India’s Adani outbids AMP, NIIF to win second bundle of airports

The infrastructure conglomerate emerged as the winner of a 50-year concession for six airports located in state capitals and densely-populated areas in the country.

Adani Group, one of India’s largest infrastructure conglomerates, has emerged as the winner of the privatisation process of six major Indian airports: Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram (Trivandrum) and Mangaluru.

The Indian firm outbid offers from AMP Capital, Italian highway operator Autostrade per l’Italia and a consortium comprising India’s National Investment and Infrastructure Fund and Zurich Airport’s operator, among others.

The highest bids submitted were for Ahmedabad and Jaipur airports, for which Adani will pay, respectively, 177 and 170 rupees ($2.43; €2.17) per passenger to the Airport Authority of India. Ahmedabad, the third busiest airport in India, served 1.05 million passengers in January, while Jaipur registered 512,000 visitors, according to data from AAI.

Adani will manage the airports, which serve state capitals or densely-populated areas, for a period of 50 years. The firm is the largest port operator in India, and also has interests in logistics, renewable energy, thermal power, and power transmission.

Adani and the AAI declined to comment or did not reply to requests for comment.

The government first announced its plans to privatise the six airports in November and aimed to award the assets before the next general election, scheduled for April or May.

Some prospective bidders complained about the short time given to prepare their bids, a source close to the negotiations told Infrastructure Investor in February.

But analysts believe the overall response to the tender was positive.

“There was a good response from the market [for these assets], and we had a good mix of developers and investors, some partnering up with international operators,” Jagannarayan Padmanabhan, director at CRISIL Infrastructure Advisory, told Infrastructure Investor.

Padmanabhan said there was a difference of around 15 to 20 percent between the highest and second-highest bids, which he described as “rational” for infrastructure projects.

He believes that the airport asset monetisation process will continue, noting that there are at least another eight to 10 facilities that could be attractive for investors, including assets in Chennai and Kolkata. Padmanabhan argued that, if the government were to release in advance a “timeline” of brownfield and greenfield projects it planned to privatise, more international operators would participate in the future.

“They will start seeing India as an attractive market [to which they’ll want to be exposed], instead of [as] a one-off opportunity,” he said.

India is set to become the third largest air passenger market in the world by 2026, according to the International Air Trade Association. The country has already privatised five airports, including Mumbai and Delhi, but a previous attempt to privatise Jaipur and Ahmedabad had failed to attract investor interest.