According to a report from Economic Times, Adani Airport Holdings is sanctioning a loan of Rs 15,000 crore from the State Bank of India for the proposed airport in Navi Mumbai. The report also claims that the estimated project for the second airport in India’s commercial capital has increased to Rs 20,000 crore. Adani Group may invest up to Rs 5000 crore, and the remaining will be funded through other borrowings.
The report remains as speculation as neither Adani Group nor State Bank of India confirmed the news.
Funding from India’s largest bank, the State Bank of India, indicates the return of CAPEX loans for infrastructure development projects. The bank is said to have closed the procedures for project appraisal and is now finalizing other specifications. According to an unnamed source, the tenure is likely to be 15 years, which is ideal as the lender is seeking a prudential credit opportunity.
There are possibilities for the bank to initially extend the proposed credit line and down-sell it to other interested lenders. Foreign players are also seeking possible syndication in the project, according to the source.
Phase 1 and 2 of Navi Mumbai airport may go operational by 2024
Adani Airport Holdings owns a 74% stake in Mumbai International Airport, which further holds a 74% share in Navi Mumbai airport. The remaining stake belongs to the Maharashtra government.
Adani Airport Holdings holds the stakes in seven airports and accounts for 25% of the country’s passenger traffic and 33% of air cargo.
As the COVID-19 pandemic has slowed down and the country is normalizing to its regularity, the number of passengers returning to air travel would also increase. This would lead to investments in airport infrastructure.
The proposed Navi Mumbai International Airport (NMIA) is envisioned as the second major airport in Mumbai after Chhatrapati Shivaji Maharaj International Airport in Santacruz. It will be built on 1,160 hectares of land. The Ministry has already granted environmental clearance and coastal regulation zone clearance for NMIA. An estimated timeline for the completion of Phase 1 and Phase 2 of the airport is December 2024. Phase 3 will be taken up on assessing the traffic triggers and is expected to expand by 2028. Phase 4 is more likely to be built by 2032.