InvestorQ : With Adani taking over control of Mumbai Airport from GVK group, what are the positive things you see?
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With Adani taking over control of Mumbai Airport from GVK group, what are the positive things you see?

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Rashi Mehra answered.
5 months ago
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Here is why I strongly believe that the takeover of MIAL by Adani from the GVK group should be positive for the Mumbai Airport.

· The deal will mark Adani Group getting controlling interest in MIAL, after GVK group of Hyderabad relented and sold their stake in MIAL to Adani to help reduce the debt.

· For a long time, GVK had been steadfast about not giving up their stake. However, it was the burden of Rs.8,000 crore debt that did them in.

· Even earlier, when the two South African investors in MIAL wanted an exit, GVK could not buy them out. That is when Adani chipped in and took their 23.5% stake in MIAL.

· GVK group had spread too thin leaving MIAL with Rs.8,000 crore of debt. Hence, bankers were applying pressure on GVK group to sell their stake or repay the loans.

· With this move effectively bringing down the curtains on the dreams of the GVK group in the infrastructure business, it is time for the next steps from Adani Group.

· Among other initiatives, Adani can start repayment of the huge debt burden making the MIAL business model more viable at this juncture and reducing solvency risk.

· The he much-awaited Navi Mumbai airport can take off with the project hanging fire for long. That project will start in Aug-21 and airport will be complete by 2024.

· Takeover of MIAL by Adani gives certainty to the airport plans as Adani will now account for 25% of passenger traffic and 33% of all air cargo on an annual basis.

· The business scale makes the Adani group a committed long term player. Of course, the bigger challenge will be the rapid monetization of adjoining land via malls and properties.

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