Adani Group initiates talks to spin off airport biz, launch IPO

The Adani Group has started initial discussions to hive off its airport business from holding firm Adani Enterprises Ltd.

It is said to be the port-to-power conglomerate's first move towards listing the unit. The Gautam Adani-led group will likely raise $500 million through a private placement of shares in Adani Airports Holdings prior to an eventual IPO (initial public offering).

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Adani Group controls Mumbai airport as well as six regional facilities and is aiming at a valuation of Rs 25,500-29,200 crore ($3.5-4 billion) for the business.

"Discussions were held between top company officials and potential investment bankers. At least half a dozen global banks and a bunch of domestic bankers have met top officials recently," a source told the Economic Times, adding that the group is awaiting better air passenger numbers as the COVID-19 pandemic substantially curtailed passenger traffic, and "would like a year-end listing".

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Adani entered the airport sector in 2019. Adani Airports, incubated within Adani Enterprises, bagged the mandate to modernise and manage six airports - Jaipur, Lucknow, Thiruvananthapuram, Ahmedabad, Guwahati, and Mangaluru - through the AAI's (Airports Authority of India) tendering process.

The entity has become India's top airport platform, catering to at least 10 per cent of the country's air passenger traffic, surpassing 200 million people in FY20.

Adani has hived off several of its businesses - Adani Power, Adani Total Gas, Adani Green, and Adani Power Transmission - and raised equity through strategic stake sales to strategic and financial investors.

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