Kerala Government Starts Legal Review of Adani's Stake Sale in Vizhinjam Port to MSC
The Kerala government has initiated a legal examination of the Adani Group's proposal to sell a 49% stake in Adani Vizhinjam Port Private Limited (AVPPL) to Switzerland-based Mediterranean Shipping Company (MSC) Group. The proposal was submitted to state officials late Wednesday, following controversy over whether the state's approval is required for the transaction.
The controversy arose after Leader of the Opposition Pinarayi Vijayan raised the matter in the state assembly. Chief Minister V.D. Satheesan argued that the Adani Group had not communicated its decision to the state government and that state approval is mandatory. In response, the company promptly submitted the proposal to the Ports Department Secretary and the Managing Director of Vizhinjam International Seaport Limited (VISL), a special purpose vehicle wholly owned by the Kerala government.
The proposal has now been forwarded to the Law Department for legal scrutiny. After the legal review, it will be examined by a high-power committee headed by the Chief Secretary. Based on the committee's recommendations, the state cabinet will decide whether to approve the stake sale. If the state government gives its nod, the company must then seek clearance from the central government, including approvals related to foreign investment and security. The final memorandum of understanding for the stake sale will be signed only after all necessary approvals are obtained, according to sources.
The Adani Group has stated that the proposed transaction is in accordance with the concession agreement signed with the state government. According to the agreement, up to a 74% stake can be divested after one year from the commencement of the port's commercial operations, which began on December 4, 2024. MSC will acquire the 49% stake for $1.397 billion (approximately ₹13,220 crore) through its container terminal operating arm, TiL. The transaction is subject to customary approvals, including regulatory clearances, as per the port company.
