Loan refinancing improves Adani-run Mumbai airport's liquidity: CRISIL

However, rating agency says strengths partially offset by risks associated with delay in tariff orders and air traffic

Adani group-run Mumbai International Airport has seen an improvement in its credit profile following fund infusion and refinancing of its long-term debt at lower interest rates, rating agency CRISIL has said in its latest report. It added that liquidity is sufficient to meet near-term debt, operating expenses, and capital expenditure requirements.

MIAL’s external debt, which included loans and non-convertible debentures, has reduced to Rs 5,730 crore from Rs 7,250 crore as on June 30.

CRISIL Ratings has assigned ‘AA-Stable’ rating to Rs 310 crore proposed bank guarantee facility of MIAL. Ratings for certain long-term loan and non-convertible debentures were upgraded, but withdrawn on the company’s request and receipt of no dues certificate from lenders.

Last July, the Adani group took over the operations of Mumbai airport, which is the second busiest in the country. In May, it raised $750 million (Rs 5,715 crore) from asset manager Apollo Global to refinance existing loans and fund capital expenditure.

This will include an upgrade of amenities and repair and maintenance of airport facilities, among others, to help provide better customer experience.

The group has also provided unsecured loans worth Rs 1,780 crore to MIAL and this have been treated as quasi equity by CRISIL.

The rating also factors in healthy financial flexibility, and managerial and operational expertise that is available now that it is part of the Adani group. “Financial flexibility and refinancing risk is mitigated by creation of a sweep sinking fund and capex liquidity reserve in the upcoming fiscals. Distribution and any payments to sponsor/ group are not permitted till October 29, 2025,” CRISIL said.

CRISIL said that these strengths are partially offset by exposure to risks associated with the delay in tariff orders and air traffic and non-aero revenue growth recovery amidst the pandemic.

“We are set to transform the Mumbai airport from a functional transit point into a vibrant, full-fledged business, hospitality and leisure ecosystem for Mumbaikars and the region,” Prakash Tulsiani, chief executive officer of MIAL had said in May.