Fitch Upgrades Outlook on Mumbai International Airport's USD Notes to Positive, Affirms 'BB+'

Updated: May 02, 2025 12:56

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Fitch Ratings has changed Mumbai International Airport Limited (MIAL)'s USD 750 million senior secured notes due 2029 outlook to Positive from Negative while reaffirming the rating at 'BB+'. The move takes into consideration expectations of strengthening financials, robust passenger growth, and decreased funding risks. Read on for a comprehensive analysis:

Enhanced Financial Profile:

Fitch expects MIAL's leverage to be a 3.7x average in FY25-FY29, well below the earlier estimate of 4.8x.
Stronger EBITDA estimates will support capital expenditure, lessening debt dependence.

Tariff Adjustments & Revenue Growth:

The Airports Economic Regulatory Authority of India (AERA) will release new tariffs in June 2025.
New tariffs will increase revenue, strengthening MIAL's finances.

Passenger Growth & Market Strength:

MIAL, India's second-largest airport, recorded 55 million passengers in FY25, up from 53 million in FY24.
Mumbai’s growing metropolitan population supports long-term traffic expansion.

Adani Group’s Stake & Contagion Risk

Fitch reassessed contagion risk from Adani Group’s majority stake, concluding that MIAL remains financially stable.
The Indian government’s 26% shareholding via the Airport Authority of India (AAI) provides additional stability.

Capex & Navi Mumbai Airport Development:

MIAL is ringfenced from Navi Mumbai International Airport (NMIAL), 74% owned by MIAL.
NMIAL has raised committed equity for its first phase, with no financial burden on MIAL.

Future Prospects:

The last tariff order of AERA will be a crucial determinant of MIAL's financial future.
Ongoing access to funding and passenger additions may result in an upgrade of the rating.

This update highlights MIAL's enhanced financial health, robust market position, and strategic significance in India's aviation industry.

Sources: Fitch Ratings, Fitch Ratings, India Infoline

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