MIAL raises Rs 7,200 cr via NCDs and foreign loans, refinances debt

The capital raise happened last month and around Rs 6,500 crore of loans owned to domestic lenders were repaid

Gautam Adani-owned Mumbai International Airport (MIAL) has raised around Rs 7,200 crore via non-convertible debentures (NCDs) and loans from foreign lenders to refinance its debt.

The capital-raise happened last month and around Rs 6,500 crore of loans owed to domestic lenders were repaid. CRISIL has withdrawn the rating for MIAL’s debt on receipt of a no-due certificate from banks, it said earlier this week.

Last month, the Adanis completed the acquisition of MIAL from GVK Group. In the same month, the airport company’s board approved proposals to issue and allot redeemable NCDs worth around Rs 4,000 crore to banks and financial institutions, including Barclays Bank, Deutsche Bank, JP Morgan, and Standard Chartered Bank. The rest was raised through loan, said a source in the know.

The debentures carry a coupon rate of 10.75-12 per cent, have a tenor of 12-25 months, and are secured by pledge of Adani Group’s 74-per cent stake in MIAL and charge over various assets.

While JP Morgan Securities invested Rs 1,500 crore, Barclays Bank, Standard Chartered, and Deutsche Bank invested Rs 1,127 crore, Rs 900 crore, and Rs 500 crore, respectively, in debentures.

Along with payment of overdue loans, Adani Group has also infused around Rs 700 crore in MIAL for capital expenditure and finance purposes.

“The group’s investment plans for airports foresees a recovery in the sector to pre-Covid-19 levels by 2023-24. The group is also working on a long-term finance plan for Mumbai airport and expects to be put in place by November,” added the source.

Adani Group did not respond to an email query. Deutsche Bank and JP Morgan declined to comment.

In January, CRISIL had downgraded the airport’s credit rating to ‘D’ or default due to delays in servicing debt obligations. The disruption of air travel last March due to the outbreak of Covid-19 exacerbated its woes. Delays in real estate monetisation and weakening cash flow due to the pandemic hurt its liquidity and the airport operator sought restructuring of loans.

According to the provisional figures, MIAL made a loss of Rs 506 crore on a revenue of Rs 1,773 crore in 2020-21. In 2019-20, it had posted a loss of Rs 316 crore on a revenue of Rs 3,523 crore.

A sector expert said, “While domestic air traffic is recovering, airports are not generating enough from non-aeronautical sources. In such circumstances and given the payment defaults by MIAL, domestic lenders would have found it difficult to extend fresh capital.”

The Adanis already have six airports in their portfolio. With the addition of the Mumbai airport, the group will control 25 per cent of passenger footfall and 33 per cent of India's air cargo and make the group India's largest airport infrastructure company.

“Our larger objective is to reinvent airports as ecosystems that drive local economic development and act as the nuclei around which we can catalyse aviation-linked businesses. These include metropolitan developments that span entertainment facilities, e-commerce, logistics capabilities, aviation-dependent industries, Smart City developments, and other innovative business concepts,” said Gautam Adani, chairman of Adani Group, last month at the time of takeover.