 2036 and is understood to be extendable for a further 30 years subject to certain conditions.

For credit analysis, DIAL should not be treated either as a consolidated credit of the broader GMR group or as an AAI- or Government of India-guaranteed credit. The repayment sources for DIAL debt are DIAL standalone airport cash flow, aeronautical charges set by AERA, non-aeronautical revenue, residual cash after revenue sharing with AAI, collateral and account-control arrangements, and access to domestic and offshore refinancing. AAI's 26% shareholding and the airport's policy importance are credit-supportive, but they are not an explicit guarantee of principal or interest payments on DIALIN bonds.

The update in this report is the FY2026 audited financial results submitted to BSE on 27 May 2026. In the previous issuer_summary dated 12 May 2026, the FY2026 first-half results and Q3 newspaper announcement had shown that the benefits of the AERA fourth control period (CP4) tariff, which became effective in April 2025, were starting to appear. The FY2026 full-year results now confirm full-year improvement in operating revenue, EBITDA, profit after tax, DSCR, and ISCR.

In FY2026, operating revenue was Rs 7,568.04 crore, total income was Rs 7,653.15 crore, EBITDA was Rs 2,882.43 crore, and profit after tax was Rs 476.87 crore. In FY2025, total income was Rs 5,733.87 crore, EBITDA was Rs 1,752.94 crore, and loss after tax was Rs 976.16 crore, so both revenue and profit improved significantly. DSCR rose from 1.07x in FY2025 to 2.01x in FY2026, and ISCR rose from 1.10x to 2.08x. This shows that the post-CP4 improvement in aeronautical revenue has been reflected not only in accounting profit but also in debt-service metrics.

At the same time, the results do not justify a purely optimistic reading. DIAL's debt/equity ratio remained high at 14.61x at FY2026-end, and current liabilities exceeded current assets by Rs 4,082.82 crore. The company's notes explain that current liabilities include the current classification of senior secured foreign-currency notes due for repayment in October 2026, and that the financial statements were prepared on a going-concern basis in light of future refinancing plans and undrawn sanctioned credit facilities. Therefore, the central reading of the FY2026 results is that post-CP4 improvement has been confirmed on a full-year basis, but refinancing of the 2026 foreign-currency notes and short-term liquidity still require confirmation.

On the rating side, DIAL notified BSE on 21 May 2026 that ICRA had reaffirmed its main NCDs at [ICRA]AA(Stable). This supports access to the domestic NCD market. However, a domestic AA rating is not an investment-grade rating for international foreign-currency bond investors. The existing S&P international rating is BB/Positive, and the credit assessment of the foreign-currency bonds needs to distinguish between domestic ratings, international ratings, and recovery assessments for secured debt.

2. Industry Position and Franchise Strength

DIAL's largest credit support is the Delhi Airport franchise. According to GMR Airports' Q4 FY2026 investor presentation, Delhi Airport handled 78.7 million passengers in FY2026, down 0.7% from 79.3 million in FY2025. The decline was modest, and the same presentation shows that passenger traffic in Q4 FY2026 was 21.2 million, up 2.7% year on year and a high quarterly level. FY2026 included periods affected by runway refurbishment, airspace and geopolitical factors, and airline-side operational adjustments. Therefore, even with annual passenger traffic close to flat, Delhi Airport's underlying demand did not materially deteriorate.

Delhi Airport is one of India's largest aviation gateways, with a revenue base that combines domestic, international, transfer, cargo, and non-aeronautical commercial facilities in the National Capital Region. GMR Airports' materials state that Delhi Airport's current passenger-handling capacity is 100 million passengers per year, with maximum capacity of 119 million passengers per year. After the Phase 3A investment, the physical room to absorb demand has increased. Because airport businesses have large fixed assets and fixed costs, if passenger traffic is maintained or recovers and the tariff framework functions, revenue growth can feed relatively directly into profit and debt-service capacity.

However, DIAL's franchise is concentrated in a single airport. If Delhi Airport suffers an operating shutdown, safety issue, terminal disruption, runway constraint, security issue, airline route reduction, or regulatory restriction, DIAL cannot absorb the impact with cash flow from other airports. The fact that the GMR group operates multiple airports supports operating know-how, but the repayment source for DIAL creditors is concentrated in DIAL standalone cash flow.

Jewar / Noida International Airport needs to be monitored as a long-term competitive factor. The new airport is unlikely to immediately displace Delhi Airport's core position, but the impact on passengers, cargo, low-cost carriers, international routes, commercial facilities, advertising, parking, hotels, and land development needs to be assessed over time. For investors in the 2029 notes in particular, even if the impact is limited before final maturity, refinancing markets will also price in the competitive environment beyond that point.

3. Segment Assessment

DIAL's revenue needs to be viewed by separating aeronautical revenue, non-aeronautical revenue, other operating revenue, and commercial / land-related revenue. However, the current BSE financial results do not provide detailed standalone segment profit in the income statement, so the credit analysis needs to combine operating revenue, the AAI fee, EBITDA, and the Delhi Airport operating metrics in GMR Airports' materials.

The central issue for aeronautical revenue is AERA's CP4 tariff. On 28 March 2025, AERA issued the tariff order for Delhi Airport's fourth control period, from 1 April 2024 to 31 March 2029, and the new tariff became effective on 16 April 2025. As confirmed in the previous report, GMR Airports announced that aeronautical yield per passenger would rise in nominal terms from about Rs 145 to about Rs 360, which was a major positive driver for aeronautical revenue from FY2026 onward.

The FY2026 results show that this improvement has flowed through to the income statement. Operating revenue rose 39.3%, from Rs 5,432.80 crore in FY2025 to Rs 7,568.04 crore in FY2026. GMR Airports' materials also state that Delhi Airport's aeronautical revenue in Q4 FY2026 increased 178% year on year. These numbers clearly show the impact of CP4. However, DIAL itself has appealed the CP4 tariff order to TDSAT. As of the financial-statement notes, the next hearing was scheduled for 28 May 2026, but as of the preparation date of this report, the outcome after that date has not been confirmed. The tariff improvement has materialised, but regulatory litigation and future adjustments remain.

Non-aeronautical revenue arises from duty-free, retail, food and beverage, advertising, parking, hotels, commercial facilities, and land-related revenue, reflecting passenger flow and airport location. GMR Airports' materials state that Delhi Airport's non-aeronautical revenue in Q4 FY2026 increased 4.2% year on year. It did not grow as sharply as aeronautical revenue, but non-aeronautical revenue is an important pillar supporting the airport's margins and business value. International passenger traffic, commercial facility contracts, duty-free and food-and-beverage spending per passenger, advertising, parking, and airport-area development all affect profitability.

The most important constraint in this section is revenue sharing with AAI. The annual fee to AAI in FY2026 was Rs 3,231.94 crore, equivalent to about 42.7% of operating revenue of Rs 7,568.04 crore. The AAI fee in FY2025 was Rs 2,496.08 crore. As operating revenue grows, a portion of value flows not to DIAL creditors but to AAI. The 45.99% revenue share under the OMDA is not just an expense item; it is the value-allocation mechanism in the privatised concession.

Therefore, in assessing DIAL, it is necessary to distinguish between the strength of the overall airport franchise and the cash flow that remains for DIAL creditors. In FY2026, operating revenue and EBITDA improved significantly, but the AAI fee also increased. The ultimate debt-service capacity is determined by the combination of regulated charges, non-aeronautical revenue, value allocation to AAI, finance costs, and refinancing costs.

4. Financial Profile and Analysis

The FY2026 results positively reinforce the view of DIAL's financial profile. In FY2025, finance costs and depreciation after the Phase 3A investment were heavy, resulting in a loss after tax of Rs 976.16 crore, DSCR of 1.07x, and ISCR of 1.10x. In FY2026, the CP4 tariff began to affect the full year, improving operating revenue, EBITDA, profit, and coverage metrics.

That said, the content of the improvement needs to be examined item by item. FY2026 EBITDA was Rs 2,882.43 crore, up 64.4% from Rs 1,752.94 crore in FY2025. Profit after tax was Rs 476.87 crore, turning positive from the large loss in the previous year. Finance costs were Rs 1,534.38 crore, slightly lower than Rs 1,687.16 crore in FY2025. Depreciation and amortisation were Rs 1,011.35 crore, down from Rs 1,133.29 crore in FY2025. In other words, the improvement was not driven only by exceptional items; it was accompanied by improvement in operating revenue and EBITDA.

At the same time, FY2026 included exceptional items of Rs 140.17 crore. The financial-statement notes explain that exceptional items included gains related to share buybacks at Delhi Duty Free Services and Travel Food Services, insurance proceeds, income from surrender of facility rights, provisions for new labour-code compliance, and the impact of contract termination with Celebi Delhi Cargo Terminal Management India. For credit analysis, FY2026's return to profitability should be recognised as an operating improvement, but exceptional items should not be overvalued as a recurring repayment source.

The FY2026 operating improvement is not merely a case of higher revenue and higher profit; it provides a partial answer to the most important question in DIAL's credit assessment. At the time of the previous report, post-CP4 first-half profitability had been confirmed, but it was still unconfirmed whether the company could absorb finance costs, the AAI fee, depreciation, and seasonality on a full-year basis. The full-year results now show that even after the AAI fee rose to Rs 3,231.94 crore, EBITDA reached Rs 2,882.43 crore and profit after tax was positive. This indicates that the tariff improvement did not merely increase gross revenue, but restored earnings capacity available for debt service.

However, operating improvement and debt safety are not the same. In an airport concession, even when user charges and non-aeronautical revenue grow, regulatory true-ups, the AAI fee, maintenance and renewal investment, insurance recoveries, litigation costs, and refinancing costs can affect cash flow with time lags. FY2026 was a year in which improvement was confirmed, but investors still need to verify whether DSCR can be maintained around 2.0x from FY2027 onward, whether the current-liability excess is resolved through refinancing, and whether aeronautical revenue growth is not merely temporary.

The key metrics are as follows.

Note: Some FY2024 items could not be confirmed from the public materials reviewed for this update. FY2025 and FY2026 are based on DIAL's FY2026 audited financial results. H1 FY2026 is based on DIAL's September 2025 interim results, and Q3 FY2026 is based on the comparative column in the FY2026 audited financial results. The Q3 ratios are quarterly figures and are not annualised.

The most important point in this table is that FY2026 full-year DSCR and ISCR improved to around 2.0x. For an airport concession company, DSCR of 2.01x is a major improvement from 1.07x in FY2025. This shows that post-CP4 operating cash flow has started to support debt service. However, DIAL has some concentration in principal maturities, and an improved DSCR does not mean that the October 2026 foreign-currency maturity can be repaid entirely from internal funds. Refinancing access remains the central issue.

On capitalisation, net worth improved from Rs 638.12 crore at FY2025-end to Rs 1,114.65 crore at FY2026-end. The debt/equity ratio also declined from 24.38x to 14.61x. Even so, this remains a high level of accounting leverage. For an airport concession, it is insufficient to judge credit quality only by accounting equity, but thin capital indicates limited loss-absorption capacity in a downside scenario.

On liquidity, cash and cash equivalents at FY2026-end were Rs 81.14 crore, other bank balances were Rs 48.76 crore, and current investments were Rs 1,221.47 crore. These three items should be the starting point for assessing short-term liquidity. Other financial assets of Rs 1,789.59 crore were also recorded, but because their breakdown, restrictions, and convertibility cannot be sufficiently confirmed from the current materials alone, they should be treated only as supplementary liquidity rather than an immediately available buffer. By contrast, current liabilities were Rs 7,448.87 crore and current borrowings were Rs 4,952.77 crore, so the weight of short-term debt and current liabilities is clear.

The financial conclusion is that the FY2026 results support the credit profile. Growth in operating revenue and EBITDA, the return to profit, and improvement in DSCR and ISCR indicate that DIAL is recovering repayment capacity after CP4. However, given high leverage, current liabilities exceeding current assets, the 2026 foreign-currency notes, the AAI fee, and regulatory disputes, the financial profile alone does not yet support a major upward shift in credit quality.

5. Structural Considerations for Bondholders

For DIAL bondholders, the most important question is the order in which the airport's total business value is allocated and to whom. DIAL has a strong airport franchise, but creditors do not directly receive total revenue. The actual source of recovery is determined by the ordering of the annual fee to AAI, operating expenses, taxes, maintenance investment, finance costs, domestic NCDs, bank borrowings, US dollar bonds, and collateral and account-control arrangements.

The 45.99% revenue share to AAI is a structural constraint from the perspective of bondholders. The FY2026 AAI fee was Rs 3,231.94 crore and increased materially alongside operating revenue. This shows that strong airport demand and tariff improvement lift DIAL's EBITDA, but a significant portion of concession value flows to AAI. DIAL creditors depend not on the economic value of Delhi Airport as a whole, but on DIAL cash flow after payment of the AAI fee and operating expenses.

The dispute with AAI is also a structural issue. Regarding the Monthly Annual Fee during the COVID period, DIAL sought exemption from payment on force majeure grounds, and the arbitral award held that payment of the Annual Fee was waived from 19 March 2020 to 28 February 2022. On 7 March 2025, the Delhi High Court dismissed AAI's set-aside petition and upheld the arbitral award. However, AAI has appealed to the Division Bench, and DIAL's FY2026 financial-statement notes state that the next hearing is scheduled for 12 August 2026. There are currently facts favourable to DIAL, but the matter is not fully concluded.

The appeal against the CP4 tariff is also important. DIAL has prepared the FY2026 financial statements by applying the CP4 tariff order, but it has also appealed the order to TDSAT. This indicates that while DIAL is benefiting from revenue improvement under the current CP4 order, disputes remain over future regulatory assets, true-ups, tariff assumptions, and cost recovery. For bondholders, regulatory disputes can create both upside potential and downside risk.

The protection provided by the secured-debt structure also needs to be confirmed. Existing S&P materials assign DIAL's senior secured notes a recovery rating of 3 and an estimated recovery rate of 65%. This reflects an assessment that DIAL's airport business value and collateral structure provide a degree of recovery support. However, collateral value depends on business continuity, AERA tariffs, the OMDA, the relationship with AAI, account-control arrangements, and enforceability under Indian law and contracts. The full indenture for the 2029 notes, collateral scope, additional-debt restrictions, restricted payments, change of control, cross default, hedging, and DSRA remain unconfirmed items.

When assessing DIAL's collateral and account structure, it is important not to make the simplistic assumption that collateral alone makes the bond safe. The value of an airport business is not just the physical value of runways and terminals. It is based on the operating rights under the OMDA, AERA tariffs, airline and passenger demand, the relationship with AAI, and security and operating approvals. To preserve value under stress, the airport needs to continue operating and revenue needs to flow through the accounts to debt service. Collateral supports recovery, but if regulated charges weaken, rights under the OMDA are restricted, or operations are suspended, liquidation value alone may not provide sufficient protection.

DIAL's debt also includes a mixture of foreign-currency notes, domestic NCDs, and bank borrowings. New issuance or refinancing of domestic NCDs may support funding for the 2026 foreign-currency notes, but it also increases the creditor layers relying on the same DIAL cash flow. Investors need to confirm additional-debt capacity, collateral sharing with existing debt, priority under project documents, restricted payments, and dividend restrictions. In particular, holders of DIALIN 2029 need to assess not only whether refinancing of the 2026 notes reduces short-term risk, but also which debts share which collateral and cash flows after the refinancing.

6. Capital Structure, Liquidity and Funding

The nearest funding issue for DIAL is the senior secured foreign-currency notes maturing in October 2026. The FY2026 financial-statement notes clearly state that as of end-March 2026, the company's current liabilities exceeded current assets by Rs 4,082.82 crore, and that current liabilities included senior secured foreign-currency notes due for repayment in October 2026. The company states that, in light of its refinancing plan for these foreign-currency notes and undrawn sanctioned credit facilities, it believes it will be able to realise assets and settle liabilities in the normal course of business.

This note is important. Even though FY2026 DSCR and ISCR improved, the company is not structured to repay all near-term principal maturities from internal funds. Access to refinancing markets, the domestic NCD market, bank lines, sponsor and group capital-market access, foreign-currency hedging, and US dollar interest rates directly affect credit quality. The current public materials do not confirm the current outstanding balance of the 2026 foreign-currency notes, the completion status of refinancing, refinancing terms, hedge unwind, or the amount of undrawn credit facilities.

DIAL also raised funds through domestic NCDs during FY2026. The financial-statement notes explain that on 1 September 2025, DIAL issued Rs 1,000 crore of listed NCDs and used the proceeds to repay the 2027 NCDs in full. These NCDs have a fixed rate of 8.75% for the first 60 months and are then reset at a spread over the repo rate, with final maturity on 1 September 2040. Although the NCDs are described as unsecured under the Companies Act and LODR, they are also described as having a first-ranking pari-passu charge, to the extent permitted under the OMDA, over future revenue, receivables, the Trust and Retention Account, reserves, insurance proceeds, and rights under project documents.

The domestic NCD issuance and ICRA's reaffirmation of AA(Stable) support access to the domestic capital market. However, for investors in the DIALIN US dollar bonds, the lengthening of domestic NCDs is not always an unconditional positive. If domestic NCDs, bank borrowings, and US dollar bonds all refer to the same DIAL cash flow and share collateral, accounts, and priority, additional debt, collateral sharing, maturity distribution, and restricted-payment provisions need to be confirmed.

As liquidity buffers, DIAL had current investments of Rs 1,221.47 crore, cash and cash equivalents of Rs 81.14 crore, and other bank balances of Rs 48.76 crore at FY2026-end. However, compared with current borrowings of Rs 4,952.77 crore and current liabilities of Rs 7,448.87 crore, on-balance-sheet liquidity alone is not large enough to eliminate maturity risk. DIAL's credit quality is supported by the combination of improved operating cash flow and refinancing access.

The going-concern note should not be read either too negatively or too positively. The audited financial statements have been prepared on a going-concern basis, and the company believes it can settle liabilities in the normal course of business based on its refinancing plan and undrawn sanctioned credit facilities. This does not mean there is an immediate liquidity crisis. At the same time, the fact that short-term liabilities are large enough to require such a note is a clear monitoring point for bondholders. Until the 2026 foreign-currency notes are refinanced and the post-refinancing interest rate, currency, hedging, maturity, and collateral-sharing structure are confirmed, investors should not over-upgrade the liquidity assessment solely because FY2026 results were strong.

Foreign-currency bond investors also face specific issues. DIAL's revenue is mainly rupee-denominated, while repayment of US dollar debt involves foreign-exchange hedging, foreign-currency funding, regulatory conditions for foreign-currency borrowing, and US dollar interest rates. If the foreign-currency notes are refinanced with domestic NCDs, currency mismatch may decline, but domestic interest rates, the difference between long-term fixed and floating rates, collateral sharing, and the redemption schedule of rupee debt need to be confirmed. If US dollar bonds remain outstanding, the hedge ratio and hedge maturity are particularly important.

7. Rating Agency View

DIAL's ratings need to be viewed separately for the domestic market and the international market. In the BSE notice dated 21 May 2026, ICRA reaffirmed DIAL's NCDs at [ICRA]AA(Stable). The instruments covered include NCDs such as INE657H08027, INE657H08035, INE657H08043, and INE657H08050, with reaffirmed NCD amounts of Rs 1,200 crore, Rs 744 crore, Rs 800 crore, and Rs 2,513 crore. This supports DIAL's business base, regulated tariffs, and domestic funding capacity from the perspective of domestic investors.

By contrast, under the existing international rating, S&P rates DIAL at BB/Positive and the senior secured notes at BB. S&P's view is supported by CP4 tariffs, airport demand, and recovery prospects, while constrained by high leverage, foreign-currency bond refinancing, regulatory and litigation issues, and single-airport concentration. DIALIN bond investors should not interpret a domestic AA rating as equivalent to an international AA rating or investment-grade status.

For CRISIL, the existing report confirms a CRISIL AA/Stable rating dated 5 August 2025. ICRA and CRISIL domestic ratings indicate credit access to domestic NCD and bank markets. By contrast, S&P's BB/Positive is a global-comparison rating for foreign-currency bond investors and more strongly reflects foreign exchange, international bond markets, country risk, foreign-currency refinancing, and recovery structure.

The rating view has been positively reinforced by the FY2026 results. DSCR of 2.01x, ISCR of 2.08x, and full-year profitability are positive factors for both domestic and international rating agencies. However, given the remaining 2026 foreign-currency bond refinancing, CP4 and AAI-related disputes, and current liabilities exceeding current assets, it would be premature to conclude that ratings will immediately move substantially upward.

In terms of rating sensitivities, the key factors to monitor are funding and regulatory sustainability rather than operating results alone. Based only on FY2026 numbers, coverage metrics have clearly improved. However, rating agencies usually focus more on the post-refinancing debt structure, FY2027 onward DSCR, the continuity of CP4 revenue, the AAI dispute, capital expenditure, and on-balance-sheet liquidity than on a single year's profit. For DIAL, smooth handling of the 2026 foreign-currency notes and maintenance of FY2027 revenue will be near-term factors in confirming the rating direction.

8. Credit Positioning

Among Indian airport-infrastructure issuers, DIAL is a relatively strong credit in terms of asset quality and scale. Delhi Airport's FY2026 passenger traffic of 78.7 million, its position as a National Capital Region gateway, the AERA CP4 tariff, non-aeronautical revenue, and domestic AA rating increase the predictability of repayment sources compared with a typical private-sector corporate.

At the same time, DIAL's credit risk is higher than that of a fully government-guaranteed quasi-sovereign or a regulated utility with multiple assets. Constraints include single-airport concentration, high revenue sharing with AAI, regulatory disputes, foreign-currency bond refinancing, and thin equity. The airport has high public importance, but no government guarantee for the bonds has been confirmed. Therefore, DIAL is a private concession debtor with a strong airport asset, not an airport bond close to sovereign debt.

Compared with GMR Hyderabad International Airport Limited (GHIAL), another GMR-linked airport, DIAL has a larger passenger base, but its revenue-sharing ratio with AAI is heavy at 45.99%, and the 2026 foreign-currency bond maturity is close. GHIAL has a higher domestic rating, and its refinancing of foreign-currency notes through domestic NCDs in January 2026 has been confirmed. DIAL is also expanding its funding options through domestic NCDs and CP4 revenue improvement. For both issuers, domestic ratings and foreign-currency bond ratings need to be treated separately.

The timing of tariff frameworks is also important when comparing airport infrastructure issuers. DIAL's CP4 tariff began to take effect from April 2025, and the FY2026 results showed a large improvement. GHIAL has its own control period and tariff issues, so even airports in the same GMR group do not have identical regulatory cycles. Therefore, DIAL's FY2026 improvement should not be mechanically extended to all airports in the same group, and conversely, other airports' ratings or refinancing track records should not be applied directly to DIAL.

This report does not make a cheap-or-rich conclusion on individual bond relative value because it has not verified prices, yields, spreads, liquidity, or dealer runs. An investment decision on DIALIN 2029 requires confirmation of the 2026 foreign-currency bond refinancing, the current price, yield, and spread of DIALIN 2029, and comparison with Indian airport bonds and broader Indian infrastructure foreign-currency bonds of similar maturity.

From a credit-fundamental perspective alone, it is natural to position DIAL as a BB-category airport concession for which post-CP4 revenue improvement has been confirmed on a full-year basis, but debt quantum and short-term refinancing still require confirmation. The FY2026 results positively confirm the existing view, but they do not eliminate refinancing risk.

9. Key Credit Strengths and Constraints

DIAL's first credit strength is the Delhi Airport franchise. FY2026 passenger traffic of 78.7 million, current capacity of 100 million passengers, and maximum capacity of 119 million passengers demonstrate its position as one of India's largest airport gateways. It is a single asset, but the quality of that single asset is high.

The second strength is revenue improvement from the CP4 tariff. FY2026 operating revenue increased significantly year on year, EBITDA rose to Rs 2,882.43 crore, and profit after tax turned positive. The improvement in DSCR and ISCR to around 2.0x shows that CP4 is supporting not only accounting profit but also debt-service capacity.

The third strength is access to the domestic capital market. ICRA reaffirmed the NCDs at [ICRA]AA(Stable) in May 2026, and DIAL also issued Rs 1,000 crore of long-term NCDs in September 2025. Access to the domestic NCD market and bank lines is an important credit factor that can supplement foreign-currency bond refinancing.

The fourth strength is the secured-bond structure and a degree of recovery prospects. S&P assigns DIAL's senior secured debt a recovery rating of 3 and an estimated recovery rate of 65%. The strong airport business value, collateral based on revenue, accounts, and project documents, and the regulated tariff framework may provide protection that differs from unsecured corporate bonds.

The first constraint is high leverage. The debt/equity ratio was still 14.61x in FY2026, and total debt / total assets was 0.66x. Net worth improved, but accounting equity remains thin. High leverage may be more tolerable for a large airport concession, but shock-absorption capacity is limited.

The second constraint is refinancing of the 2026 foreign-currency notes. Current borrowings at FY2026-end were Rs 4,952.77 crore, and current liabilities significantly exceeded current assets. The company relies on a refinancing plan and undrawn sanctioned credit facilities, but based only on public information, the completion status, outstanding balance, terms, and hedge position of the refinancing have not been confirmed.

The third constraint is the AAI fee and regulatory disputes. The annual fee to AAI was Rs 3,231.94 crore in FY2026 and absorbed a significant portion of the operating-revenue improvement. DIAL has favourable decisions in the COVID-period MAF dispute, but AAI's appeal remains, and DIAL's appeal against the CP4 tariff also remains.

The fourth constraint is single-airport concentration and foreign-currency bond-specific risk. DIAL's revenue is mainly rupee-denominated, while US dollar debt involves foreign exchange, hedging, foreign-currency markets, and international investor risk appetite. Domestic AA ratings and the public importance of the airport do not eliminate these foreign-currency bond-specific risks.

10. Downside Scenarios and Monitoring Triggers

The most important downside scenario is that refinancing of the 2026 foreign-currency notes proves more difficult than expected. The FY2026 results confirm operating improvement, but current borrowings and current liabilities remain large. If refinancing terms deteriorate and US dollar rates, hedging costs, the domestic NCD market, or bank lines become less favourable, part of the operating cash flow improved by CP4 would be absorbed by finance costs.

The second downside scenario is that the CP4 tariff improvement is weakened by future adjustments or disputes. The effect of the new tariff was strong in FY2026, but DIAL has appealed parts of the CP4 order to TDSAT. If disputes remain among AERA, airlines, users, and DIAL over regulatory assets, true-ups, non-aeronautical revenue, cost recovery, taxes, and user charges, confidence in future cash flow would decline.

The third downside scenario is that the dispute with AAI or the value-allocation mechanism under the OMDA moves unfavourably. DIAL has obtained a favourable arbitral award and High Court decision on the waiver of MAF payment during the COVID period, but AAI's appeal remains. The base for calculating the AAI fee, excluded items, payment timing, prior-period claims, and the treatment of OMDA extension or termination are directly relevant to DIAL creditors' recovery source.

The fourth downside scenario is underperformance in passenger traffic or non-aeronautical revenue. FY2026 passenger traffic was 78.7 million and only slightly down, but air demand is affected by fuel prices, airline capacity, geopolitics, airspace restrictions, the economy, infectious disease, and safety issues. Because DIAL is concentrated in a single airport, Delhi Airport-specific operating disruptions would affect the whole company.

The fifth downside scenario is that the impact of Jewar / Noida Airport emerges earlier than expected or in higher-margin areas. Monitoring needs to cover not only passenger numbers, but also the impact on international routes, cargo, advertising, parking, hotels, duty-free, low-cost carriers, airline base allocation, and commercial development.

The monitoring items are as follows.

11. Credit View and Monitoring Focus

DIAL's current credit quality should be viewed from the perspective of international foreign-currency bonds as an upper high-yield airport-concession credit broadly consistent with S&P's BB/Positive rating. The credit direction can be assessed as moderately improving because the FY2026 results confirmed post-CP4 revenue improvement and DSCR improvement on a full-year basis. The probability of rapid credit deterioration has declined when viewed only from the operating side, but the liquidity view remains provisional as long as refinancing of the 2026 foreign-currency notes is unconfirmed.

The core supports for this view are the strong single asset of Delhi Airport and the realised improvement after the CP4 tariff. FY2026 passenger traffic of 78.7 million, operating revenue of Rs 7,568.04 crore, EBITDA of Rs 2,882.43 crore, DSCR of 2.01x, and ISCR of 2.08x show that DIAL has gradually started to absorb the heavy finance costs and depreciation after Phase 3A. The previous report characterised the position as the start of improvement based on H1 and Q3 supplementary information; the FY2026 audited results now take this one step further to confirmation of full-year improvement.

However, the constraints on credit quality remain significant. The debt/equity ratio was still 14.61x in FY2026, and current liabilities exceeded current assets by Rs 4,082.82 crore. For the senior secured foreign-currency notes due in October 2026, the company relies on a refinancing plan and undrawn credit facilities, but completion cannot be confirmed from public information alone. Revenue sharing with AAI reached Rs 3,231.94 crore in FY2026, and the AAI appeal and CP4 appeal remain. DIAL's improvement is real, but bondholders still need confirmation of refinancing and regulatory disputes before materially lowering required returns.

For investors in DIALIN 2029, the current results support the hold/investment case. The improvement in DSCR to around 2.0x in FY2026 strengthens DIAL's underlying repayment capacity toward the 2029 maturity. However, the 2026 foreign-currency notes mature before the 2029 notes, and smooth passage through that maturity is the near-term test. If refinancing of the 2026 notes is confirmed and post-CP4 revenue and DSCR are maintained in FY2027, the credit view on DIALIN 2029 would become more stable. Conversely, if refinancing terms are heavy, there are adverse developments in CP4 or AAI litigation, or passenger and non-aeronautical revenue underperform, the FY2026 improvement cannot simply be extrapolated into the future.

Investors should treat domestic ICRA AA(Stable) as support for domestic funding access, while separately assessing the foreign-currency bonds based on S&P's BB/Positive global credit level, US dollar debt, hedging, collateral, recovery, and liquidity. DIAL is an issuer with a good airport asset and CP4-driven improvement, but it is not an issuer whose short-term maturity risk has disappeared because of a government guarantee. The next review should prioritise confirmation of the refinancing completion for the 2026 foreign-currency notes, post-CP4 realised revenue from Q1 FY2027 onward, the AAI appeal, the CP4 appeal, and the terms of any additional domestic NCDs.

12. Short Summary & Conclusion

Delhi International Airport Limited is one of India's largest airport concession issuers and operates IGI Airport. Its FY2026 results confirmed full-year improvement in operating revenue, EBITDA, profitability, and DSCR after the CP4 tariff. The credit view is moderately improving, but the main constraints remain refinancing of the October 2026 foreign-currency notes, the 45.99% revenue share to AAI, AAI- and CP4-related disputes, and single-airport concentration. DIALIN 2029 can be assessed as a secured foreign-currency bond backed by a strong airport asset, but the domestic AA rating and AAI shareholding should not be confused with a government guarantee or international investment-grade status.

13. Sources

1. Delhi International Airport Limited / BSE, Submission of audited financial results for the quarter and financial year ended March 31, 2026, submitted May 27, 2026.
   https://www.bseindia.com/xml-data/corpfiling/AttachLive/e0964d4b-9fad-4828-b864-73c5c63de212.pdf

2. Delhi International Airport Limited / BSE, Outcome of the Board Meeting of DIAL - May 27, 2026.
   https://www.bseindia.com/xml-data/corpfiling/AttachLive/685681ef-763f-4bc1-af71-4edbdcd1256f.pdf

3. Delhi International Airport Limited / BSE, Intimation under Regulation 55 regarding ICRA credit rating reaffirmation, May 21, 2026.
   https://www.bseindia.com/xml-data/corpfiling/AttachLive/40110653-4996-4d85-9e76-8794da00698c.pdf

4. GMR Airports Limited, Investor Presentation Q4 FY2026, May 2026.
   https://investor.gmraero.com/pdf/GMR%20Airports%20Ltd.%20-%20Investor%20Presentation%20-%20Q4FY26.pdf

5. Delhi International Airport Limited, Unaudited Standalone Financial Results for the quarter and half year ended 30 Sep 2025, 13 Nov 2025.
   https://site.newdelhiairport.in/pdf/unaudited-standalone-financial-results-for-the-quarter-and-half-year-ended-september-30-2025-nov192025.pdf

6. GMR Airports Limited, press release, AERA issues tariff order for Delhi Airport for the fourth control period, 29 Mar 2025.
   https://investor.gmraero.com/pdf/29032025PRESS%20RELEASE.pdf

7. CRISIL Ratings, Rating rationale for Delhi International Airport Limited, 5 Aug 2025.
   https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/DelhiInternationalAirportLimited_August%2005_%202025_RR_374914.html

8. S&P Global Ratings, Delhi International Airport Ltd. upgraded to BB/Positive, senior secured notes affirmed BB, 24 Apr 2025.
   https://www.spglobal.com/ratings/pt/regulatory/article/-/view/type/HTML/id/3358068

9. S&P Global Ratings, Indian Corporate and Project Finance Ratings Affirmed; Recovery Ratings Assigned, including Delhi International Airport Limited senior secured debt recovery rating, 2025.
   https://www.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/101661161

10. Delhi International Airport Limited, General Information Document, 21 Aug 2025, including definitions of 2026 Notes and 2029 Notes.
    https://site.newdelhiairport.in/pdf/DIAL-GID-August%2021%2C2025.pdf

11. Airports Authority of India, FAQ on revenue share percentage for Delhi and Mumbai airports.
    https://www.aai.aero/en/content/what-percentage-share-revenue-these-airports

14. Unverified / Pending

• Current outstanding balance of the senior secured foreign-currency notes maturing in October 2026, refinancing completion status, refinancing terms, hedge unwind, and amount of undrawn sanctioned credit facilities.
• Full offering memorandum and indenture for DIALIN 6.45% due 2029, including collateral scope, additional-debt restrictions, restricted payments, change of control, cross default, tax gross-up, and governing-law details.
• Full FY2026 annual report. The materials reviewed for this report are the audited financial-results package submitted to BSE, and additional notes in the full annual report have not been confirmed.
• Progress after 12 August 2026 in the AAI MAF appeal, and progress after 28 May 2026 in the CP4 tariff appeal. As of the preparation date of this report, the result after the 28 May 2026 hearing has not been confirmed.
• DIAL's debt maturity profile, debt by currency, fixed/floating rate mix, foreign-exchange hedge ratio, hedge maturities, and DSRA / reserve balances.
• Latest primary rating releases on DIAL from Fitch and Moody's.
• Current price, yield, Z-spread, G-spread, liquidity, and relative value of DIALIN 2029 versus Indian infrastructure bonds of similar maturity.