Billionaire Gautam Adani on Wednesday said his ports-to-energy conglomerate acquiring a controlling stake in Mumbai airport will help expand its existing portfolio of six airports and create strategic adjacencies for the group's other businesses.
Earlier this week, Adani Airports, a subsidiary of Mumbai-listed Adani Enterprises, announced the acquisition of GVK Airport Developers Ltd's 50.50 per cent stake in the Mumbai International Airport Ltd (MIAL). It will also buyout 23.5 per cent stake of Airports Company of South Africa (ACSA) and Bidvest Group to get a 74 per cent controlling interest in Mumbai airport.
"The Mumbai International Airport is absolutely world-class," Adani said in a statement. "The addition of the Mumbai International Airport and the Navi Mumbai International Airport to our existing portfolio of six airports provides us a transformational platform that will help shape and create strategic adjacencies for our other B2B businesses."
MIAL holds a 74 per cent stake in Navi Mumbai Airport.
"This acquisition helps us redesign the way we will serve our customer base and bridge our B2C and B2B business models," he said.
Adani said Mumbai is set to become one of the top 5 global metropolitan centres of the 21st century and is expected to be the nation's leading airport as well as a core domestic and international hub.
This when passenger traffic across India is projected to grow 5-fold and the nation builds 200 additional airports to handle over 1 billion domestic and international passengers across the Tier 1, 2 and 3 cities, the majority of which will connect to Mumbai.
"Over this period, India's top 30 cities are expected to each require two airports and Adani Airports sees itself well-positioned to help build the infrastructure platform required," he said.
After seaports, Adani Group is betting big on the airport sector and has won the bids to run six AAI-built non-metro airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangalore. It has now entered the country's second busiest airport.
With the six non-metro airports and MIAL, Adani Group will become the largest operator of airports other than state-run AAI, which runs most of the airports.
Adani Enterprises in its latest annual report unveiled its ambition to be the largest private airport developer in the country by developing world-class infrastructure at airports, both at airside and landside, enhancing the passenger experience, and creating entertainment destinations (airport village, hotels, and malls).
To achieve the aim, it also plans to increase domestic airline connectivity to new and under-served destinations, and also raise the number of flights to long-haul destinations in the west and also to south-east Asia.
"It was Le Corbusier who had said that a city made for speed is made for success.
"It is airports that enable this speed and we see airports as the nucleus around which we can catalyse real-estate and entertainment facilities, e-commerce and logistics capabilities, time-sensitive industrial ecosystems, aviation-linked business and put in place other innovative business concepts – many of which will be enabled as a result of the mainstreaming of digitisation across every aspect of business and our daily lives," Adani said.
Stating that airports not just define the character of a city but also are a critical factor for the choice of a business location, tourism, urban economic growth and global economic integration, he said the economic value that the cities of the future create will be maximised around airports.
"As our nation progresses towards becoming the world's third-largest economy, the Adani Group's ability to serve this growth through a rapid build-out of airport infrastructure can be a significant enabler.
"We, therefore, see airports as a powerful engine to drive local economic development as well as act as a critical lever to help converge the tier 1 cities with the tier 2 and tier 3 cities in a hub and spoke model," he said.
The hub and spoke model is fundamental to enable a greater equalisation of increasing urban-rural divide as well as take advantage of the cost arbitrage that exists between the different locations to make India more competitive.
"This is critical for the creation of net new jobs," he said. "Given our deep infrastructure expertise, we are well-positioned to help make this happen."
Adani Airports won the mandate to modernise and operate six airports.
"Adani Airports will operate, manage & develop all these six airports for a period of 50 years," he said.
Adani Group is an integrated industrial conglomerate operating globally with six publicly traded companies with total revenues of USD 15 billion and a market capitalisation of nearly USD 30 billion.