Adani Group achieves financial closure, with SBI underwriting Rs. 12,770 crores
The Adani Group stated on Tuesday that the greenfield airport project in Navi Mumbai has reached a financial close, with SBI covering the total financing demand of Rs. 12,770 crore. In July of last year, the group purchased the Mumbai international airport and the Navi Mumbai airport development from the GVK Group. The business started in a statement that Navi Mumbai International Airport Private Ltd (NMIAL), a subsidiary of Adani Enterprises Ltd (AEL), has completed financial close on the greenfield international airport project in Navi Mumbai by signing financing agreements with the State Bank of India (SBI).
According to the SBI, the whole loan needed for the NMIA project is $12,770 crore. With this loan from the SBI, NMIAL Director Jeet Adani stated they are one step closer to providing Mumbai with another milestone service. The airport would be built in stages, with a total capacity of six crore people per year. The first phase, which is expected to be completed in just over 2.5 years, would have a capacity of 2 crore passengers and 8 lakh tonnes of cargo per year.
Last July, billionaire Gautam Adani’s conglomerate obtained Mumbai International Airport Ltd (MIAL) from the GKV group, which had won the contract to develop Mumbai’s second airport. Adani Airport Holdings Ltd (AAHL), an Adani Enterprises Ltd fully owned subsidiary, owns 73 per cent of MIAL and 74 per cent of NMIAL. The Adani Group’s aim, according to NMIAL director Jeet Adani, is to construct and supply best-in-class airport infrastructure and ancillary services to the customer.
In a hub-and-spoke approach, they want to connect India’s largest cities with other nearby cities and towns. Given the critical role that airports will play in the future, they want to create an economic ecosystem that revolves around airports and airport customers. The SBI has taken a step nearer to providing Mumbai with yet another major utility with this provision.
Before Covid hit, the previous CSMIA, which had two cross runways, was handling moreover its peak capacity of 4.8 crore people per year. With four runways and three terminals (one of which, T2, will be destroyed in the coming years to make way for a larger one), India’s busiest hub, Delhi’s IGI Airport, can accommodate up to 14 crore people annually by the end of this decade. Due to capacity limits, Mumbai’s airport, which was formerly India’s biggest, now competes with Bengaluru, which is undergoing growth to stay the second busiest.
The Adani Group’s commitment to energize the required resources and accomplish the NMIA project, which was taken over having regard to the Group’s acquisition of MIAL through Adani Airport Holdings Ltd (AAHL) in July 2021, is reflected in the achievement of financial closure (for NMIA), according to a statement. MIAL owns 74 per cent of NMIAL, while the Industrial Development Corporation of Maharashtra Ltd (CIDCO, which is also the project’s concessioning authority) owns the other 26 per cent. The airport is being developed using the DBFOT (design, build, finance, operate, and transfer) method.
The Adani Group
The Adani Group would be India’s largest private airport operator in terms of the number of airports handled, with seven operational airports: Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram, as well as the NMIA. It controls 33 per cent of India’s aviation freight flow and accounts for 25% of airport footfall. However, because it operates India’s busiest airport, Delhi’s IGIA, GMR will continue to be the largest participant in terms of passengers handled for some time. This company’s aviation portfolio includes, among other things, Hyderabad and the forthcoming Mopa airport in Goa.
In 2019, the Adani Group entered the airport industry, in keeping with its aim of being a globally respected leader in integrated infrastructure and transportation companies. Through a worldwide competitive tender process undertaken by the Airports Authority of India, Adani Airports, a new business incubated within the group’s flagship company Adani Enterprises Ltd., was awarded the contract to modernise and operate six airports in Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram (AAI).
Adani Airports was then awarded the Letter of Award (LoA) for all six airports, including Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram. The business signed the Concession Agreement (CA) for the three airports, namely Sardar Vallabhbhai Patel International Airport in Ahmedabad, Chaudhary Charan Singh International Airport in Lucknow, and Mangaluru International Airport in Mangaluru, on February 14, 2020. (Mangaluru). For the next 50 years, Adani Airports will administer, manage, and develop all six airports.
On October 31, 2020, Adani Airports opened Mangaluru International Airport in Mangaluru, Chaudhary Charan Singh International Airport in Lucknow on November 2, 2020, and Sardar Vallabhbhai Patel International Airport in Ahmedabad on November 7, 2020. Mumbai International Airport Limited has been taken over by Adani Airports (MIAL). This follows permissions from the Government of India, the Maharashtra City and Industrial Development Corporation (CIDCO), and the Maharashtra Government.
In terms of passenger and cargo volume, MIAL is India’s second busiest airport. AAHL is India‘s largest airport infrastructure business, with eight airports in its administration and development portfolio, accounting for 25% of airport footfalls. AAHL currently has a 33 per cent share of India’s air cargo traffic, thanks to the acquisition of MIAL.
The inclusion of the Mumbai International Airport to the Adani Group’s existing portfolio, followed by the operational definition of the greenfield Navi Mumbai International Airport Limited (NMIAL), provides a truly revolutionary aviation foundation with several strategic adjacencies for the Group’s other B2B businesses and allows the Group to interconnect its B2B and B2C business models. With India anticipated being the world’s third-largest aviation market by 2024, the inclusion of the Mumbai International Airport to the Adani Group’s existing portfolio in the year 2024, the new international airport is projected to be completely operational.