Why does Adani Group want to merge Australia's NQXT Terminal with Adani Ports? EXPLAINED

Adani group stocks: In a bid to deepen its global footprint, Adani Group company Adani Ports and Special Economic Zone (APSEZ) announced acquiring the North Queensland Export Terminal (NQXT) in Australia for $2.4 billion through a non-cash deal involving 14.35 crore new equity shares.

The Board of Directors of Adani Ports last week, on April 17, approved the acquisition of Abbot Point Port Holdings Pte Ltd (APPH), from Carmichael Rail and Port Singapore Holdings Pte Ltd (CRPSHPL), which is a related party to Adani Ports. Abbot Point Port Holdings holds the entities which own and operate the North Queensland Export Terminal.

Adani Ports-NQXT Terminal merger: Why is it important?

More than just a transaction, merger supports Adani Ports’ long-term vision of building a strategically connected port network along vital Indian trade corridors, especially across the Asia-Pacific region, an Adani Group spokesperson told Mint.

Strengthening Trade Corridors

The NQXT terminal, a deep water facility located in resource-rich Queensland, also offers significant strategic value. With 90% of its cargo volumes linked to fast-growing Asian markets —especially China and India — the terminal strengthens APSEZ’s control over the east-west trade corridor, according to the spokesperson.

Also, positioned near the Bowen and Galilee mining basins, NQXT is supported by a high-quality customer base and provides direct access to Australia’s rich reserves of coal and other key commodities. The port is also poised to play a central role in future exports of green hydrogen.

Financial and Operational Impact

The acquisition also has a strong financial and operational impact. According to the company, the NQXT Terminal merger would add 8% to APSEZ’s cargo volumes and 6.4% to its EBITDA based on FY25 projections.

More importantly, the acquisition would help accelerate the company’s goal of doubling its volumes to 1 billion metric tonnes per annum (MTPA) by FY30.

Furthermore, after the merger of Australia's NQXT Terminal with Adani Ports, Adani Ports' asset base is expected to jump by nearly ₹18,000 crore or over 18% of the company's current asset base.

Disciplined Global Expansion Strategy

This is the company’s fourth overseas acquisition in the past two years, reinforcing its methodical yet consistent ramp-up in international markets, said an Adani Group spokesperson. With this addition, APSEZ’s portfolio expands to 19 ports and terminals—15 domestic and 4 overseas—including assets in Israel, Tanzania, and Sri Lanka.

A senior company official also noted, “The company is very selective in its overseas plans and will only participate in locations where Indian trade routes will play a significant role.”

Global & Economic Context

The timing of this deal is also of importance as it comes at a time when the global port infrastructure has become a focal point in the evolving geopolitical and economic landscape, particularly amid rising trade tensions between the US and China.

Recent mega-deals — such as BlackRock’s $23 billion interest in Panama Ports and its $12.5 billion acquisition of Global Infrastructure Partners — highlight the growing strategic importance of ports worldwide, said the company, adding that APSEZ’s acquisition of NQXT not only adds scale but also enhances the company’s leverage in key global trade corridors.

Australia’s strategic importance as a resource-rich partner for India, especially in the context of securing green energy and rare earths, also adds another layer of strategic relevance.

The deal is priced at a 17x EV/EBITDA multiple, slightly below the 18x multiple seen in comparable transactions in the region, reflecting financial prudence compared to regional peers.

How do brokerages see this deal?

Brokerages also remain bullish on Adani Ports shares following the deal.

Unlike domestic M&As, NQXT (at 17x/10x FY25/29 EV/EBITDA) has limited multiple upside but should drive EBITDA growth, with management guiding a likely 75% increase in EBITDA over 4 years, said analysts at CLSA.

"While there may be market concern that the Adani Group might sell its high holding, it increased its equity stake by 490bps in FY24, well above FY22 levels, CLSA added, while maintaining its 'Outperform' rating with a target price of ₹1,764.

Brokerage Motilal Oswal Financial Services also retained a 'Buy' rating, saying that after the acquisition, APSEZ targets a higher contracted capacity, contract renewals (improved pricing) and APSEZ group synergies, which would boost EBITDA.

"We have retained our estimates for now and would update our growth forecasts once the acquisition is completed. We expect APSEZ to report 10% growth in cargo volumes over FY24-27. This would drive a CAGR of 14%/16%/21% in revenue/EBITDA/PAT over FY24-27. We reiterate our BUY rating with a TP of ₹1,560 (premised on 15x FY27 EV/EBITDA)," said MOSL analysts

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