Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

Delhi International Airport Limited / Credit

We initiate our coverage on <a href="https://www.smartkarma.com/entities/27055" target="_blank" data-smartkarma-citation="entities:27055:1">Delhi International Airport Limited (0180331D IN)</a> (DIA) with a NEUTRAL recommendation on the DIALIN complex on the complex’s lack of upside potential against its Indian peers. However, we simply cannot recommend selling on this name either as we believe the complex’s carry, the scarcity value of owning an airport bond, DIA’s strategic importance to the Indian and Delhi’s economies, and DIA’s long-term recurring cashflow potential offer some stability in the coupon payment ability.Our NEUTRAL recommendation takes into account robust airport traffic, capacity expansion plans, and a rising  debt-to-EBITDA multiple over the next 12 months driven by (1) the reduction in airport charges (See airport charge reduction section) and (2) rising debt associated with the capacity expansion plan, partially offset by robust traffic and a long-term positive outlook for the Indian aviation sector (See strong traffic growth section).DIA continues to be the leading airport in India both in terms of passenger traffic and freight volumes. We expect DIA to maintain its leading position among Indian airports with passenger traffic to cross 70m in 2018, which is credit positive for DIA.  Key credit drivers for DIA include the following:<ul><li>Robust passenger traffic with a favorable long-term outlook for the Indian aviation sector.</li><li>Strong liquidity position with cash and cash equivalents of INR25.9bn as of last December - 22% of total assets.</li><li>No short-term debt with next debt repayment due only in 2022.</li></ul>

We initiate our coverage on Delhi International Airport Limited (0180331D IN) (DIA) with a NEUTRAL recommendation on the DIALIN complex on the complex’s lack of upside potential against its Indian peers. However, we simply cannot recommend selling on this name either as we believe the complex’s carry, the scarcity value of owning an airport bond, DIA’s strategic importance to the Indian and Delhi’s economies, and DIA’s long-term recurring cashflow potential offer some stability in the coupon payment ability.Our NEUTRAL recommendation takes into account robust airport traffic, capacity expansion plans, and a rising  debt-to-EBITDA multiple over the next 12 months driven by (1) the reduction in airport charges (See airport charge reduction section) and (2) rising debt associated with the capacity expansion plan, partially offset by robust traffic and a long-term positive outlook for the Indian aviation sector (See strong traffic growth section).DIA continues to be the leading airport in India both in terms of passenger traffic and freight volumes. We expect DIA to maintain its leading position among Indian airports with passenger traffic to cross 70m in 2018, which is credit positive for DIA.  Key credit drivers for DIA include the following:Robust passenger traffic with a favorable long-term outlook for the Indian aviation sector.Strong liquidity position with cash and cash equivalents of INR25.9bn as of last December - 22% of total assets.No short-term debt with next debt repayment due only in 2022.

Delhi International Airport: At a Steady Altitude

India

Delhi International Airport Limited owns and operates an airport. The Company offers baggage handling, cargo, flight information, airport facilities, transportation, and shopping services. Delhi International Airport serves customers in India.

Delhi International Airport Limited (0180331D IN)

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Delhi International Airport: At a Steady Altitude

We initiate our coverage on Delhi International Airport Limited (0180331D IN) (DIA) with a NEUTRAL recommendation on the DIALIN complex on the...

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