Adani group has won bids for 5 airports, as a result of which their shares rallied 3% on the NSE after the acquisition. They had to compete with the GVK group, who are the existing stakeholders of the Mumbai International Airport Limited (MIAL). The GVK Group were also looking forward to expand their existing stake in MIAL along with the Adani Group. The Adani Group has won bids for Jaipur, Lucknow, Mangalore, Ahmedabad and Thiruvananthapuram airports. They were the highest price bidders for all the 6 airports.
These 6 airports were controlled and operated by Airport Authority Of India (AAI) till date. Now, the current task on hand of building and upgrading the air-side terminals, city-side and land-side infrastructure is with the Adani Group. The tenure of this control handed over to the Adani Group is 50 years. The criteria for the selection of winning bid was the monthly per-passenger fee which is to be offered to the AAI. Moreover, the highest offeror is set to win the bid. The AAI has switched the criteria as it had the revenue sharing model for the Bengaluru, Mumbai and Delhi airports. The AAI received all the airport bids at a single stage bidding process.
Competitors
Besides the GVK Group, the Adani Group had to face challenges from a bunch of other competitors. AAI received 32 bids from 10 various groups to operate the airports. These groups included the PNC Infratech Group, Australia’s AMP Capital, Fairfax India Holdings Corporation, National Investment And Infrastructure Fund(NIIF), GMR Group, Kerala State Industrial Development Corporation LTD(KSIDC). The Adani Group had the highest per passenger fee of Rs 168 for the Thiruvananthapuram airport. The remaining groups were nowhere nearby the Adani Group’s offer.
The government had approved the proposal for the management of 6 airports. This airports were then under the control of AAI under the public-private partnership(PPP) basis in November, 2018. Lucknow and Guwahati received six bids each whereas Ahmedabad and Jaipur received seven bids each. AAI believes that the move to manage the six airports on a PPP basis will improve the infrastructure facilities and services to the shareholders.
Further, for the first time in a long while, the government has chosen a private player over a government entity. The entire operation of the privatization process will be handled by the Public Private Partnership Appraisal Committee. This committee also involves the CEO of NITI Aayog and secretaries from finance and aviation ministries.
Bids in numbers
Adani Group’s bid on Thiruvananthapuram was Rs 168 with the closest competitor being Kerala State Industrial Development Corporation(KSIDC) with Rs 135. Mangalore Airport had a bid for Rs 115 from the Adani Group. The Ahmedabad Airport received Rs 177 bid where the competitor was National Investment And Infrastructure Fund(NIIF) with a bid of Rs 146. The Jaipur Airport received Rs 174 bid against the National Investment’s bid of Rs 155. Lastly, the Lucknow Airport received bid of Rs 171.
As on 25th February, 2019, Adani Enterprises was trading at Rs 132 on NSE which was a 3.08% rise on that particular day itself.
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