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I appreciate the keen interest of many Non Resident Keralites to subscribe the shares of Kannur International Airport Ltd.
The following are my humble view on investment in KIAL:
1. If you are a rich person with so much surplus money, I strongly recommend you to invest maximum possible for this infrastructure development project coming up in the state of Kerala.
2. If you are not in that financial category, please consider the following points before your investment.
3. The KIAL is day to day managed by Mr Thulaseedas, who was managing Air India and made our national carrier current shape the CIAL was managing Mr Kurien who was an IAS officer with proven track record.
4. The majority of the present directors are politicians, this precedence will continue who ever will be ruling Kerala, so they may not have sufficient time lo look after the project leaving their political priorities, so we can not expect an efficient management from them.
5. Company had Rs 500 crore loan and same amount of equity. With in 10 years the loan and compounded interest will be approximately Rs1000 crores.
6. After building the airport, starting the operations, making profit, the company will start to pay back loan and the accumulated interests. After clearing total loan and the interest the company will start giving dividend to the investors.I can not predict how many years will take to pay the maiden dividend to the investors. CIAL had given its first dividend after 9 years because it was a relocation of 25 years old Kochi airport to Nedumbassery.
7. The shares will not be listed in the stock exchanges, so if you want to sell your shares you have to find a buyer, he will decide the price.
The information is for the public interest, please preserve this message to verify after ten years.
Kindly see the instruction form the KIAL MD's office on expression of interest to invest in KIAL.
The following is the message received from the MD's office of KIAL
"We thank you for your expression of interest in subscribing to the equity share capital of the company. The details of the issue are given below:
Issue Price Rs.100 per share (at par value)
Lock in Period:
5 years from the date of allotmen
t
Minimum Request Size:
2001 Equity shares of Rs.100 each
Amount to be remitted on:
1) Submission of Request
25% of face value, payable by Demand Draft (DD) drawn in favour of Kannur
International Airport Limited, payable at Thiruvananthapuram. This will be refunded, without interest, only on non allotment or partial allotment for
any reason
Balance 75% of face value
Closing date for receipt of request along with request money
31 January 2011
You are advised to send your request on plain paper, giving full name,address including email and phone, date of birth and profession, to the company address given below stating the number of shares you wish to subscribe. DD towards the request money should be enclosed with the request letter:
Kannur International Airport Ltd
“Parvathy” ,TC 36/1
Chacka, NH By Pass
Thiruvananthapuram - 695024
Kerala, India.
Phone :91- 471- 2508668 ,69
OR
Kannur International Airport Ltd
Kinfra Office Building
Opposite Mattannur Bus stand,
Ambalam Road,
Mattannur, Kannur – 670702
Kerala, India.
Phone : +91 - 490 - 2474464
In case of payment by DD by debit to NRO/NRE/FCNR (B)/RFC Accounts, the DD has to be accompanied by a letter issued by the respective bank stating that the DD has been issued by debiting the NRO/NRE/FCNR/(B)/RFC Account.
Copy of PAN card or Form 60 as per rule 114 B of Income Tax Rules will be
required to be submitted along with the request.
Yours faithfully,
Managing Director
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My friend views..
Hello all my friends,
Due to the recent developments in politics (the statements by tourism secretary and counter by cm) many of us came to know about the shares of KIAL. As most of us are from kannur and uses the airport frequently naturally will have an affection to be a share holder of the same. For travel thru an airport you wont get any benifits as a share holder ( do get discounts while buying a soap just because you own its shares?).
People are running behind the shares after the news. While it is heard that even if you apply you wont get allotted, as it is with a racket .
But before investing let me tell you some facts,
The outlook of the scenario is in comparison with CIAL. CIAL at this stage has gone thru 17 years since the stone laying. Today the profit of CIAL is 75 crores with almost 60-65 flight movements per day. Out of this 40 % international and 60 % domestic.
Those who invested in 1994-5 got the first dividend of 8% in 2006 only. 10-12 years their investments were dead. And from 2007 the company is giving 10-12 % dividends every year. In 1994, CIAL was requesting all NRIs to invest and for KIAL investors are demanding for shares. Is there over enthusiasm among all ?
Retail investors in CIAL was only around 12000 which created the demand. Here that is not the case. Only if public share holding is less for KIAL and you own the share then its worth.
From 1994-1999, this project was like others only, but in the first year of operation people realised the potential of this airport and the share prices zoomed up to say rs. 300 in 2006 ( FV-rs. 10/-). Not just because of the performance, there were other news based movements also ( one major news among those were Reliance going to acquire stake in CIAL!!). During the 2008 market crash people sold the shares for buying bluchip stocks (like Larsen, reliance, infosys etc) and the value came to rs. 90/- and now it’s steady around 150-160 rupees.
The initial capital was 200 crores and it was doubled in 2006 thru rights issue. The total project cost was below 350 crores only which is considered as the best advantage for CIAL. Bangalore airport cost is 2000 crores (for comparison)
Now the question is whether KIAL will be able to perform as CIAL?
Let us divide it into two factors- Fundamental and Operational.
Fundamental-
The project cost estimated for KIAL is 1000 crs. In which 500 crs thru equity and 500 thru loans. As per the present interest rates annual burden on the loan will be 50 crs (interest only). The advantage of CIAL- CIAL has become debt free within 2-3 years of operations just because the loan burden was less. For KIAL with a profit of 75 crs from day 1 of operations, how many years will it take to repay the loans, up to you.
User fee of rs.500 was collected by CIAL from, 2002 to 2004 and later withdrawn.
BIAL is collecting service charge from passengers (for the balance sheet to be presentable)
The execution of the project was very cost effective and had a strong vision for realization of the project. The man behind was Mr. V J Kurian IAS, who never bothers about any political or other kind of influences. Will KIAL also keep the spirit , will the executors have the same quality?
It took six years to complete the project due to all other issues which are also expected during the execution of KIAL. How tactful to resolve the issue also defines the project period.
Operational-
As I mentioned earlier, for the growth of CIAL major part is (flight movements) contributed by domestic operators. Kochi being the commercial centre, is able to attract domestic traffic which can not be expected at Kannur.
To conclude my suggestion is if you wanna be a part of the hometown airport, set the mind that your invested money will be dead for 25 years ( infra investments will take its time to grow as you know). Don’t think that today you invest 2 lakhs and after 10 years it will become 15-20 lakhs. For them it is better to look for 10-20 cents land (residential purpose) 10-15 kms away from the main gate and price around 20-50 k per cent. Don’t be in a hurry, because brokers will kill you.
When the airport becomes operational new employees will come, you can book your profits at that time. Now also here at this high rate (20 lakhs/cent was the last transaction I heard) there are buyers.
These findings are based on the available information and whether to act upon this is upto you only and I don’t have any responsibility.
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