Mumbai: The consortium of Larsen & Toubro, Siemens and Zurich Airport, which has promoted Bangalore International Airport Company, has short-listed IL&FS, SBI Caps, ICICI Securities and IDFC for the merchant banking activities of the airport project.

Says a senior L&T executive: “These four merchant banking firms have made presentations to us recently. We will appoint one of these firms by the end of this month as our merchant banker for the project.”

Once appointed, the merchant banker would advise the consortium to finalise the debt equity ratio of the Rs 1,200-crore project and would mobilise the debt rupee component for the project.

The L&T-led consortium has a 74-per cent stake in the project. The Karnataka government will hold 13 per cent, while the remaining stakes will be held by the Airports Authority of India. Out of the total 74-per cent promoters’ equity, Zurich Airport holds a 40-per cent stake, while L&T and Siemens hold 17 per cent each.

The L&T official says the central government has foregone foreign travel tax (FTT) and inland air travel tax in favour of the promoters of the airport project with the rider that the Karnataka government provide land and rationalise the 23-per cent sales tax it levies on air turbine fuel.

However, a sales tax of 4 per cent has been suggested to reduce the state’s burden of supporting the project substantially, the official adds. As per the finance ministry’s proposal, the FTT component of Rs 25 crore will accrue annually to the new airport (at Rs 500 a piece from the projected half-a-million outbound passengers each year).

The L&T official says the company is in talks with IDBI and ICICI Bank and various other banks to mobilise the required equity component of the project. “The institutions were very positive about the project. We hope mobilising equity may not be a problem.”

The foreign promoters of the project, Siemens and Zurich Airport, are expected to mobilise the dollar component of the project.