Adia reportedly in talks to buy stake in Hyderabad International Airport

Sovereign wealth fund said to be in talks to buy 49 per cent stake of airport

The Abu Dhabi Investment Authority (Adia), one of the world's biggest sovereign wealth funds, is in advanced talks with GMR Infrastructure to buy up to 49 per cent of Hyderabad International Airport, The Economic Times (ET), a business daily in India reported citing unnamed sources.

The Bengaluru, India-based infrastructure developer is reportedly seeking to sell non-core assets to reduce the level of its debt, ET reported. The sale would value Hyderabad airport at Rs 5,000 crore (Dh2.85bn).

Paris Aeroport is also in talks with GMR, the sources said. But Adia is reported to be in a more advanced stage of negotiations with GMR, the sources told the newspaper.

Shares of GMR Infrastructure increased 0.28 per cent to 18.05 rupees on Monday.

An Adia spokesman declined to comment when reached by The National, saying that the sovereign wealth fund doesn't comment on market rumours or speculation.

If Adia were however to buy a stake in the airport, it would fall in line with the bullish statements it has recently made on emerging markets.

The sovereign wealth fund said in its annual report that it expects much of the world's economic growth to come from developing nations in the next decade.

"Economic growth in the decade ahead will be dominated by the emerging world," Sheikh Hamed bin Zayed,  Adia's managing director, said in the fund's annual review, published earlier this month.

"We expect that over two-thirds of the growth in global GDP over the coming ten years will come from those emerging economies; with roughly half coming from China and India alone."

Hyderabad is one of India's biggest cities with a population of over 7 million and has a reputation as a hub for information technology that competes with Bangalore.

Hyderabad International Airport, the sixth busiest airport in India by passenger traffic, is owned by GMR Hyderabad International Airport Limited, a joint venture.

GMR, according to its web site, has a 63 per cent stake in the company while the government of India has a 13 per cent stake. The government of Telangana also has a 13 per cent stake and Malaysia Airports Holdings Berhad owns an 11 per cent stake.