The Adani Group’s Mumbai International Airport Ltd (MIAL) has pledged a 51 per cent stake in the highly anticipated Navi Mumbai International Airport (NMIAL) to the State Bank of India (SBI).
This strategic move is part of a significant financial arrangement, with SBI extending a loan facility of INR 12,770 crore to support the greenfield airport’s development. MIAL, which currently holds a 74 per cent stake in NMIAL, is spearheading the airport’s construction, with operations slated to commence in the final quarter of the financial year 2024-25 (FY25). This timeline marks a slight delay of three months from the original schedule, underscoring the complexity and scale of the project.
The financial framework for NMIAL was solidified in March 2022 when the Adani Group announced the financial closure of the project, buoyed by SBI’s commitment to underwriting the entire debt requirement. This development follows a previous financing arrangement of INR 8,645 crore with Yes Bank, which was intended to fund Phase I of the airport’s design and construction. However, this arrangement was abruptly terminated by Yes Bank, necessitating the revised financing deal with SBI.
NMIAL, upon full completion, is expected to transform the region’s aviation landscape, with a projected capacity to handle 90 million passengers and 2.6 million tonnes of cargo annually by FY32. The first phase alone will introduce a capacity of 20 million passengers. The airport will feature four passenger terminals and two parallel runways, setting a new benchmark for aviation infrastructure in India. For context, the existing Mumbai International Airport, also under MIAL’s management, currently handles 55 million passengers annually.
Adani Airport Holdings Ltd (AAHL), the entity managing MIAL and controlling 23 per cent of India’s air traffic, has recently sought shareholder approval to increase its borrowing limit from INR 20,000 crore to INR 30,000 crore. This decision, taken through a special resolution at the company’s annual general meeting, highlights AAHL’s aggressive expansion strategy and its efforts to manage its growing financial commitments. The financial health of AAHL’s portfolio remains a concern. MIAL reported a loss of INR 608 crore for FY24, while Ahmedabad airport, another key asset, recorded a loss of INR 327 crore. Other airports under AAHL’s management, including those in Jaipur, Guwahati, Thiruvananthapuram, Mangaluru, and Lucknow, also posted losses during the same period.
