In Less Than Two Years, Adani Controls Nearly A Quarter Of India’s Airport Capacity
Billionaire Gautam S. Adani, chairman of Adani Group, center, attends a luncheon hosted by Japanese business groups at the headquarters of the business lobby Keidanren in Tokyo, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)

In Less Than Two Years, Adani Controls Nearly A Quarter Of India’s Airport Capacity

Billionaire Gautam Adani has added more wealth than anyone else during the pandemic. But investor interest has been growing in the last few years as the ports-to-power plants conglomerate aggressively added assets. Now valued at more than $79 billion, the group also controls seven airports and nearly a quarter of India’s air traffic handling capacity.

In August 2019, Adani Enterprises Ltd. set up Adani Airport Holding Ltd., a wholly owned subsidiary, for acquiring, developing, and maintaining airport infrastructure assets. Less than two years later:

  • Adani Airport holds the entire shareholding in the six newly awarded projects—Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram.
  • It also owns 74% in Mumbai International Airport Pvt. or MIAL—India’s second-largest airport by passenger traffic that saw 45.90 million fliers land or take off in 2019-20 prior to the pandemic.
  • Adani will indirectly control the Navi Mumbai airport (under-construction), 74% owned by MIAL.
  • While Adani won bids for Jaipur, Guwahati, and Thiruvananthapuram, it is yet to sign concession agreements. The concession period is 50 years, commencing from the date of commercial operations.

Airport Capacity

The company, according to a filing by Adani Enterprises, projects its airports to handle about 25% of the India’s air traffic and 300 million consumers, including non-fliers. It’s close to the first target.

Ahmedabad, Lucknow and Mangaluru saw traffic grow more than 16% from 2015 to 2020, beating the industry average of 15%, a Crisil report said. Mumbai is the second largest by passenger traffic in India.

The four have a combined capacity of more than 60 million passengers a year. That’s just shy of a quarter of India’s domestic air traffic of 274 million in 2019-20.

Adani is also expanding the three airports. India Ratings estimates that after the ongoing capex, Ahmedabad, Lucknow and Mangaluru will see their combined capacity increase from 14.5 million to about 53 million.

Up For Grabs

Adani has an opportunity to further increase its presence in the airport sector soon. The government plans to sell residual stake in Delhi, Mumbai, Bengaluru and Hyderabad airports as part of the ambitious Rs 2.5-lakh-crore asset monetisation pipeline to raise additional resources, PTI reported. It also plans to sell Airport Authority of India’s remaining stake in the four airports and privatise 13 more airports in 2021-22 fiscal.

Adani may bid for upcoming six airports— Amritsar, Varanasi, Indore, Raipur, Bhubaneshwar, and Trichy—through the public-private participation.

A man walks inside the newly build terminal 2 of Chhatrapati Shivaji International Airport in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  
A man walks inside the newly build terminal 2 of Chhatrapati Shivaji International Airport in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Also read: Adani to Partner With Sri Lanka’s Biggest Firm for Port Terminal

Revenue Model

Airports earn revenue from aeronautical and non-aero services. The aero segment comprising passenger fees, landing and parking charges and fuelling charges is more certain and stable, Crisil said. It is regulated by the Airports Economic Regulatory Authority, allowing for a stable return on aero assets.

Non-aero services comprise retail and other such non-core activities aimed at boosting airport revenue.

An emailed query to Adani Group on expansion of airport infrastructure remained unanswered.

According to the company disclosure, Adani is following a three-pronged strategy.

It plans to create a logistics network, offering services to large clients or enterprises through its airports and ports (APSEZ Ltd.). The group is looking to integrate logistics services by setting up air freight stations connected with road services, giving customers a single-window cargo shipment via air, sea, rail and road.

The group is building a hub-and-spoke network of gateway and feeder airports, connecting large cities with smaller ones. Mumbai and Ahmedabad would be gateway airports, feeding airports like Lucknow, Guwahati, Thiruvananthapuram, Jaipur, and Mangaluru.

Adani also plans to strengthen non-aero revenue by building infrastructure at airports. The group has rights to commercially develop about 150 acres of land around the three airports for which it already has concessions, Crisil said in its report.

The airport operator will offer retail, entertainment, and food and beverages services for passengers, it said in an exchange filing. In addition, it will use the land available for setting up hotels, restaurants, bars, hospital, and commercial real estate—offices and co-working spaces and, malls and brand showrooms.

Given location advantage, dedicated catchment area and unpenetrated commercial opportunities, the airports are expected to benefit from ramp-up in non-aero revenues, said Crisil. The total non-aero revenue for the three airports for which it has received concessions is expected to increase from around Rs 160 crore in 2018-19 to more than Rs 300 crore by 2022-23, it added.

Capex And Spending

Adani Airport has proposed an investment outlay of more than Rs 15,000 crore in next two to three years, according to Crisil’s October 2020 report.

India Ratings said in a December report that for Ahmedabad, Lucknow and Mangaluru airports, the overall cost of the expansion is likely to be around Rs 8,000 crore, including Rs 782 crore payable for existing regulatory asset base and Rs 2,036 crore of the estimated capital work in progress, to be funded in a debt-equity ratio of 70:30. The construction is scheduled to complete in three-and-a-half years.

Adani Enterprises will infuse Rs 2,400 crore directly or indirectly, and Adani Airports is also tying up external debt.


No repayments will be due in the ongoing fiscal 2020-21 and 2021-22 given the moratorium under proposed debt restructuring, Crisil said. MIAL applied to lenders for debt restructuring ahead of payments due in Sept. 30, 2020. The Mumbai airport operator has outstanding borrowing of more than Rs 9,700 crore.

Any capital requirement for Mumbai or Navi Mumbai is either to be funded from the distributable surpluses of Adani Airport or by parent Adani Enterprises, said India Ratings.

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