Adani group airport business is taking tentative first steps into the world arena after months of shadow hanging over it once the US Department of Justice dropped charges against chair, Gautam Adani and settled cases on the group earlier this year. Under the weight of problems and after the US drop the carriers it has decided to Jeet Adani, who is Managing Director of the company’s airports business and the younger son of Gautam Adani, has recently told interviewers that the group will now consider ‘very selectively’ bigger and more relevant international opportunities. The group already owns eight Indian airports and has until now concentrated almost wholly on that domestic market.
This year it also entered the fray for Sicily’s primary airport at Catania, one of Italy’s busiest, an early signal of overseas intent. That is now still in progress, but the topic has expanded. The timing is also perfect in the sense of fresh capital.
On Wednesday, a group of foreign and Indian investors including funds managed by BlackRock Temasek Alpha Wave Global, Premji Invest agreed to pump nearly a billion dollars into the company for a 5.54 percent stake. The deal values the airport business at around 18 billion dollars before the new capital comes in. Most of this money will probably be kept very much focused on India, where Adani wants to increase the annual number of passengers served by current airports from approximately 120m to 200m through five years. The company also intends to compete for eleven other airports that the Indian government is expected to put up for long-term public-private partnership leases. Meanwhile the international debate is no longer just theoretical.
With its Sicily interest, the wider Adani Group is pursuing the potential acquisition of Associated British Ports, the UK’s biggest port operator. Ports and airports are widely different operations but it is a messageif one was neededthat now that the legal issue is behind them the group is freer to entertain scale assets outside India. What differentiates this is the level of caution. Jeet Adani has maintained that an overseas airport venture must consist of a rigorous benchmark. The company is not rushing into every available concession. Rather it seems to be examining markets where it can replicate the same all-encompassing model it has created in India by integrating core aeronautical facilities with large-scale city-side property and hotel developments, retail groups and ground-handling units.
In India this approach has already generated plans for over twenty million sq ft of mixed-use development in the vicinity of several of its airports, modeled on the successful airport city-build projects in Singapore, Dubai and Amsterdam. The homeland still scores. With India’s aviation market still booming, and Adani already capturing a large fraction of passenger and cargo movements, expanding capacity, upgrading terminals and increasing non-aeronautical income will probably swallow the bulk of the new investments and management bandwidth.
But the openness to even an occasional foray abroad represents a change of approach. A firm that in eight years more than doubled its scale to become the dominant private-sector player on the Indian scene may see the future consisting of three or four strategically selected foreign airports.
