The Kerala government has raised objections to the proposed ₹12,000-crore ($1.4 billion) investment by Mediterranean Shipping Company (MSC) in the Vizhinjam International Seaport, saying it was not consulted before the deal was announced. The state has informed Adani Ports that any change in the ownership structure of the port project will require government approval under the concession agreement.
Chief Minister VD Satheesan said the state government had conveyed its "strong displeasure" to Adani Ports & Special Economic Zone (APSEZ) over the announcement.
According to the Chief Minister, any change in the concessionaire's shareholding pattern must receive prior approval from the Kerala government and will be examined strictly in accordance with the concession agreement and applicable regulations.
Earlier this week, Adani Ports announced that Switzerland-based Mediterranean Shipping Company (MSC), the world's largest container shipping company, would acquire a 49 percent stake in Vizhinjam port.
The proposed $1.4 billion investment is expected to become the largest foreign private investment in India's domestic port infrastructure.
Vizhinjam is India's first deep-water container transshipment port and has been developed to reduce the country's dependence on foreign transshipment hubs, particularly ports in Sri Lanka.
The port is designed to handle both domestic and international cargo more efficiently and at lower logistics costs. Adani Ports is the private concessionaire responsible for developing and operating the project, while the Kerala government remains a key stakeholder through the concession agreement governing the port's operations.
Adani Ports shares fell by as much as 1 percent in Friday's trade before recovering some losses. The stock was trading about 0.2 percent lower in the afternoon session after gaining around 6 percent over the previous three trading sessions following the investment announcement.