Adani Group Pledges 51% Stake in Navi Mumbai Airport for Rs 12,770 Crore Loan Amid Financial Challenges

Mumbai, August 16 - The Adani Group, through its controlled entity Mumbai International Airport Ltd (MIAL), has pledged a 51% stake in the upcoming Navi Mumbai International Airport (NMIAL) to the State Bank of India (SBI). This pledge is part of a substantial loan facility amounting to Rs 12,770 crore, sanctioned by SBI to finance the greenfield airport project. The loan marks one of the largest financial commitments in India's airport sector and underscores the significant investment required to bring the Navi Mumbai airport project to fruition.

Financial Closure and Project Development

The financial closure for the NMIAL project was declared by the Adani Group in March 2022, following SBI's agreement to underwrite the entire debt requirement of Rs 12,770 crore. This move came after a previous financing arrangement with Yes Bank, which was initially set at Rs 8,645 crore but was unilaterally cancelled by the bank. The new financing plan with SBI ensures the continued development of the Navi Mumbai airport, which is now slated to commence operations in the last quarter of FY25, slightly delayed by three months from its originally planned opening.

MIAL, which holds a 74% stake in NMIAL, is overseeing the development of the airport, which is expected to be a significant addition to India's aviation infrastructure. Upon completion, the Navi Mumbai airport is projected to handle up to 90 million passengers and 2.6 million tonnes of cargo annually by FY32. The first phase of the project will introduce a capacity of 20 million passengers, with plans for four passenger terminals and two parallel runways at full capacity.

Adani Airport Holdings' Financial Position and Expansion Plans

Adani Airport Holdings Ltd (AAHL), which manages MIAL and controls 23% of India’s air traffic, recently sought shareholder approval to raise its borrowing limit from Rs 20,000 crore to Rs 30,000 crore. This decision, made during the company's annual general meeting, reflects AAHL's ambitions to support further expansion and manage its financial obligations.

Despite the expansion plans, AAHL and its associated airports have faced financial challenges. MIAL reported a significant loss of Rs 608 crore for FY24, with Ahmedabad airport posting a loss of Rs 327 crore. Other airports in the AAHL portfolio, including those in Jaipur, Guwahati, Thiruvananthapuram, Mangaluru, and Lucknow, also reported losses for the same financial year. However, AAHL's standalone operations showed a net profit of Rs 473 crore, marking a 360% year-on-year growth.

The Road Ahead for Navi Mumbai Airport

The Navi Mumbai International Airport, once operational, is expected to alleviate the growing traffic at Mumbai's existing Chhatrapati Shivaji Maharaj International Airport, which currently handles 55 million passengers annually. The new airport is poised to become a crucial hub in India's aviation network, offering expanded capacity and modern facilities to meet the rising demand for air travel in the region.

With the financial backing from SBI and the ongoing development efforts, the Adani Group aims to establish the Navi Mumbai airport as a key player in the global aviation market, contributing to the growth and modernization of India's infrastructure. The successful completion and operation of NMIAL will be a testament to the group's ability to navigate financial challenges and execute large-scale projects in the competitive aviation sector.