Adani Enterprises: scouting partner for MIAL
Shares of Adani Enterprises rallied more than 3% Monday, as its arm, Adani Airport Holdings, is in advanced talks with Qatar Investment Authority to sell a minority stake in Mumbai International Airport that it acquired last month.
Also, on Friday, Adani Enterprises raised Rs 125 crore through allotment of non-convertible debentures (NCDs) on a private placement basis.
Adani Airport is looking to raise $750 million from the stake sale. The Qatar fund prefers to invest directly in the Mumbai airport operator, but alternatively, it may buy a stake in parent Adani Airport.
The sovereign wealth fund of Qatar is already an investor in Adani Mumbai Electricity, a division of Adani Transmission that distributes power to 3 million customers in Mumbai. The sovereign fund invested Rs 3,220 crore (approximately $452 million) in the utility for a 25.1% stake in February 2020, including equity of Rs 1,210 crore and subordinated debt of Rs 2,010 crore.
Last month, the Adani group said it would take control of India’s second-busiest airport of Mumbai, in its biggest move yet to become a top airports operator. Adani Airport agreed to buy the debt of GVK Airport Developers, against which a 50.5% stake in MIAL was pledged. The Adani group will also buy the combined 23.5% stake held by Airport Company of South Africa (Acsa) and South Africa’s Bidvest Group in MIAL, for which it has obtained the approval of the Competition Commission of India. This would give the group a 74% stake in Mumbai airport. The remaining 26% stake remains with state-run Airports Authority of India.
The deal also gives Adani Airport a controlling stake in the Navi Mumbai International Airport being developed by GVK Group. Also, with one of India’s two most profitable international airports in its kitty and having won the development and operation rights over a 50-year lease for the Ahmedabad, Lucknow, Mangaluru, Jaipur, Thiruvananthapuram, and Guwahati airports, Adani will be the biggest private sector airport operator in India.
The Adani group had begun talks with South Africa’s Bidvest to buy out its minority stake in MIAL in 2019. A deal was, however, stonewalled by GVK, according to people aware of the matter, as the group viewed the move as an attempted hostile takeover.
Subsequently, GVK agreed with several investors—Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board, and state-backed National Investment and Infrastructure Fund—to sell a 79.1% stake in GVK Airport Holdings for ₹7,600 crore. However, the deal fell through last month, and GVK agreed to hand over control of MIAL to the Adani group.