CRISIL Downgrades Mumbai Airport Loans Due To Weak Liquidity Profile

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File photograph integrated Terminal 2 of Chhatrapati Shivaji Maharaj International Airport, Mumbai. Source:

CRISIL on Thursday said it had downgraded its rating on the project and ADF loans of Mumbai International Airport Ltd (MIAL) to ‘CRISIL C’ from ‘CRISIL B’ as the airport operators liquidity profile remained weak.

CRISIL Downgrades Rating

In a report on Thursday, the credit rating agency said: “CRISIL has downgraded its rating on the project and ADF loans of Mumbai International Airport Limited (MIAL) to ‘CRISIL C’ from ‘CRISIL B’. The rating continues on ‘Rating Watch with Negative Implications’. The ‘CRISIL C’ rating on the company’s ₹350 crore term loan against real estate deposits (RESD loans) and ‘CRISIL A4’ rating on its short-term bank facilities remain on ‘Rating Watch with Negative Implications’.”

The downgrade of rating pertains to the project and airport development fund (ADF) loans of Mumbai International Airport Ltd (MIAL).

Mumbai Airport: Weak Liquidity Profile

Mint in a report said, “Liquidity profile for MIAL has remained weak, due to delay in recovery of demand in airline passenger traffic post Covid-19 induced disruptions, and will lead to challenges in debt servicing in fiscal 2021,” CRISIL said.

According to CRISIL, long-term debt instruments with C rating are considered to have very high risk of default regarding timely servicing of financial obligation, while instruments with B rating are considered to have high risk of default regarding timely servicing of financial obligations.

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A passenger getting his RT-PCR test done at Mumbai’s Chhatrapati Shivaji Maharaj International Airport on Wednesday. Source: MIAL

Mint reported that A4 ratings for short-term debt are considered to have minimal degree of safety regarding timely payment of financial obligations. Such instruments carry very high credit risk and are susceptible to default.

MIAL, which has been severely affected by the ongoing COVID-19 pandemic, has sought an extension in payment holiday on loans till March 2022 from its lenders.

The Hyderabad-based GVK Group controls 50.5% of MIAL’s shareholding, while Airports Authority of India (AAI) owns 26% and the remaining 23.5% is split between the two foreign partners—Bidvest and Airports Company South Africa (ACSA), which has a 10% stake.

Earlier in August, Adani Group acquired 74% stake in the Mumbai airport, buying out stakes of GVK Group, ACSA, and Bidvest Group. However, the transfer of shares to Adani Group is yet to be completed with pending approval. The Adani Group will assume control once this is done.


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