Adani gives Navi Mumbai airport a $1 bn push

Originally envisaged in 1999, it was feared that the Navi Mumbai airport, which Adani took over in 2017, would experience further delay after the Hindenburg report.  (HT_PRINT)
Originally envisaged in 1999, it was feared that the Navi Mumbai airport, which Adani took over in 2017, would experience further delay after the Hindenburg report. (HT_PRINT)

Summary

  • Of the 8,625 crore (approximately $991 million) invested in the Navi Mumbai airport so far, Adani has made an equity infusion of 1,710 crore

MUMBAI : The Adani Group has invested close to $1 billion in Navi Mumbai International Airport Ltd, in a bid to start operations by December next year, two people with direct knowledge of the development said.

Of the 8,625 crore (approximately $991 million) invested in the Navi Mumbai airport so far, Adani has made an equity infusion of 1,710 crore. It has also raised 2,900 crore in term loans from a consortium of banks, while an additional 3,655 crore equity came from the City and Industrial Development Corporation of Maharashtra Ltd (Cidco), a city planning agency in Maharashtra, these people said. Adani and Cidco will invest an additional 1,511 crore as the project moves ahead.

“The due diligence by the banks has been recently completed, which was followed by the investment," said one of the two people.

On 19 July, while addressing an annual general meeting of shareholders, group chairman Gautam Adani said the Navi Mumbai airport will achieve operational readiness by December 2024.

“The plan is to start the first of the four international passenger terminals before December 2024," said the person cited earlier. This terminal is expected to handle at least 20 million passengers and 300,000 tonnes of cargo every year. It will ease the load at the country’s busiest airport, the Mumbai international airport, which will see 51 million passengers traverse through it this fiscal.

The current round of funding is enough to build the first two of the planned five phases of the Navi Mumbai airport, this person added. The project needs a total investment of $2.5 billion ( 20,853 crore), the person said. Of this, at least 12,770 crore is expected to be raised as term loans from a consortium of lenders, for which the required financial closure was completed last year and additional due diligence has been conducted over the past few months following the Hindenburg report, the person said.

According to the two people, the lenders in the consortium include State Bank of India, EXIM Bank of India, IDBI Bank, India Infrastructure Finance Co. Ltd, Union Bank of India, Punjab National Bank, Central Bank of India and Bank of Maharashtra. Some loans have a tenure of up to 26 years, the first person said.

Emails sent to the spokespeople for eight lenders and Cidco did not elicit any response. An Adani Group spokesperson declined to comment.

Originally envisaged in 1999, it was feared that the Navi Mumbai airport, which Adani took over in 2017, would experience further delay after Hindenburg Research forced the group to shift priorities by prepaying debt and freeing up share pledges worth about $4 billion first.

Following the report, Adani Group firms suffered a market rout, leading to a handful of public interest litigations before the Supreme Court. The apex court, in turn, directed the Securities and Exchange Board of India (Sebi) to investigate the possibilities of foul play and alleged round-tripping of funds at the Adani Group firms. The Sebi probe is still underway, but the Adani Group stocks have staged a sharp recovery on the back of investments of more than $4 billion from GQG Partners and other FPIs.

The Navi Mumbai airport project, with a capacity to serve 90 million passengers and handle 2.5 million tonnes of cargo annually, is expected to be finished in 2032. Located roughly 35 km from Mumbai Airport and spread across 1,160 hectares of land, the new airport will have four passenger terminals, one dedicated general aviation terminal, one cargo terminal, two runways and at least 42 aircraft parking areas in the first two phases and 245 aircraft stands at the end of the remaining three phases.

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