Issuer Summary: GMR Hyderabad International Airport Limited

Date prepared: 2026-05-12
Issuer: GMR Hyderabad International Airport Limited
Market reference name: GMRLIN / GMR Hyderabad International Airport Limited
Report type: issuer_summary

Note: This report uses crore rupees, million rupees, and billion rupees in parallel, in line with company disclosures and SGX disclosures. INR 1 crore equals INR 10 million. Unless otherwise stated, figures are based on public information available as of 12 May 2026. GMRLIN is used as the market credit name referring to the company’s US dollar bonds.

1. Business Snapshot and Recent Developments

GMR Hyderabad International Airport Limited is an airport concession company that operates and develops Rajiv Gandhi International Airport in Hyderabad, Telangana, India. It should be viewed not as a conventional manufacturing company or trading house, but as an infrastructure issuer whose credit quality is driven by airport passenger and cargo demand, aeronautical tariffs, non-aeronautical revenue, commercial real estate, debt structure, and the regulatory tariff regime. The company holds a 60-year concession from 23 March 2008. GMR Airports Limited owns 74%, while the Airports Authority of India and the Telangana state government each own 13%. The issuer is therefore a privately operated airport company in business terms, while also being a public infrastructure issuer subject to involvement from government-related shareholders and regulators.

The company’s airport is the main international airport serving the Hyderabad metropolitan area and the surrounding economic region. GMR Group’s airport page states that, as of FY2025-26, the airport had annual passengers of more than 31 million, more than 100 destinations, annual cargo of more than 194 thousand tonnes, and annual passenger handling capacity of 40 million. GMR Airports Limited’s Q3 FY26 investor presentation states that FY2025 passenger traffic was 29.5 million, current capacity was 34 million, and maximum capacity was 80 million. For credit analysis, the more important point is not the precise design capacity itself, but that passenger growth, the tariff regime, the stage of capital expenditure, and funding move together.

The recent operating environment has moved beyond the post-Covid recovery phase and into a phase where the key question is how demand growth translates into tariffs, non-aeronautical revenue, and refinancing. According to the H1 FY26 Operating and Financial Review posted on SGX, total passenger traffic for the six months ended September 2025 was 15.38 million, up 12.56% year on year, with domestic passengers of 12.66 million and international passengers of 2.72 million. Aircraft movements were 107,036, up 10.81%, and cargo handled was 88,885 tonnes, up 5.98%. GMR Airports Limited’s Q3 FY26 materials state that Hyderabad airport’s 9MFY26 passenger traffic was 23.2 million, up 7.3% year on year, with 19.0 million domestic passengers and 4.2 million international passengers.

Financially, H1 FY26 consolidated revenue from operations was INR 20,660.2 million, total revenue was INR 21,570.3 million, and profit after tax was INR 3,571.5 million. Adjusted EBITDA margin for H1 FY26 was stated at 64% of total revenue, improving from 61% in the prior-year period. The airport business has a high fixed-cost component, and growth in passengers, user development fees, commercial revenue, parking, advertising, food and beverage, and duty-free revenue tends to lift margins as utilisation improves. At the same time, the company carries significant debt and is affected by tariff regulation and refinancing, so credit quality cannot be assessed from revenue growth alone.

The most important recent financing event is the domestic NCD issuance in January 2026 and the refinancing of US dollar debt. GMR Airports Limited’s Q3 FY26 materials explain that, on 22 January 2026, the company issued 15-year NCDs of INR 21 billion at a 7.6% coupon and used the proceeds to refinance US dollar debt. In January 2026, ICRA and CRISIL each reaffirmed the AA+ rating, revised the outlook to Positive, and added INR 2,150 crore of NCDs to the rated instruments. INR 21 billion is equivalent to INR 2,100 crore, and this appears to refer to the same scale of NCDs as the INR 2,150 crore amount. However, the difference among the actual issuance amount, rated amount, and issuance limit cannot be fully reconciled from public materials alone. This report therefore treats the NCD as a positive factor demonstrating access to the domestic capital market, while not treating the full redemption of the February 2026 US dollar bonds and a zero remaining balance as confirmed facts.

However, as of 12 May 2026, public materials alone do not allow full reconciliation of the final redemption completion, remaining balance, hedge unwind, and post-NCD debt composition for the 4.75% Senior Secured Notes due February 2026. The SGX financials as of September 2025 recorded principal of US$287.32 million for the 4.75% Senior Secured Notes due 2026 and principal of US$350 million for the 4.25% Senior Secured Notes due 2027. The February 2026 bonds had already matured as of the preparation date of this report, and for investment purposes should be treated not as “approaching maturity” but as “requiring confirmation of post-maturity treatment.” The refinancing plan through domestic NCDs can be confirmed, but the current balance and terms of individual bonds require separate confirmation.

In one sentence, GHIAL is an airport infrastructure issuer supported by Hyderabad’s air traffic demand, regulated tariffs, non-aeronautical revenue, and a long-term concession. It is positioned as a high investment-grade issuer in domestic ratings, while from the perspective of foreign-currency bond investors it is viewed as a BB-rated private airport concession credit. In assessing credit quality, it is necessary to examine not only the strength of passenger growth, but also the tariff transition from AERA’s third control period to fourth control period, progress in refinancing foreign-currency debt through domestic NCDs, the balance between dividends and investment, and legal protection for bondholders.

2. Industry Position and Franchise Strength

Hyderabad airport’s franchise is supported by regional monopoly characteristics, a growing metropolitan area, expansion of international and domestic routes, and growth in non-aeronautical revenue. Airport infrastructure is not a business in which competing airports can easily be built within the same metropolitan area. Airlines, passengers, logistics operators, and commercial facilities gather at a single transport node, making location and the concession important barriers to entry. Hyderabad is a city with concentrations in IT, pharmaceuticals, business services, and manufacturing, and has a demand base in both domestic and international routes.

The company’s strength lies in the way passenger growth flows through to multiple revenue sources. Aeronautical revenue includes landing charges, parking charges, user development fees, and cargo, while non-aeronautical revenue includes duty-free shops, retail, food and beverage, advertising, parking, rentals, and MRO-related revenue. GMR’s 9MFY26 materials show Hyderabad airport’s non-aeronautical revenue at INR 5.8 billion, up 26% year on year.

In evaluating an airport company’s franchise, it is necessary to distinguish the quantity and quality of demand. Domestic passengers are more sensitive to fare levels, airline capacity, the economy, and fuel prices, while international passengers tend to have a stronger impact on non-aeronautical spend per passenger, including duty-free and food and beverage. In H1 FY26, domestic passengers were 12.66 million and international passengers were 2.72 million, making domestic traffic the larger base. The share of international passengers remains limited, but given duty-free profitability and room for international connectivity expansion, growth in international routes affects the quality of non-aeronautical revenue.

Cargo is smaller in scale than passenger traffic, but it is a revenue source reflecting Hyderabad’s industrial base. Cargo handled in H1 FY26 was 88,885 tonnes, up 5.98% year on year, and GMR’s airport page states annual cargo of more than 194 thousand tonnes. However, cargo revenue is not large enough to drive the overall profile to the same extent as passenger and non-aeronautical revenue. The main credit drivers are passenger traffic, tariffs, and non-aeronautical revenue.

The regulatory position is also important. GHIAL’s aeronautical tariffs are regulated by the Airports Economic Regulatory Authority of India. AERA sets tariffs for each control period, taking into account aeronautical revenue, the regulatory asset base, operating costs, investment, and the treatment of non-aeronautical revenue. This gives the airport company a framework for cost recovery, while also meaning that delays in tariff decisions, disputes, treatment of non-aeronautical revenue, and changes in user development fees can have significant effects on revenue and cash flow.

GMR’s Q3 FY26 materials show CP3 as running from 1 April 2021 to 31 March 2026, and CP4 from 1 April 2026 to 31 March 2031. CP4 is an important unresolved issue as of the preparation date of this report. Even if airport demand is growing, if tariff levels are reduced, recovery is delayed, disputes are prolonged, or the treatment of unrecovered amounts is unfavourable, debt repayment capacity will be constrained. AERA regulation is therefore both a system that supports credit quality and a source of regulatory lag and policy-decision risk.

The credit sensitivity of CP4 needs to be assessed separately from passenger numbers. If user development fees or landing and parking charges are set below expectations, aeronautical revenue and EBITDA would underperform for the same passenger count. If recovery of unrecovered amounts from prior periods is delayed or treated unfavourably, operating cash flow and short-term liquidity would be affected. If deductions or adjustments to non-aeronautical revenue are expanded, growth in commercial revenue may be partly offset by lower aeronautical tariffs, slowing improvement in debt metrics. CP4 is therefore not merely a regulatory event, but is directly linked to EBITDA, operating cash flow, potential domestic-rating improvement, and refinancing capacity for the 2027 US dollar bonds.

On the sponsor side, GMR Airports Limited is the major shareholder, and Groupe ADP is involved at the GMR Airports level. International airport operating know-how, a multi-airport portfolio, and capital-market access are credit-supportive. However, it has not been confirmed that the parent company or government-related shareholders provide an explicit guarantee for GHIAL debt. For bondholders, guarantees, collateral, escrow arrangements, covenants, and the legal flow of cash need to be separately confirmed.

3. Segment Assessment

GHIAL’s revenue is best understood in three broad categories: aeronautical, non-aeronautical, and non-airport services. Of H1 FY26 revenue from operations of INR 20,660.2 million, aeronautical revenue was INR 9,547.8 million, non-aeronautical revenue was INR 9,200.9 million, and non-airport services were INR 1,911.5 million. The near balance between aeronautical and non-aeronautical revenue is important. The airport business is affected by regulated tariffs, but as non-aeronautical revenue grows, the issuer moves somewhat away from simple dependence on aeronautical tariffs, and the quality of passenger spending, facility use, and commercial development becomes relevant to credit quality.

The core components of aeronautical revenue are user development fees, landing and parking charges, cargo, ground handling, and fuel facilities. In H1 FY26, user development fees were INR 5,297.2 million, landing and parking charges were INR 1,956.3 million, and cargo revenue was INR 1,341.0 million. Aeronautical revenue tends to be linked to passengers, aircraft movements, and cargo, but it is strongly affected by the tariff regime. Even if passenger traffic grows, revenue growth may be partly offset if user development fees or aeronautical charges are reduced by regulation.

In non-aeronautical revenue, duty-free, food and beverage, retail, advertising, parking, rentals, and MRO-related revenue are important. In H1 FY26, duty-free revenue was INR 2,961.9 million, food and beverage was INR 763.5 million, advertising was INR 472.9 million, and parking was INR 424.7 million. GMR’s 9MFY26 materials show non-aeronautical revenue of INR 5.8 billion, duty-free spend per passenger of INR 823, food and beverage revenue of INR 1.2 billion, and advertising revenue of INR 0.8 billion. Non-aeronautical revenue depends on the international-passenger mix, passenger dwell time, tenant mix, space development, and commercial contracts, so it cannot be evaluated solely by air traffic volumes.

Non-airport services and surrounding development provide long-term growth potential while also broadening the issuer’s risk. In H1 FY26, commercial property development was INR 1,374.6 million and hospitality services were INR 536.9 million. Real estate, hotels, and MRO carry demand, competition, and investment risks that differ from airport tariffs. It is therefore necessary to check whether these are supplementary revenue streams or businesses that increase additional investment and cyclical sensitivity.

A breakdown of revenue shows that GHIAL is not a company supported only by regulated charges from airlines and passengers.

Note: Source is SGX H1 FY26 Operating and Financial Review. Ratios are approximate figures relative to revenue from operations of INR 20,660.2 million.

Two points should be drawn from this composition. First, because non-aeronautical revenue is large, airport profitability is affected by commercial operating capability beyond passenger numbers. Second, the treatment of non-aeronautical revenue in AERA’s tariff calculation affects the balance between aeronautical tariffs and total revenue. From a regulatory perspective, high non-aeronautical revenue can be a factor leading to lower tariffs, so growth in non-aeronautical revenue is not always a pure positive. If non-aeronautical revenue deductions work more unfavourably in CP4, growth in duty-free and food and beverage may support total revenue while restraining upside in aeronautical revenue through regulated tariffs. Credit analysis must consider total revenue, regulated revenue, non-regulated revenue, cost recovery, and investment burden together.

4. Financial Profile and Analysis

GHIAL’s financial profile shows strong operating recovery and high margins, but the balance sheet carries a high debt burden. As an airport concession company, if demand grows and tariffs and non-aeronautical revenue increase, operating cash flow becomes stronger. At the same time, if capital expenditure, tariff disputes, dividends, foreign-currency bond refinancing, and longer-tenor domestic NCDs overlap, accounting profit and debt repayment capacity do not necessarily move in line.

In H1 FY26 consolidated profit and loss, revenue from operations was INR 20,660.2 million, total revenue was INR 21,570.3 million, finance cost was INR 3,672.2 million, depreciation and amortisation was INR 2,776.2 million, and profit after tax was INR 3,571.5 million. Operating cash flow was INR 8,487.1 million, cash outflow from investing activities was INR 4,229.4 million, and cash outflow from financing activities was INR 4,362.3 million. The picture in which operating cash flow broadly absorbs investment and financing outflows is positive, but these are half-year figures, and capacity cannot be judged without looking at full-year investment, refinancing, and dividends.

The main consolidated metrics are as follows.

Note: H1 FY26 is based on the SGX H1 FY26 Operating and Financial Review. Some H1 FY25 metrics are approximate figures derived from rates of change and are not used in the text as the basis for precise financial analysis.

The same direction can be confirmed from the 9MFY26 standalone indicators for Hyderabad airport shown by GMR Airports Limited. In 9MFY26, net income was INR 18,796 million, up 11.1% year on year, EBITDA was INR 12,493 million, up 11.8%, interest was INR 4,996 million, down 1.5%, and PAT was INR 2,483 million, up 55.1%. The fact that PAT growth exceeded passenger growth may reflect the effects of non-aeronautical revenue, tariffs, cost absorption, and stable interest burden.

Note: Source is GMR Airports Limited Q3 FY26 Investor Presentation. The scope and period differ from the H1 consolidated table, so the figures should not be simply added together.

The balance-sheet constraints are clear. In the SGX consolidated financials as of September 2025, total assets were INR 13,287.16 crore, total equity was INR 2,270.15 crore, and total liabilities were INR 11,017.01 crore. Borrowings consisted of non-current borrowings of INR 6,584.37 crore and current borrowings of INR 2,674.24 crore, for total borrowings of INR 9,258.61 crore. Meanwhile, cash and cash equivalents were INR 126.28 crore, bank balances other than cash were INR 72.02 crore, and current investments were INR 1,277.43 crore. A simple sum of these short-term liquidity sources is INR 1,475.73 crore, below current borrowings of INR 2,674.24 crore.

Note: Source is SGX H1 FY26 Unaudited Condensed Interim Consolidated Financials. These are not post-NCD refinancing balances as of May 2026.

This table shows that it is insufficient to read GHIAL’s financial profile as “low risk because margins are high.” Operating cash flow is strong, but borrowings are large, and short-term debt exceeded liquid assets as of September 2025. The January 2026 issuance of INR 21 billion of NCDs likely reduced near-term maturity risk related to the February 2026 US dollar bonds. However, because the post-NCD balance sheet, redemption completion of the February 2026 bonds, remaining foreign-currency bonds, bank lines, DSRA, and restricted deposits have not been confirmed, the liquidity assessment remains provisional.

The quality of earnings depends on non-aeronautical revenue and the tariff regime. The adjusted EBITDA margin of 64% is very high, but it includes the contribution from the fixed-cost nature of the airport business, user development fees, duty-free, commercial facilities, MRO, and land leasing. Margins tend to improve when passengers are growing, but if a passenger shock occurs, fixed costs and interest payments become a heavy burden. In a period of sharp demand decline such as the Covid period, short-term cash flow can deteriorate rapidly even with an airport’s regional monopoly characteristics.

Overall, the financial profile is strong operationally, while retaining high leverage and refinancing dependence on the debt side. Long-term funding through domestic NCDs and the Positive outlook are favourable, but it cannot be concluded that credit quality has improved by a full notch without confirming CP4 tariffs, foreign-currency bond balances, dividends, and future investment in airport expansion and commercial development.

5. Structural Considerations for Bondholders

For bondholders, the most important issues are which entity owes the debt, which cash flows are used for debt repayment and in what order, and what support can be legally enforced. GHIAL is the airport-operating concession company, and the fact that airport revenue flows into the issuer itself is easier to understand than a pure holding-company structure. At the same time, bondholder protection is not simple because of the concession, government-related shareholders, regulated tariffs, subsidiaries and adjacent businesses, and the coexistence of foreign-currency bonds and domestic NCDs.

First, GHIAL is not a wholly owned subsidiary of the GMR group. GMR Airports Limited owns 74%, while the Airports Authority of India and the Telangana state government each own 13%. CRISIL notes that AAI and the Telangana state government have board representation, and that GHIAL is ring-fenced from the GMR group and has an escrow account and payment waterfall. This is positive from the perspective of governance and debt repayment priority. However, this description is a general structural assessment confirmed in rating-agency materials, and does not mean that the same collateral, cash trap, and dividend restrictions apply to all foreign-currency bonds, existing domestic NCDs, the January 2026 NCDs, and bank facilities.

However, the ownership stakes of AAI and the Telangana state government do not imply an explicit guarantee for the bonds. Public importance, government-related shareholders, and regulatory involvement may raise expectations of support, but for bondholders it remains necessary to confirm guarantee agreements, collateral agreements, escrow arrangements, debt incurrence limitations, dividend restrictions, and financial covenants. The presence of government-related shareholders should not be confused with a sovereign guarantee or government-guaranteed bonds.

For the foreign-currency bonds, the issuance terms of the US$350 million 4.25% Senior Secured Notes due 2027 can be confirmed from the 2017 SGX Offering Memorandum. The SGX financials as of September 2025 recorded the US$287.32 million 4.75% Senior Secured Notes due 2026 in addition to the 2027 bonds. Both are described as senior secured notes, but before making an individual investment, the specific collateral package, restricted payments, change of control, cross default, pari passu debt, and additional debt issuance restrictions need to be confirmed in the Offering Memorandum and supplementary disclosures.

For domestic NCDs, ICRA had rated multiple NCDs maturing in 2032, 2033, and 2034 as of March 2025, and added INR 2,150 crore of additional NCDs to the rated instruments in January 2026. CRISIL also assigned Crisil AA+/Positive to the same amount of NCDs in January 2026. Domestic NCDs reduce refinancing risk by extending maturity, but they do not necessarily have the same collateral, covenants, and waterfall as the foreign-currency bonds. In particular, the January 2026 NCDs are explained as having been used to refinance US dollar bonds, but it is unconfirmed whether they carry the same protection as foreign-currency bondholders, whether they rank pari passu with existing NCDs and bank facilities, and how dividend restrictions or cash traps operate. The relative priority among domestic NCD holders, foreign-currency bondholders, banks, and hedge counterparties needs to be confirmed in the specific contracts.

The structural issues can be summarised as follows.

This structure is relatively straightforward in that airport operating cash flow is the direct repayment source, but differences in protection among bond classes cannot be ignored. In particular, in a phase where refinancing shifts from foreign-currency bonds to domestic NCDs, collateral, hedges, currency, maturity, and restrictive covenants may change. This report, which evaluates issuer credit, focuses on overall repayment capacity, but for investment in individual bonds, confirmation of each debt instrument’s terms is essential.

6. Capital Structure, Liquidity and Funding

As of September 2025, GHIAL’s capital structure had a large borrowing balance and short-term refinancing pressure, but the January 2026 domestic NCD issuance likely improved the maturity profile. The important points are that the company was able to execute refinancing in the market and that domestic rating agencies revised the outlook to Positive. At the same time, post-NCD foreign-currency bond balances, hedge unwind, the debt maturity schedule, and NCD terms cannot be fully confirmed from public information alone.

In the consolidated financials as of September 2025, total borrowings were INR 9,258.61 crore. Of this, current borrowings were large at INR 2,674.24 crore, and the US dollar bonds due February 2026 appear to have been the main component of short-term debt. According to GMR’s Q3 FY26 materials, the company issued 15-year NCDs of INR 21 billion, or INR 2,100 crore, on 22 January 2026 and used the proceeds to refinance US dollar debt. The difference from the ICRA/CRISIL rated amount of INR 2,150 crore is small, but it is unconfirmed whether this reflects rounding, an issuance limit, a rated amount, or the actual issuance amount. This is therefore viewed positively as a move toward converting short-term foreign-currency debt into long-term rupee debt, while full redemption of the February 2026 bonds and a zero remaining balance still require separate confirmation.

However, currency risk has not disappeared completely. The September 2025 financial notes state that the company uses cross-currency swaps for principal and interest on the US$350 million 4.25% Senior Secured Notes due 2027. For the US$287.32 million 4.75% Senior Secured Notes due 2026, the notes stated that the company used a call spread for the principal portion and coupon-only swaps for semi-annual interest. Hedges are an important protection, but hedge counterparties, collateral posting, mark-to-market movements, unwind costs, and post-refinancing treatment need confirmation.

Liquidity looks thin if assessed only by cash. As of September 2025, cash and cash equivalents were INR 126.28 crore, bank balances other than cash were INR 72.02 crore, and current investments were INR 1,277.43 crore, for a total of INR 1,475.73 crore. This was below current borrowings of INR 2,674.24 crore. Therefore, as of September 2025, the company’s liquidity depended significantly not only on internal funds but also on access to refinancing markets.

The January 2026 NCD issuance likely reduced short-term maturity risk. ICRA and CRISIL’s AA+/Positive ratings on INR 2,150 crore of NCDs demonstrate an ability to raise long-term funding from domestic institutional investors. The 7.6% coupon shown in GMR materials is nominally higher than the 4.75% and 4.25% coupons on the US dollar bonds recorded as of September 2025, but it is rupee-denominated and cannot be simply compared on a total-cost basis including hedging costs and currency risk. The direction of replacing foreign-currency bonds with long-term rupee bonds improves alignment with the issuer’s revenue currency. However, until post-refinancing cash, current borrowings, remaining foreign-currency bonds, bank lines, DSRA, and restricted deposits can be confirmed, the liquidity assessment remains provisional.

Dividends are also a funding-monitoring item. S&P’s May 2024 rating release assumed that GHIAL would pay a dividend equivalent to around 75% of adjusted EBITDA for the fiscal year ended March 2024. The payment of dividends itself is not unusual when an airport business has strong cash flow, but for an issuer with high debt, a tariff-regime transition, refinancing, and capital expenditure, dividends can become a credit constraint if they take priority over debt reduction and liquidity preservation. It is worth confirming the restricted-payment provisions of domestic NCDs and foreign-currency bonds.

The funding profile is summarised as follows.

The liquidity conclusion should remain a provisional assessment: short-term refinancing risk was significant as of September 2025, and the January 2026 domestic NCD issuance likely reduced that risk. Until the post-maturity treatment of the February 2026 bonds, the post-refinancing balance sheet, the refinancing plan for the 2027 bonds, the cash-flow impact of CP4 tariffs, and the dividend policy are confirmed, it is premature to conclude that liquidity is “strong.”

7. Rating Agency View

GHIAL’s ratings look different through domestic and global lenses. In domestic ratings, ICRA and CRISIL rate the company in the AA+ category with Positive outlooks, making it a high investment-grade issuer from the perspective of Indian banks and NCD investors. By contrast, S&P upgraded the issuer credit rating and senior secured debt rating to BB in May 2024 and assigned a Stable outlook. From the perspective of foreign-currency bond investors, GHIAL is a BB-rated Indian private airport concession credit.

On 8 January 2026, ICRA reaffirmed GHIAL’s rating at [ICRA]AA+, revised the outlook from Stable to Positive, and assigned a rating to INR 2,150 crore of NCDs. Total rated instruments were stated at INR 4,905 crore. In ICRA’s view, key factors include Hyderabad airport’s strong business base, passenger growth, non-aeronautical revenue, improving financial metrics, and the revenue outlook under CP4. At the same time, tariff regulation, refinancing, debt levels, and air-demand shocks remain constraining factors.

On 7 January 2026, CRISIL also reaffirmed the Crisil AA+ rating on the INR 250 crore bank facility, revised the outlook to Positive, and assigned Crisil AA+/Positive to INR 2,150 crore of NCDs. CRISIL evaluates positively the ring-fencing of GHIAL from the GMR group, the involvement of AAI and the Telangana state government, and the escrow account and payment waterfall. CRISIL also treats the CP4 tariff outlook, passenger growth, non-aeronautical revenue, and refinancing of the February 2026 bond maturity as important issues.

On 7 May 2024, S&P upgraded GHIAL to BB with a Stable outlook. S&P’s rating assessed the company’s operating recovery, cash-flow improvement, expected deleveraging, and tariff regime, while still placing the credit at BB in global relative comparison for foreign-currency bond investors. The important point is that domestic AA+ should not be mechanically translated into an international AA or A rating. Domestic ratings indicate relative credit quality within India, while S&P’s BB rating indicates foreign-currency bond credit on a global scale.

For Fitch, secondary information indicates BB+ / Positive, but the latest primary Fitch release text was not confirmed in this work. This report therefore does not use Fitch as a central basis for confirmed ratings, and leaves it as an unverified item. Rating-agency views are supplementary inputs to credit analysis, and the rating level itself should not replace one’s own conclusion.

The rating direction in domestic ratings indicates potential improvement. By contrast, the global rating on the foreign-currency bonds remains Stable at S&P. This is not a contradiction. Domestic ratings can more easily evaluate the airport franchise within the country, the regulatory regime, domestic capital-market access, and the relative credit quality of rupee debt. Global ratings more strongly reflect India’s institutional risk, regulatory disputes, foreign-currency bonds, sovereign and country risk, and comparison with private infrastructure credits in the BB rating category.

8. Credit Positioning

GHIAL is among the higher-quality private airport credits in India. Hyderabad’s growing metropolitan area, the long-term concession, growth in passenger and non-aeronautical revenue, domestic AA+ ratings, and access to the domestic NCD market increase predictability relative to a typical private operating company.

At the same time, GHIAL’s risk is higher than that of a fully regulated utility or a government-guaranteed quasi-sovereign. Air traffic demand is affected by the economy, airfares, fuel prices, airline capacity, and infectious diseases, while AERA tariffs provide a recovery mechanism but also involve regulatory lag. There are government-related shareholders, but not an explicit guarantee. GHIAL is “a private infrastructure bond with a strong airport franchise,” not “a government-guaranteed airport bond.”

Within Indian infrastructure, compared with port and logistics companies such as Adani Ports and JSW Infrastructure, GHIAL is constrained by concentration in a single airport, while the airport’s regional monopoly characteristics and regulated tariff regime give it a different demand quality. For port companies, cargo and customer diversification and commodity sensitivity are important, while for GHIAL the main issues are the combination of passengers, airlines, the tariff regime, and non-aeronautical consumption. Airports are vulnerable to passenger shocks, but in recovery phases non-aeronautical revenue can grow strongly.

GMR Airports Limited’s consolidated portfolio includes Delhi, Hyderabad, Goa, Nagpur, and overseas airports, but for GHIAL bondholders, the directly relevant factors are GHIAL’s own cash flow, collateral, dividends, and fund movements involving subsidiaries.

Relative-value judgement can only be made on a limited basis in this report. Live bond prices, yields, spreads, amount outstanding, and comparison with Delhi Airport bonds or other Indian infrastructure bonds of similar maturities have not been confirmed. Based on public information, GHIAL is positioned as a domestic AA+ and S&P BB airport infrastructure issuer with a strong business base, but investors should reflect foreign-currency bond risk, the tariff regime, high debt, and unconfirmed terms. For investment in individual bonds, price and spread need to be checked separately, but the credit positioning in this report remains conservative until CP4, remaining foreign-currency bonds, and the post-refinancing capital structure are confirmed.

9. Key Credit Strengths and Constraints

The first credit strength is Hyderabad airport’s regionally monopolistic franchise. Passenger traffic of 15.38 million in H1 FY26, Hyderabad airport passenger traffic of 23.2 million in 9MFY26, and FY2025 passenger traffic of 29.5 million indicate that the demand base has moved beyond the post-Covid recovery stage and returned to a growth phase.

The second strength is the depth of non-aeronautical revenue. H1 FY26 non-aeronautical revenue was INR 9,200.9 million, close to aeronautical revenue of INR 9,547.8 million. The 26% year-on-year increase in non-aeronautical revenue in 9MFY26 indicates revenue growth beyond simple passenger-count growth.

The third strength is access to the domestic capital market. The assignment of AA+/Positive by ICRA and CRISIL in January 2026 and the rating of INR 2,150 crore of NCDs indicate that the company can raise long-term funds in the domestic market. The January 2026 INR 21 billion NCDs are described in company materials as having been used to refinance US dollar debt, representing a move to reduce short-term foreign-currency debt and currency mismatch. However, the full redemption and zero remaining balance of the February 2026 bonds are unconfirmed in this report.

The fourth strength is the long-term concession and regulatory framework. The 60-year concession supports the debt repayment period and the recovery period for airport assets. The AERA tariff regime carries uncertainty, but compared with an unregulated merchant business, there is an institutional framework for investment recovery and user tariffs. Regulation is a risk of lower tariffs, but also a source of potential recovery based on the framework.

The first constraint is the high debt burden. Total borrowings of INR 9,258.61 crore as of September 2025 were large, and current borrowings were also INR 2,674.24 crore. Operating cash flow is strong, but taking debt levels, interest payments, refinancing, dividends, and investment together, the company’s financial flexibility cannot be described as very thick. Even after the NCD refinancing, maturity management of the 2027 US dollar bonds and domestic NCDs continues.

The second constraint is uncertainty in the tariff regime. The final CP4 tariffs, TDSAT and Supreme Court-related disputes, unrecovered amounts from prior periods, and the treatment of non-aeronautical revenue will have significant effects on future cash flow. Even if airport demand is growing, an unfavourable tariff revision would limit improvement in EBITDA and debt metrics.

The third constraint is concentration in a single airport and exposure to air-demand shocks. Hyderabad airport has a strong franchise, but GHIAL’s credit quality is concentrated in this airport. If infectious disease, airline failure, higher fuel prices, reduced domestic airline capacity, international-route restrictions, or geopolitical risk occurs, passenger traffic and non-aeronautical revenue could deteriorate simultaneously.

The fourth constraint is dividends and group fund movements. S&P assumed a high dividend for the fiscal year ended March 2024, indicating the possibility that the airport company’s strong cash flow may flow to shareholders. It is necessary to confirm how far the restrictive covenants in domestic NCDs and foreign-currency bonds protect creditors, and whether growth investment or debt reduction has priority.

10. Downside Scenarios and Monitoring Triggers

The most important downside scenario is one in which the CP4 tariff decision is more unfavourable than expected and aeronautical revenue and EBITDA fail to grow despite passenger growth. AERA regulation provides a cost-recovery framework, but cash flow can change significantly depending on the regulatory asset base, operating costs, non-aeronautical revenue, historical disputes, unrecovered amounts, and the treatment of user development fees. The final CP4 order, TDSAT and Supreme Court-related developments, and true-up for prior periods are the most important monitoring items.

The second scenario is one in which refinancing does not proceed as expected and maturity risk on foreign-currency bonds or domestic NCDs re-emerges. The January 2026 NCDs appear to have advanced refinancing of the February 2026 US dollar bonds, but as of 12 May 2026 redemption completion and the remaining balance have not been fully confirmed. The US$350 million bonds due October 2027 also remain. If foreign-currency bond balances, hedges, NCD issuance terms, the domestic market rate environment, or rating outlooks deteriorate, refinancing capacity would be constrained.

The transmission channel of an unfavourable CP4 outcome also needs to be clearly understood. If aeronautical tariffs or user development fees fall, revenue per passenger would decline even if passenger numbers grow, delaying EBITDA improvement. If recovery of prior-period true-up is delayed, the timing of operating cash flow would be pushed back, weakening short-term liquidity and the explanatory basis for refinancing NCDs and foreign-currency bonds. If the treatment of non-aeronautical revenue deductions is unfavourable, growth in duty-free and food and beverage may be offset by lower regulated tariffs.

The third scenario is a passenger-demand shock. Air traffic demand is sensitive to the economy, airline capacity, fuel prices, infectious disease, and international-route restrictions. Even if an airport has regional monopoly characteristics, if aircraft do not fly and passengers decline, landing charges, user development fees, duty-free, food and beverage, advertising, and parking deteriorate simultaneously. Given high fixed costs and interest payments, a short-term demand shock could quickly depress margins.

The fourth scenario is one in which debt reduction is delayed by dividends, investment, or group fund movements. Surrounding airport development, commercial facilities, hotels, MRO, and capacity expansion broaden growth potential, but tend to require upfront investment. If operating cash flow is used heavily for dividends or new investments, conservatism for bondholders declines. Restricted-payment covenants, dividend policy, NCD covenants, and the effectiveness of escrow arrangements should be confirmed.

The fifth scenario is one in which expectations of domestic-rating improvement fade. ICRA and CRISIL’s Positive outlooks are favourable but do not guarantee upgrades. If CP4 tariffs are unfavourable, passenger growth slows, post-refinancing debt metrics do not improve, dividends remain heavy, the refinancing policy for the 2027 bonds is unclear, or the foreign-currency bond market closes, domestic-rating outlooks could stabilise or turn downward.

The specific monitoring items are as follows.

• AERA CP4 final tariff order, prior-period true-up, user development fees, and treatment of non-aeronautical revenue.
• Redemption completion, balance, and hedge unwind for the February 2026 US dollar bonds, and refinancing plan for the 2027 bonds.
• Information memorandum, collateral, covenants, repayment schedule, and restricted-payment provisions for the January 2026 NCDs.
• GHIAL’s FY2026 full-year consolidated financials, operating cash flow, investing cash flow, dividends, and borrowing balance.
• Passenger traffic, international-passenger mix, non-aeronautical revenue, duty-free spend per passenger, and cargo volume.
• Rating updates and sensitivities from ICRA, CRISIL, S&P, and Fitch.

11. Credit View and Monitoring Focus

Based on public information, the current credit quality is best organised as a two-layer assessment: high investment grade in the domestic rupee market, and a BB-category private airport infrastructure issuer in global comparison for foreign-currency bonds. The credit direction is improving in operating terms and in access to the domestic NCD market, but because CP4 tariffs, the post-maturity treatment of the February 2026 bonds, refinancing of the 2027 bonds, and dividend policy are unconfirmed, it cannot be said that the overall credit profile will move rapidly upward. The likelihood of rapid credit deterioration may have declined in the near term because of the January 2026 NCD issuance, but given the absence of a confirmed post-refinancing balance sheet, the liquidity assessment remains provisional. If adverse facts are confirmed on the tariff regime or refinancing, the view could be revised downward relatively quickly.

Credit quality is supported by Hyderabad airport’s strong regional franchise, growth in passengers, aircraft movements, and cargo, the depth of non-aeronautical revenue, access to the domestic NCD market, ICRA/CRISIL AA+/Positive ratings, and the long-term concession. H1 FY26 passenger traffic of 15.38 million, 9MFY26 passenger traffic of 23.2 million, and H1 FY26 adjusted EBITDA margin of 64% indicate strong airport earnings capacity. The January 2026 issuance of INR 21 billion of NCDs is positive as long-term domestic funding to address foreign-currency debt maturing in February 2026, but this report has not confirmed full redemption and a zero remaining balance for that foreign-currency debt.

By contrast, credit quality is constrained by the large borrowing balance, uncertainty in the tariff regime, concentration in a single airport, unconfirmed terms of the foreign-currency bonds and domestic NCDs, and dividend and group fund-movement risk. Total borrowings of INR 9,258.61 crore as of September 2025 are material relative to the airport’s operating strength, and short-term liquid assets at that time were below current borrowings. This pressure likely improved because of the NCD refinancing, but the post-issuance balance sheet as of 12 May 2026 needs to be confirmed.

For investors, GHIAL should be positioned as “an airport infrastructure credit with a strong operating base and confirmed access to long-term domestic funding, but one where foreign-currency bond investment should reflect unresolved items in the tariff regime and debt structure.” For existing holders, the refinancing response through the January 2026 NCDs is a comfort factor, but until the final treatment of the February 2026 bonds, the treatment of the 2027 bonds, and CP4 tariffs are confirmed, holding decisions should not be strengthened simply on expectations of a rating upgrade. Before investing in individual bonds, price, spread, and amount outstanding need to be separately checked.

In the next update, the first items to confirm are FY2026 full-year financials, redemption and balance of the February 2026 bonds, issuance terms of the January 2026 NCDs, and the formal content of AERA CP4. If these line up positively, the Positive outlook in domestic ratings and improvement in operating indicators can be assessed more strongly. Conversely, if CP4 tariffs are more unfavourable than expected, dividend outflows are large, the refinancing policy for the 2027 bonds is unclear, or foreign-currency bond balances remain above expectations, the credit assessment should remain conservative despite strong operations.

12. Short Summary & Conclusion

GMR Hyderabad International Airport Limited is an Indian airport infrastructure issuer that operates Hyderabad’s main international airport under a long-term concession, and its credit quality is supported by passenger growth, non-aeronautical revenue, and access to the domestic NCD market. The domestic rating is AA+/Positive from ICRA/CRISIL, but foreign-currency bond investors view it as a private airport credit rated S&P BB/Stable. Key issues to confirm are AERA CP4 tariffs, post-maturity treatment of the February 2026 US dollar bonds, refinancing of the 2027 bonds, dividends, and debt terms.

13. Sources

Confirmed Sources

• GMR Group, Hyderabad Airport | GMR Hyderabad International Airport, FY2025-26 page. https://www.gmrgroup.com/airports/hyderabad-airport/
• GMR Airports Limited, Investor Presentation Q3FY26, January 2026. https://www.gmrgroup.com/content/dam/pdf/investors/gmr-airports-ltd-investor-presentation-q3fy26.pdf
• SGX, GMR Hyderabad International Airport Limited - Operating and Financial Review H1 FY26, 30 September 2025. https://links.sgx.com/1.0.0/corporate-announcements/YT2P5ND8S0Y60ABS/868350_Operating%20and%20Financial%20Review%20H1%20-%20FY26.pdf
• SGX, GMR Hyderabad International Airport Limited - Unaudited Condensed Interim Consolidated Financials Sep 2025, 30 September 2025. https://links.sgx.com/1.0.0/corporate-announcements/YT2P5ND8S0Y60ABS/868349_GHIAL%20CFS%20Sep%202025.pdf
• ICRA, GMR Hyderabad International Airport Limited: Rating reaffirmed; outlook revised to Positive from Stable; rating assigned for non-convertible debentures, 8 January 2026. https://www.icra.in/Rating/GetRationalReportFilePdf?id=140179
• CRISIL Ratings, GMR Hyderabad International Airport Limited: Rating outlook revised to Positive; rating reaffirmed; NCDs assigned, 7 January 2026. https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/GMRHyderabadInternationalAirportLimited_January%2007_%202026_RR_385883.html
• ICRA, GMR Hyderabad International Airport Limited: Rating reaffirmed, 13 March 2025. https://www.icra.in/Rating/GetRationalReportFilePdf?Id=133609
• CRISIL Ratings, GMR Hyderabad International Airport Limited: Rating upgraded to CRISIL AA+/Stable, 9 February 2024. https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/GMRHyderabadInternationalAirportLimited_February%2009%2C%202024_RR_335921.html
• S&P Global Ratings, GMR Hyderabad International Airport Upgraded To 'BB' On Improved Performance; Outlook Stable, 7 May 2024. https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3166001
• SGX, GMR Hyderabad International Airport Limited US$350,000,000 4.25% Senior Secured Notes due 2027 Offering Memorandum, 19 October 2017. https://links.sgx.com/FileOpen/GMR%20Hyderabad%20International%20Airport%20Limited%20-%20Offering%20Memorandum%20Part%20I%20%2819.10.2017%29.ashx?App=Prospectus&FileID=33056
• Internal structured extraction: issuer_summary/issuers/gmr_hyderabad_international_airport_limited/data/gmr_hyderabad_international_airport_limited_source_facts_20260512.json

Unverified / Pending

• Final confirmation of redemption completion, balance, and hedge unwind for the 4.75% Senior Secured Notes due February 2026.
• Current balance, price, spread, and refinancing policy for the 4.25% Senior Secured Notes due October 2027.
• Information memorandum, collateral, covenants, repayment schedule, and restricted-payment provisions for the INR 21bn NCDs issued in January 2026.
• AERA CP4 final tariff order, prior-period true-up, and unresolved TDSAT and Supreme Court-related issues.
• GHIAL’s FY2026 full-year consolidated financials, dividends, investment expenditure, and borrowing balance.
• Latest primary Fitch rating release text. Secondary information indicates BB+ / Positive, but this report does not treat it as a confirmed rating.
• Foreign-currency bond prices, yields, spreads, amount outstanding, and relative value versus Delhi Airport and other Indian infrastructure bonds based on Bloomberg, Refinitiv, dealer runs, and similar sources.