Wednesday, September 04, 2019

Battle For Mumbai Airport

New Delhi: GVK and Adani are both big names in infrastructure. Both symbolise entrepreneurship spawned by the post-1991 economic liberalisation. Yet, both are distinctly different. One broke the mould as developer of the Mumbai International Airport, and turned it into one of the best in the world but is cash-strapped now and has been forced to restrain any expansion. The other is also deep in debt and although new to the airport business, is driven by an unmistakable ambition to make it big in the business. Other than a big-bang entry early this year into this space by winning bids to operate six airports, the Adani Group also seems keen to have a say in the running of the Mumbai International Airport (MIAL) in which GVK has a 50.5 per cent stake.
The Adani Group has been in the news for its private offer to South Africa's Bidvest Group, which holds a 13.5 per cent stake and a board seat in MIAL, and is seeking to buy Bidvest's stake at Rs 77 per share for around Rs 1,200 crore. But GVK is fighting tooth and nail - after all, the airport business revenue of around Rs 3,700 crore, largely from this airport, accounts for nearly 90 per cent revenue of its listed entity, GVK Power & Infrastructure. The group has moved court for exercising its right of first refusal for the Bidvest stake and is arranging funds to back its offer.
Adani's move comes on the back of it emerging as the successful bidder early this year for upgrading and operating six airports - Ahmedabad, Lucknow, Jaipur, Guwahati, Mangalore and Thiruvananthapuram. Sources say the group is keen to become the largest player in the country. Mumbai is an important pit stop in this journey.
The Adani Group's spokesperson refused to comment on the offer to Bidvest and the group's plans for the Mumbai airport.
What is the attraction of the Mumbai airport? First is the volumes - 48.5 million passengers in 2017/18. This is more than the total passengers at all the six airports that Adani bid for last year. India's current total capacity is 317 million. CAPA estimates that India will require a $36-45 billion investment in around 55 airports by 2030 to create an additional 500-600 million capacity. It is this growth that Adani is betting on.
04/09/19 E Kumar Sharma/Business Today

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