The conglomerate also plans to shift one major airline to Navi Mumbai International Airport from Mumbai airport. Currently, IndiGo, Vistara and Air India are among the major carriers from Mumbai airport.
“Releasing gridlock by shifting one major airline to Navi Mumbai International Airport which we expect will add efficiency and economy of scale to such airline with priority allocation of slots at Navi Mumbai International Airport; and enhanced capacity is expected to help airlines to create their hub and spoke model where international traffic is supplemented by demand of extended catchment area," the conglomerate said in their latest red herring prospectus of follow-on public offering of new shares.
In February 2019, the Gautam Adani-led group won bids for six AAI airports, including Lucknow, Mangaluru, Ahmedabad, Jaipur, Guwahati and Thiruvananthapuram. The group pays the Airports Authority of India (AAI), a state-owned enterprise a per-passenger charge. The group is responsible for operating, managing, and developing airports across 50 years.
The Adani Group acquired a 74% stake in Mumbai’s international airport in July 2021 by picking up GVK Group’s 50.5% stake and a 23.5% stake from ACSA Global Ltd and Bid Services Division (Mauritius) Ltd (Bidvest). As a result, the group also get to build and operate the Navi Mumbai airport.
The Adani Group has planned to invest ₹8000 crore in its airports business over the next five years by utilising nearly 40% of the gross proceeds from its ₹20,000-crore follow-on public offering of new shares, which is being touted as the country's biggest FPO.
The conglomerate has proposed to invest ₹2,268.00 crore in Ahmedabad airport, ₹304.00 crore in Mangaluru airport, and ₹2,722.00 crore in Lucknow airport. The company will invest the respective amounts either directly or indirectly, by way of subscription to its equity shares, preference shares, nonconvertible debentures and, or by way of sub-ordinate debt.
The investments in the airports will be used to carry out improvement works of the terminal, airside, cargo, expansion of fuel storage and distribution system, among other areas.
The company will also use the funds for payment in part or full for principal outstanding loan of ₹ 2,448.17 crore for Adani airports holdings. The accrued interest for the loan as on 31 December, 2022 stood at ₹235.25 crore. The loan is a related party loan through an inter corporate deposit from Adani Properties Private Ltd and the last repayment date is currently at 31 March, 2028.
The group has plans to increase international flights to long haul western and the Association of Southeast Asian Nations destinations, aims to attract airlines to make the airports as their hubs by offering a series of incentives, such as night maintenance and airplane parking bays, and wants to develop air cargo associated infrastructure such as cargo villages, perishable pack houses and logistics parks.
“We expect to generate revenue from the commercial development of property surrounding airports of approximately 650 acres. With this sizable retail space and land bank, and increasing consumer purchasing power in India, we believe there is a significant opportunity to increase non-aeronautical operations revenue per passenger," the group further said.
The Adani Group also plans to develop the land in a phased manner to cover hotels, retail establishments and office space such that our airports act as a “The Destination Magnet" for customers, along with convenience offered through a super-app.
The seven operational airports run by Adani Group account for 23.7% passenger traffic in India as per December data from Airports Authority of India. In terms of freight carriage, Adani-run airports share stood at 30.7% in December.
