Adani Group Invests $1 Billion in Navi Mumbai Airport to Accelerate Operations
Written by Sanjay Kumar
The Adani Group is ramping up its investments in the Navi Mumbai International Airport with a substantial infusion of approximately $1 billion. The move is aimed at expediting the airport’s operational readiness, with plans to kickstart operations by December of the following year, according to sources familiar with the situation.
Of the total investment of ₹8,625 crore in the Navi Mumbai airport so far (equivalent to approximately $991 million), the Adani Group has contributed ₹1,710 crore through equity infusion. Additionally, they secured ₹2,900 crore in term loans from a consortium of banks, while an additional ₹3,655 crore in equity came from the City and Industrial Development Corporation of Maharashtra Ltd (Cidco), a city planning agency in Maharashtra. As the project progresses, both Adani and Cidco are committed to further investments, with an additional ₹1,511 crore earmarked.
“The due diligence by the banks has been recently completed, which was followed by the investment,” noted one of the insiders.
At the Adani Group’s annual general meeting on July 19, Chairman Gautam Adani announced ambitious plans for the Navi Mumbai airport, aiming for operational readiness by December 2024. The first of the four international passenger terminals is set to be operational by that time, and it is expected to handle a significant influx of travelers and cargo, catering to at least 20 million passengers and 300,000 tonnes of cargo annually. This development is poised to alleviate congestion at the bustling Mumbai International Airport, which is projected to see 51 million passengers pass through its gates this fiscal year.
The recent round of funding is sufficient to complete the initial two phases of the Navi Mumbai airport project, out of a planned total of five phases. The project’s overall budget stands at $2.5 billion (₹20,853 crore), with at least ₹12,770 crore expected to be raised in the form of term loans from a consortium of lenders. The financial closure for these loans was finalized last year, and subsequent due diligence was conducted in recent months following the Hindenburg report.
The consortium of lenders includes prominent institutions such as the 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. Notably, some of these loans have a lengthy tenure of up to 26 years.
Efforts to seek comments or responses from spokespeople for the lenders and Cidco have been unsuccessful, and the Adani Group declined to provide a comment.
Originally conceptualized in 1999, there were concerns that the Navi Mumbai airport project, which Adani assumed control of in 2017, would experience further delays following the Hindenburg Research report. The report prompted the Adani Group to shift priorities by repaying debt and freeing up share pledges valued at approximately $4 billion.
The fallout from the report led to a market downturn for Adani Group firms, prompting a series of public interest litigations before the Supreme Court. Subsequently, the Supreme Court directed the Securities and Exchange Board of India (SEBI) to investigate allegations of foul play and possible round-tripping of funds within Adani Group companies. The SEBI probe is still ongoing, but Adani Group stocks have rebounded significantly, thanks in part to investments exceeding $4 billion from GQG Partners and other Foreign Portfolio Investors (FPIs).
The Navi Mumbai airport project, designed to accommodate 90 million passengers and handle 2.5 million tonnes of cargo annually, is anticipated to be completed by 2032. Positioned approximately 35 km from Mumbai Airport and sprawling across 1,160 hectares of land, the new airport will feature four passenger terminals, a dedicated general aviation terminal, a cargo terminal, two runways, and, in the first two phases, a minimum of 42 aircraft parking areas, with the potential for 245 aircraft stands in the remaining three phases.
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