In June, Mint had reported that the company had paused a number of acquisitions across the group, including that of the Krishnapatnam port, as it re-evaluated priorities following the coronavirus pandemic, renegotiating acquisition prices lower
MUMBAI: India’s largest private port operator Adani Ports and Special Economic Zone Ltd (APSEZ) has completed the acquisition of Krishnapatnam Port Co Ltd (KPCL) for an enterprise value of ₹12,000 crore. This will result in APSEZ having a 75% controlling stake in KPCL, the Adani group said in a press release.
On 3 January, APSEZ had signed a deal to buy the port for an enterprise value of ₹13,752 crore.
Mint had reported in June that the company had paused a number of acquisitions across the Adani group, including that of Krishnapatnam port, as it re-evaluated priorities following the coronavirus pandemic, renegotiating acquisition prices lower.
KPCL is a multi-cargo facility port situated in the southern part of Andhra Pradesh. In FY21, KPCL is expected to generate an EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately ₹1,200 crore, resulting in an acquisition EV (enterprise value)/ EBITDA multiple of 10.
This acquisition will accelerate APSEZ’s progress towards 500 million tonnes cargo handling capacity by 2025 and is another step forward in its stated strategy of cargo parity between west and east coasts of India, the group said.
"I am happy that KPCL the second largest private port in India has now become part of APSEZ portfolio," Karan Adani, chief executive officer and whole time director of APSEZ, said. “This transformational acquisition enables us to roll out world class customer service to an increased customer base and provide pan India solution to them. Our experience of turning around acquisitions like Dhamra and Kattupalli ports will enable us in harnessing the potential of KPCL. We will target to enhance throughput at KPCL to 100 million tonnes by FY25 and double its EBIDTA by FY23.
"With a vast waterfront and land availability of over 6,700 acres, KPCL is capable of replicating Mundra and would be future ready to handle 500 million tonnes," Adani said. “We will replicate our operations and maintenance philosophy at KPCL, continue to focus on environment, reduce emission levels and have zero tolerance for fatalities and thus improve returns to stakeholders."
APSEZ’s 11 strategically located ports and terminals — Mundra, Dahej, Kandla and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam in Andhra Pradesh, and Kattupalli and Ennore in Chennai — represent 24% of the country's total port capacity, handling cargos from both coastal areas and the vast hinterland. It has also emerged as the highest bidder, offering ₹650 crore, to extinguish the debt and take over the under-construction Dighi Port in Maharashtra under the corporate insolvency resolution process.