Vizhinjam Port Stake Sale: Adani Yet to Approach Centre for Clearances
Over a month after the Adani Group announced its plan to sell a 49% stake in Adani Vizhinjam Port Private Ltd. (AVPPL) to Terminal Investment Ltd. (TiL), the port arm of Switzerland-based Mediterranean Shipping Company (MSC), the port concessionaire has not yet approached the Centre seeking central clearances, including security clearance.
In a reply to a question in Parliament, Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal said the Kerala government has informed the Centre that it has received a proposal from AVPPL for prior approval of the Concessioning Authority, i.e., the Government of Kerala, for transfer of 49% equity in AVPPL. However, the Centre has not received any proposal from Adani Ports and Special Economic Zone Limited (APSEZ) in this regard.
The Minister also clarified that ports other than major ports, also referred to as non-major or minor ports, are under the administrative control of the respective State governments, and their development falls within the jurisdiction and responsibility of the States. Vizhinjam International Seaport is a non-major port being developed by the Kerala government under a Public Private Partnership (PPP) mode through a concession agreement with AVPPL.
The Kerala government has earlier constituted an Empowered Committee headed by the Chief Secretary to study and submit a report on whether the proposed divestment of a 49% stake in AVPPL — the concessionaire and operating company of the Vizhinjam International Seaport — is in the State's interests.
The stake sale has courted political controversy in Kerala, as AVPPL announced the deal to sell a 49% stake to MSC without seeking the prior approval of the Kerala government. As per the terms of the concession agreement, the proposed transaction could be completed only after obtaining the State's approval, along with clearances from the Union Ministries of Home Affairs and Ports, Shipping and Waterways, and the Competition Commission of India (CCI).
Speaking to The Hindu, sources in AVPPL said the company would approach the Centre seeking necessary clearances only after obtaining the approval of the State government. They said the company has completed the process of disclosing the proposed stake sale to the stock exchanges under Securities and Exchange Board of India (SEBI) regulations, along with its public announcement. The request seeking approval of the State government has been placed before the Kerala government and is pending. "Only after the State government's approval, further approval could be sought from the Government of India, including from the Competition Commission of India. Once all these conditions are satisfied, the shares could be transferred," the sources said.
The Vizhinjam International Seaport, located near Thiruvananthapuram, is a deep-water transshipment port designed to handle large container ships. It is seen as a critical infrastructure project for Kerala and for India's maritime trade. Given the scale of the project and the involvement of a foreign shipping major, the approval process is being closely watched by industry and political observers.
The stake sale is also part of the Adani Group's broader strategy to monetise assets and partner with global players in the port sector. MSC's Terminal Investment Ltd. operates container terminals worldwide, and its proposed entry into Vizhinjam is expected to bring operational expertise and international shipping connections to the port. However, the delay in moving past the initial approval stage highlights the complex regulatory framework governing PPP projects in India, where both State and Central approvals are often required.
As the matter stands, the ball is in the Kerala government's court first. The Empowered Committee's report will likely influence the State's decision. If the State grants its approval, the proposal will then move to the Union Ministries and the CCI for further scrutiny. Until then, the share transfer cannot be completed.
