The Gautam Adani-led Adani Group has convinced the country’s largest lender, the State Bank of India, to underwrite its entire debt worth Rs 12,770 crores, thereby achieving the financial closure of the greenfield airport at Navi Mumbai.
SBI has selected underwriters for an institutional share sale to raise at least $1 billion.
Bank of America Corporation, CLSA Ltd. and HSBC Holdings Plc were the chosen picks by SBI to achieve this assignment .
Kotak Mahindra Bank Ltd. and SBI Capital Markets Ltd. were also selected to work on the deal.
The Adani Group took over the Mumbai International Airport and the Navi Mumbai Airport from GVK Group in July 2021, making it the largest airport infrastructure company, accounting for 25 per cent of all passenger traffic and 33 per cent of air cargo.
The company mentioned in a statement, “Navi Mumbai International Airport Private Ltd (NMIAL), a subsidiary of Adani Enterprises Ltd (AEL), has achieved financial closure for the greenfield international airport project at Navi Mumbai…
with the execution of financing documents with the State Bank of India (SBI)”, Bloomberg Quint quoted.
“The Adani Group’s focus is to create and provide best-in-class airport infrastructure and allied services to the consumer,” Jeet Adani, Director, NMIAL said.
“We aim to converge India’s biggest cities with other surrounding cities and towns in a hub and spoke model. Given the central role airports will play in the future, we intend to develop an economic ecosystem that has airports and airport users at its core. With this facility from the SBI, we have moved a step closer to providing Mumbai with another landmark utility,” he added.
“The achievement of financial closure signifies the commitment of the Adani Group to mobilise the required resources and complete, within the set timelines, the NMIA Project which was taken over pursuant to the acquisition of Mumbai International Airport Ltd. (MIAL) by the Group through Adani Airport Holdings Ltd. (AAHL), in July 2021,” NMAIL added.
Moreover, the Adani Group plans to commission the Navi Mumbai Airport by 2024.
The sale would help the national bank boost its capital buffers as it attempts to grow loans faster rapidly after a cash crunch in 2018, which curtailed new loans from shadow finance providers.
After that, India’s credit capacity has grown by leaps and bounds in the last five years. The deal will add to the $11.8 billion raised through equity offerings in India over the past 12 months.
While both parties have not yet finalized the terms of offerings, and the fundraising target could change, the SBI board had approved an equity offering of $2.8 billion in October last year.