ICICI Bank Mounts Challenge Against MIAL's ₹3,240 Crore Rights Issue

ICICI Bank has taken legal action to challenge Mumbai International Airport Ltd's (MIAL) proposed ₹3,240 crore rights issue, citing contractual violations that could dilute pledged equity shares used as security for loans worth $1.25 billion, as per news reports. The issue has been brought before the Bombay High Court and reflects broader concerns about shareholder rights and lender protections in large infrastructure firms.

Legal Challenge Over Equity Dilution

ICICI Bank, acting through its Bahrain branch on behalf of a consortium of lenders, argues that the planned rights issue would diminish the pledged stake of 32% in GVK Airport Holdings to around 4.37%, thereby violating a 2017 share-pledge agreement and an interim solution undertaking. 

The bank’s suit also contests the share price of ₹10 per rights issue share, calling it “not reflective of fair market value and the minimum permissible price”. A hearing on the matter is scheduled for 21 July before Justice RI Chagla, where ICICI Bank seeks an interim injunction to suspend the rights issue and conditionally release subscription funds.

Loan Details and Ownership Context

The dispute traces back to loans granted to the GVK Group of $1 billion in September 2011 and $250 million in March 2014, which were secured against GVK Airport Holdings’ shares, which held 50.5% of MIAL. The bank argues that the proposed rights issue would reduce the value of shares pledged against loans worth $1.25 billion extended earlier to the GVK Group, which formerly owned MIAL before the Adani Group took control in 2021.

Post-2021, GVKAHL was acquired by Adani Airport Holdings, now holding a 23.5% stake, with the Airports Authority of India owning 26%. ICICI Bank contends that GVKAHL’s refusal to subscribe, communicated five days before the closing date on July 5, was “deliberate and prejudicial to the lenders’ interests.” Lenders, including Bank of Baroda, Bank of India, Indian Overseas Bank, and Canara Bank, have joined the petition.

ICICI Bank is represented by Senior Counsel Venkatesh Dhond and Siddharth Ranade, while other parties are represented by Senior Advocate Vikram Nankani and Rashmikant & Partners.

Also Read: Yes Bank: SMFG Eyes Additional $1.1 Billion Investment!

Conclusion

ICICI Bank’s legal challenge highlights the bank’s commitment to protecting lender interests and holding corporate actions to their contractual obligations. As the Bombay High Court prepares to hear the matter, the outcome could have significant implications for equity pledges, lender protections, and shareholder-rights clauses within major financing deals.

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