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Home >Companies >News >Adani Ports to acquire minority stake in Andhra's Gangavaram Port

Adani Ports to acquire minority stake in Andhra's Gangavaram Port

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Adani Ports and Special Economic Zone (APSEZ) owns and operates eight ports and terminals in India.

  • The acquisition is valued at 1,954 crore and subject to regulatory approvals
  • APSEZ is also in discussions with DVS Raju & Family for their 58.1% stake in GPL

India’s largest private port operator Adani Ports and Special Economic Zone Ltd (APSEZ) on Wednesday said it has acquired 31.5% in Andhra Pradesh's Gangavaram Port Ltd (GPL) from Warburg Pincus.

India’s largest private port operator Adani Ports and Special Economic Zone Ltd (APSEZ) on Wednesday said it has acquired 31.5% in Andhra Pradesh's Gangavaram Port Ltd (GPL) from Warburg Pincus.

"The acquisition is valued at 1,954 crore and subject to regulatory approvals," the company said in a BSE filing.

"The acquisition is valued at 1,954 crore and subject to regulatory approvals," the company said in a BSE filing.

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APSEZ is also in discussions with DVS Raju & Family for their 58.1% stake in GPL.

"APSEZ is acquiring the Warburg Pincus stake of ~16.3 Cr shares (31.5%) at INR 120/ share which works out to a consideration of INR 1,954 Crs. The transaction implies EV/EBITDA multiple of 8.9x and P/E multiple of 12.0x (based on FY20 figures). APSEZ is also in discussions with DVS Raju & Family for their 58.1% stake (~30 Cr shares) in GPL," the company stated.

GPL has a paid-up equity share capital of 51.7 crore shares of which 58.1% is owned by DVS Raju and Family (Promoter), 10.4% by Government of Andhra Pradesh and 31.5% by Warburg Pincus, Adani said in a staement.

GPL is located in the northern part of Andhra Pradesh next to Vizag Port. It is the second-largest non-major port in Andhra Pradesh with a 64 MMT capacity established under a concession from Government of Andhra Pradesh (GoAP) that extends till 2059.

It is an all weather, deep water, multi-purupose port capable of handling fully laden super cape size vessels of upto 200,000 DWT. Currently, GPL operates 9 berths and has free hold land of approximately 1,800 acres. With a master plan capacity for 250 MMTPA with 31 berths, GPL has sufficient headroom to support future growth.

GPL handles a diverse mix of dry and bulk commodities including Coal, Iron Ore, Fertilizer, Limestone, Bauxite, Sugar, Alumina, and Steel. GPL is the gateway port for a hinterland spread over 8 states across eastern, western, southern and central India. In FY20, GPL had a cargo volume of 34.5 MMT, generated revenue of INR 1,082 Crs, EBITDA of INR 634 Crs (margin of 59%) and PAT of INR 516 Crs. GPL is debt free with cash balance of over 500 crore.

Commenting on the acquisition, Karan Adani, CEO and Whole Time Director of APSEZ said, “The port provides us great access to an adjacent hinterland that was largely untapped by APSEZ thereby placing us in a position to serve a broader set of port customers as well as expand our overall hinterland logistics footprint for a much larger base of customers."

“From a greenfield project at the time of investment, Gangavaram Port has developed into a world class port . We have been very pleased with our partnership with the Raju family and the Gangavaram Port team, and look forward to the port’s continued success in partnership with the Adani Group," said Vishal Mahadevia, Managing Director / Head of Warburg Pincus India.

“We are very proud of the remarkable success of Gangavaram Port in becoming one of India’s leading and most efficient deep water ports with ultra modern infrastructure. Warburg Pincus has been a supportive partner in this journey, and we look forward to the Adani Group’s contributions in the next phase of the port’s growth," said Mr. DVS Raju, Chairman of Gangavaram Port Limited.

Earlier, Mint reported quoting sources that the Adani group is considering an alternative proposal to invest in Colombo port’s West Container Terminal (WCT), after several rounds of discussions between the Sri Lankan, Indian and Japanese governments to revive its investment in the East Container Terminal (ECT) seemed to come to naught.

Talks between the Adani group and the Lankan government come even as New Delhi is seen as sticking to its position that Sri Lanka honour the commitment given to the governments of India and Japan on developing the ECT, the report added.

Adani Ports and Special Economic Zone (APSEZ) owns and operates 12 ports and terminals in India, currently.

Adani has added $13.3 billion to his wealth this year, according to the Bloomberg Billionaires Index, the most in the world after Dan Gilbert, whose wealth surged following an initial public offering of his mortgage firm Rocket Cos.

Adani Ports completed the acquisition of Dighi Port Ltd. in the western Indian state of Maharashtra last month.

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