Adani Airport Attracts Interest from Investors in the US and Middle East
Adani Airport Holdings Ltd (AAHL) is exploring the possibility of raising around $1 billion in equity from international investors as it looks to expand its operations and pursue potential acquisitions. This marks the first time the airport division, valued at an estimated $20 billion, will seek external equity funding. Currently, AAHL operates seven airports across India and is set to launch its eighth in Navi Mumbai by August. The company aims to capitalize on the growing air passenger traffic in the country, which is projected to increase significantly in the coming years.
Expansion Plans and Market Position
AAHL stands as India’s largest private airport operator, managing key airports in cities such as Mumbai, Ahmedabad, and Jaipur. The company is on track to complete its eighth airport in Navi Mumbai, which is expected to begin operations in August. With an estimated valuation of $20 billion, AAHL surpasses the market capitalization of GMR Airports, which is valued at $10.4 billion and operates airports in major locations including New Delhi and Hyderabad. The growth in air travel is evident, with India’s domestic air passenger traffic witnessing a 10.35% annual increase in FY25, transporting 14.54 million passengers.
To further enhance its infrastructure, AAHL plans to triple its capacity over the next 15 years, focusing on strategic locations such as Mumbai-Navi Mumbai. The company is well-positioned to take advantage of the anticipated growth in air passenger traffic, which is expected to rise at a compound annual growth rate (CAGR) of 9% between FY25 and FY27, reaching a volume of 485 million passengers.
Interest from International Investors
Sagar Adani, executive director of Adani Green Energy and nephew of group chairman Gautam Adani, stated that there is significant interest from international investors, particularly from the US, Middle East, and Australia, in partnering with AAHL. This interest comes as the company prepares to seek external equity funding for the first time. While the company currently has sufficient funding, it remains open to securing additional capital depending on market conditions and timing.
CFO Jugeshinder Singh mentioned that the company is still evaluating whether to proceed with the fundraising now or wait a few years until the value of the business is more established. The decision will depend on various factors, including the timing of their expansion plans and the overall market environment.
Future Acquisitions and Strategic Goals
In addition to raising funds, AAHL is also considering potential acquisitions both domestically and internationally. Singh indicated that any international deals would focus on airports that cater to the Indian diaspora, particularly those with significant passenger traffic from India. The company aims to establish its airport business as an independent subsidiary within the next two to three years, paving the way for a future public listing.
AAHL’s recent performance shows a 7% increase in passenger traffic, handling 94 million passengers in FY25 compared to the previous year. This growth underscores the company’s commitment to expanding its operations and enhancing its infrastructure to meet the rising demand for air travel in India. As the aviation sector continues to recover and grow, AAHL is strategically positioning itself to capitalize on emerging opportunities in the market.
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