Adani Group likely to bid through MIAL in next round of privatisation

The group is reshuffling top management of Mumbai Airport after acquiring 74 per cent stake last year

Adani Group is likely to make Mumbai International Airport Ltd (MIAL) its primary vehicle to acquire airports in the upcoming round of privatisation, people aware of the development said.

The Airports Authority of India (AAI) is set to invite bids for six to 12 airports early next financial year from private enterprises for the next round of airport privatisation.

The conglomerate has started the process of shifting headquarters of its airport business to Mumbai from Ahmedabad, where it is currently situated, and is in the process of reshuffling the top management at the airport.

Sources aware of the development said the group had appointed Prakash Tulsiani, former chief executive officer (CEO) of logistics company Allcargo Logistics CEO of MIAL. He will replace Rajeev Jain.

Adani Group had earlier this year entered into an agreement with GVK Group and two South African companies- Bidvest and Airport Company of South Africa to acquire 74 per cent in MIAL.

“Jain will be moved to the board. While there will be more changes, Adani Group is mindful of the fact that it can use the human resources of MIAL to build up its airport vertical. MIAL executives are likely to be elevated to key positions at group level to oversee the airport business,” a person aware of the development said.

People tracking the sector said the acquisition of MIAL had come at a “great price” for Adani.

Adani Group paid Rs 1,685 crore to the minority partners for a 26 per cent stake while it has valued GVK Airport Developer’s 50.5 per cent stake at zero value. Instead, it takes over the debt of GVK of around Rs 2,507. 95 crore, which, on full conversion, will be 95 per cent of the paid-up capital of the company.

“Groupe ADP acquired 49 per cent in GMR Airports for Rs 9,720 crore, compared to that Adanis got a marquee asset like MIAL at an unbelievable price,” the person said.

“The government may put a weight on airport experience to be eligible to bid. Hence, the group is contemplating making MIAL the primary vehicle for bidding,” the person said.

Officials in the know said Adani Group intended to participate in bidding for airports through MIAL because there was criticism of the government allowing companies without experience to bid for airport projects.

Adani Group’s airport business involves developing aerotropolis, malls, hotels, and airport villages to tap non-aero sources and it now has the extensive rights to develop more than 194 acres of MIAL’s land bank.

Besides MIAL, Adani Group has six airports -- Lucknow, Ahmedabad, Jaipur, Guwahati, Thiruvananthpuram, and Mangaluru -- in its kitty. It had won them in the previous round of airport privatisation.

The company has lined up a capital expenditure of about Rs 50,000 crore over the next five years, with around Rs 35,780 crore of it for the airports business. The company intends to spend Rs 14,249 crore on Mumbai and Navi Mumbai airports and about Rs 15,000 crore on the other six.