Adani airport business to raise US$1bil through stake sale

Indian conglomerate Adani Group has announced plans to raise approximately US$1 billion by selling a minority stake in its airport unit, Adani Airport Holdings. The investment will be made by a consortium of investors, including Singapore's Temasek and US firm BlackRock. The deal will see investors acquire a 5.54% stake in Adani Airport Holdings, which currently operates as one of India's largest private airport operators. This transaction will give the company a pre-money equity valuation of around US$18 billion.

The funds raised from the sale of shares will be utilized to expand and modernize airport infrastructure, as well as to scale other businesses within the company, such as ground-handling services. Arun Bansal, the CEO of Adani Airport, stated that the company aims to build capabilities within Adani Airport Holdings to position it as the world's largest airports platform.

This expansion is driven by India's growing economy, rising consumer spending power, and the momentum of the company's urban development projects across the country.

The fundraising effort comes at a time when India's aviation sector is under scrutiny due to regulatory and safety challenges faced by major carriers Air India and IndiGo. Experts anticipate that Indian airlines will carry over 425 million additional passengers by 2044, more than doubling the number from the previous year. However, there are concerns that this rapid growth may strain the system's capacity to accommodate the surge in air travel.

The investment in Adani Airport Holdings comes a month after Adani Group's founder, Gautam Adani, resolved US bribery allegations, indicating that his conglomerate is regaining the trust of global investors after years of regulatory uncertainty.