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Adani Group to Acquire a 74% Stake in Mumbai Airport: How Did the Adani vs GVK Battle Unfold?

Aug 27, 2020 10:29 AM 3 min read

How far are you willing to fight for something you love? 

As the Adanis would say - till you get it! 

Adani = 1 GVK = 0

Shares of Adani Group companies rallied up to 9% today on report that the group is set to acquire a 74% stake in Mumbai International Airport (MIAL) for c. ₹15,000cr ($2bn). 

As part of the deal, the Adanis would pick up GVK Group’s 50.5% stake in MIAL plus 23.5% owned by minority partners i.e. Bidvest Group (13.5%) and Airports Company South Africa (ACSA) (10%).



The acquisition would also give the Adanis ownership of the upcoming Navi Mumbai airport, in which MIAL holds 74%.

With six airports already in its portfolio, this will make the Adani Group the largest private airport operator after GMR Group, and definitely ahead of GVK.

And that’s despite GVK having something called a “right of first refusal” on Bidvest and ACSA’s stakes. 

But wait...we’re getting ahead of ourselves!

Let’s see how this saga unravelled.


From Mumbai International Airport Stake Sales to Courts to Tribunals to ED

Since early 2019, GVK has been caught up in legal wranglers and arbitration with minority shareholders Bidvest Group and ACSA, as the firms sought to exit from MIAL by selling their stake to...wait for it...the Adani Group. 

But, consider this chain of events and try to form your own conclusions:

March 2019: Adani offered to buy out Bidvest’s 13.5% stake for ₹1,248cr ($166m).

GVK Blocks: GVK claimed its right of first refusal i.e. Said if Bidvest wanted to sell their stake, they’d have to offer them to GVK first. 

GVK offered to buy Bidvest’s stake for the same price. 

Adani moved Bombay HC against GVK’s offer; court asked GVK to close the deal by November 2019. 

But GVK Group companies are laden in debt with significant dues of their own upcoming.

October 2019: To close some of its liabilities, GVK entered in a deal to sell its 79% stake in GVK Airport Holdings (the entity owning GVK’s stake in MIAL) to a clutch of investors - Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board, and the government-backed National Investment and Infrastructure Fund (NIIF) - for ₹7,614cr ($1bn).

Bidvest Blocks: The deal gets blocked by none other than the same Bidvest who is surely annoyed at GVK holding its exit hostage in the first place.

Bidvest argues that entry of new investors in GVK Airport Holdings means they get an indirect stake in MIAL by extension, and hence can substantially erode the valuation of Bidvest’s stake in MIAL.

January 2020: An arbitration tribunal restrains Adani from going ahead with buying out Bidvest’s 13.5% stake.

Tribunal asks Bidvest to maintain status quo on its stake; directs GVK to compensate Bidvest for the delay by paying interest on the agreed share purchase agreement till the pendency of the case.

ACSA takes the legal route at its own end. But GVK seems to manage an upper hand i.e. Till about July 2020.What happened in July?: The Enforcement Directorate (ED) raids homes of the promoters and offices of GVK Group in Mumbai and Hyderabad, in connection with a money laundering case registered by the CBI against Venkata Krishna Reddy Gunupati, Chairman of the GVK Group, his son G.V. Sanjay Reddy, Managing Director of Mumbai International Airport Ltd (MIAL), and nine other private companies, for alleged financial irregularities to the tune of ₹705cr ($94m) from the funds of MIAL.

Now with the investigations ongoing, investors tell GVK that it would be impossible for them to put money. 

And the Adanis walk into the sunshine. 



But What makes Mumbai airport so attractive for Adani group?

Mumbai Airport is one of the busiest single runway airports around the world, handling over one thousand flights per day. In India, it has long held the position of the second busiest airport, only after IGI Airport in Delhi (only recently ceding the slot to Kempegowda International Airport (KIA), Bengaluru.   

Mumbai airport’s passenger traffic was around 49.8m in 2018 -  more than the total passengers at all the six airports that Adani bid for last year.

Another major attraction of the Mumbai airport is its 60-year concession period and regulated tariff structure. 

And let’s not forget the huge land bank of c. 194 acres around the airport held by MIAL, making it  highly lucrative.

Having made it big in the world of power and ports, Adani is now venturing into defence, data centres, and airports. And if it is willing to put up a fight as it did for Mumbai, the future seems bright. For now. 


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