Bangalore International Airport Ltd (BIAL), India’s third-busiest airport operator, plans to raise over Rs 46.3 billion through a second tranche of bonds by early October. The bonds, rated AAA by Crisis Ratings, India Ratings, and ICRA, will be privately placed and have a 15-year maturity. Proceeds will be used to refinance existing debt and fund new capital expenditure. BIAL plans to invest Rs 155 billion between FY26 and FY30 to expand its airport capacity.
Bangalore International Airport Limited (BIAL), the operator of Kempe Gowda International Airport, has announced plans to raise ₹46 billion through bonds to finance its ongoing and future expansion projects. This strategic move aligns with BIAL’s long-term vision to enhance passenger capacity, boost cargo infrastructure, and position the Bengaluru airport as a leading global aviation hub. The capital will support infrastructure enhancements aimed at accommodating growing air traffic and improving airport experience.
Purpose of Bond Issuance
The bond issuance is aimed at funding Phase 2 of the airport’s expansion, which includes significant upgrades like the completion of Terminal 2 (T2), expanded cargo handling capacity, and supporting airside infrastructure. T2, also known as the “Garden Terminal,” was partially opened and is being built in phases. The fresh capital will help complete the remaining sections, incorporate sustainability-focused features, and scale up passenger services. (Airports)
Market Response and Bond Structure
The bond offering is expected to attract institutional investors due to BIAL’s strong credit rating and its strategic importance in India’s aviation network. The bonds will be structured to offer competitive yields, and their long-term nature will align with the lifecycle of airport infrastructure investments. The financing will be governed by the regulatory frameworks set by SEBI and the Reserve Bank of India.
Growth in Passenger and Cargo Traffic
Kempe Gowda International Airport has seen a steady rise in both domestic and international traffic post-COVID, driven by the tech economy and Bengaluru’s expanding global footprint. BIAL is also focusing on developing its cargo business, with facilities like the upcoming integrated cargo terminal, and strategic partnerships to handle perishable and pharmaceutical goods. These efforts support its vision of transforming.
Bangalore International Airport Limited (BIAL), the operator of (Kempe Gowda International Airport), is set to raise ₹46 billion through bonds to support its ambitious expansion program. With Bengaluru witnessing exponential growth in air traffic, BIAL aims to bolster its infrastructure, enhance passenger handling capacity, and future-proof its operations through this fundraising initiative.
Sustainability and Smart Airport Goals
A part of the bond capital will be utilized for sustainable initiatives, such as renewable energy integration, water conservation systems, and smart technologies. BIAL has already taken significant steps towards becoming a carbon-neutral airport, and the funds will help accelerate its green transition. Terminal 2’s biophilic design and solar-powered operations reflect.
Impact on Regional Economy and Connectivity
This fundraising effort will not only boost infrastructure but also positively influence the regional economy by creating jobs, improving cargo exports, and enhancing international connectivity. Bengaluru’s airport is critical to South India’s economic narrative, and with the planned investments, it will further integrate with global aviation corridors, benefiting industries such as IT, biotech, and manufacturing.
BIAL’s ₹46 billion bond plan signals a proactive approach toward capacity building and future-ready infrastructure. With enhanced terminals, upgraded logistics zones, and sustainable development at its core, the airport is poised to strengthen its role as a major gateway to South India. This move also reflects the increasing trend of infrastructure companies turning to bond markets for stable and scalable financing solutions.
Q1. Why is BIAL raising ₹46 billion through bonds?
BIAL is raising funds to support the ongoing expansion of Kempe Gowda International Airport, including Terminal 2 completion and cargo infrastructure upgrades.
Q2. What will the bond proceeds be used for?
The proceeds will fund terminal development, airside enhancements, sustainability initiatives, and capacity expansion.
Q3. Who will invest in these bonds?
Institutional investors such as mutual funds, pension funds, and insurance companies are the primary targets for this bond issuance.
Q4. How does this expansion benefit passengers?
It will increase passenger handling capacity, reduce congestion, and enhance the overall airport experience with modern, sustainable infrastructure.
Q5. When is the expansion expected to be completed?
Key phases of the expansion, including Terminal 2, are expected to be completed in stages over the next 2–3 years.
