Adani Airports Holdings (AAHL), the country’s second-largest airport operator, has evinced interest in hiking its stake in the Mumbai International Airport (MIAL) from the current 74%. The balance 26% is held by the Airports Authority of India (AAI).
The Adani Group had acquired the majority stake in the airport, from the GVK Group, in August 2020.
The Chhatrapati Shivaji Maharaj International Airport (CSMIA), controlled by MIAL, is the country’s second-largest airport (in terms of passengers served), behind Delhi’s Indira Gandhi International Airport.
“AAHL is keen on bidding for all airports (the government intends to privatise) and will look to acquire a minority stake of the government in the Mumbai airport,” a statement in the segmental analysis of the airports business, in the annual report of Adani Enterprises, stated. A mail sent to AAHL remained unanswered till the time of going to the print.
Adani Group’s intent of acquiring the minority stake of AAI in MIAL can only take effect if the government carries forward an earlier proposal mooted by it to sell AAI’s residual stake in all the public-private partnership airports like Delhi, Mumbai, Bengaluru and Hyderabad as part of its national monetisation pipeline.
Sources said that in 2021, the government had mooted a plan to sell its residual stake in the four airports, but later put it on hold. The proposal will require the approval of the Union Cabinet.
Besides MIAL, AAI also has a 26% stake in Delhi International Airport. However, its stake in Hyderabad and Bengaluru airport entities is lesser at 13% each because it holds the stake in partnership with the respective state governments in them. AAI also holds an indirect stake in the upcoming Navi Mumbai International Airport which is being constructed by Adani Airport Holdings.
Though AAHL has seven operational airports under its fold, CSMIA generates 60% of its total passenger traffic, as per the Q4FY23 data. The airport handled 44 million passengers in FY23, which was lower than the 63 million handled by Delhi’s IGIA.
During FY22, MIAL recorded a loss of Rs 154 crore against an income of Rs 415 crore, hit severely by the Covid-19 pandemic. Its financial condition significantly improved in FY23 with the reduction in loss to Rs 1.04 crore on a turnover of Rs 3,300 crore. MIAL is required to share 38.7% of its actual revenues with AAI as per the original agreement.
AAHL is currently serving around 23% of India’s passenger base and has set a target to dominate the airport space with a consumer base of more than 300 million as against the current 74.8 million.