GVK Airport Holdings Ltd will acquire an additional 13.5% stake in Mumbai International Airport Ltd (MIAL) from South Africa's Bidvest Group for Rs 1,247.40 crore ($175 million).
GVK Power & Infrastructure Ltd said in a stock-exchange filing that its airports unit has chosen to exercise its right of first refusal to acquire Bidvest's stake. GVK's stake in MIAL will increase to 64% from 50.5% after completion of the deal.
The move thwarts the reported efforts of billionaire Gautam Adani-led diversified conglomerate Adani Group to pick up a 23.5% stake in the operator of the Mumbai airport from Bidvest and Airports Company South Africa.
It is not clear yet if GVK would also acquire the 10% stake held by Airports Company South Africa.
MIAL, in which the state-run Airports Authority of India owns 26%, operates India's second-largest and the world's busiest single-runway airport. It is also building the Navi Mumbai International Airport.
GVK is looking to raise funds through a stake sale in its airport arm in order to repay debt and meet the expenditure of the Navi Mumbai airport project. GVK is also considering a stake sale in its energy and transportation verticals to raise around Rs 2,000 crore.
The airport unit contributed Rs 3,423 crore, or 88.6% of GVK's total income for 2017-18, as compared with Rs 3,121 crore in the previous year.
The unit reported a profit after tax of Rs 35.41 crore in 2017-18, as per its annual report.