Adani engineers biggest fund raise for airports
India’s Adani Group is doubling down on its airport business, expanding it to international markets, as well as increasing its capacity in India. Earlier this year, Adani Airport Holdings made a bid to operate Sicily’s main airport. Jeet Adani, the group’s director of airports and son of founder Gautam Adani, told the FT the company would now also “very selectively” seek other opportunities “of size and relevance” in international markets. The conglomerate is also exploring making a bid for Associated British Ports, Britain’s largest port operator, in what would be its first investment in the UK.
These moves come after the decision by the US Justice Department in May to drop charges against Gautam Adani and his nephew, Sagar. The charges related to an alleged bribery scheme over a solar power project in India, and were later dismissed by a US court. The same month, the Securities and Exchange Commission settled a fraud case against the two. Both have consistently denied any wrongdoing.
On Wednesday, the conglomerate also announced that it was raising $1bn from a consortium of investors — including Temasek, BlackRock, Alpha Wave Global and Premji Invest — for its airports subsidiary. The transaction values Adani Airport at $18bn, and will end up giving the investors a 5.54 per cent stake, once all three tranches of the investment are in. The first leg of the investment will be completed by June 2027. This is one of India’s largest primary equity investments by financial institutions in India’s airports sector.
This money is earmarked for the group’s domestic business, and to fund its plans to expand and modernise airport infrastructure, develop integrated airport-city ecosystems and scale its passenger-facing and non-aeronautical businesses, including ground handling. Adani now runs eight airports in India. It also plans to bid for the 11 airports the Indian government plans to offer under a 50-year public-private partnership lease model. In 2019, the company made winning bids for all six airports that the government put on the block under a similar structure.
Media reports at the end of last year indicated that the conglomerate was looking at an overall investment of $15bn over the next five years in its airport business. Its stated goal is to increase passenger capacity to 200mn a year.
This week’s fund raise at the $18bn valuation also matters as a benchmark, since it positions the company well above its listed rival, GMR Airports, which was trading at roughly $11bn on a market-cap basis as of Tuesday this week. That gap gives Adani leverage as it prepares the ground for an eventual initial public offering of the airports unit, which the group is targeting for fiscal year 2028.