The Indian government is actively discussing new regulations that would cap the number of airports a single entity can bid for during upcoming privatization rounds. This proposed policy could significantly alter the landscape for major players like Adani Airport Holdings, which has expressed intentions to aggressively pursue new airport acquisitions.
New Bidding Rules to Foster Competition
Under the proposed framework, a single enterprise would be limited to winning a maximum of two blocks, equivalent to four airports. Should the same entity emerge as the highest bidder for a third block, the second-highest bidder would be given the option to match the winning price. This measure is designed to encourage broader participation and prevent the concentration of crucial infrastructure in the hands of a few.
Discussions around these new bidding rules involve officials from the civil aviation and finance ministries, as well as Niti Aayog. The final decision will rest with the Public-Private Partnership Appraisal Committee, which oversees large-scale infrastructure privatization initiatives.
Impact on Adani Group's Expansion Ambitions
Adani Group, currently India's largest private airport operator with eight airports under its control (including the recently launched Navi Mumbai Airport), has previously indicated its desire to expand its portfolio further. Jeet Adani, a director at Adani Group, had stated the group's intention to bid for all 11 airports slated for the new privatization rounds. These new rules would directly challenge such an aggressive expansion strategy.
While Adani operates more airports, GMR Group, with its three major facilities in Delhi, Hyderabad, and Goa, handled a higher passenger footfall of 120.57 million in FY25, compared to Adani's 94.44 million during the same period. The government's push for competitive bidding aims to address concerns over market concentration and the potential for monopolies in the civil aviation sector, a concern heightened by past industry disruptions.
Airports Slated for Privatization
The 11 airports identified for privatization include:
- Amritsar
- Varanasi
- Gaya
- Bhubaneswar
- Hubli
- Raipur
- Kushinagar
- Kangra
- Aurangabad
- Tirupati
- Trichy
For the first time in this privatization exercise, smaller airports will be bundled with larger ones in similar regions. This strategy aims to attract private investment for facilities that might be less commercially attractive on their own. For example, Varanasi will be grouped with Kushinagar and Gaya, while Amritsar, Bhubaneswar, Raipur, and Trichy will be paired with Kangra, Tirupati, Aurangabad, and Hubli, respectively.