Adani Ports and Special Economic Zone (APSEZ) has announced it will acquire the 58.1% stake held by D.V.S. Raju and family in Gangavaram Port Limited (GPL) for ₹3,604 crore. The deal is subject to regulatory approvals.
Earlier this month, APSEZ had announced the acquisition of Warburg Pincus’s 31.5% stake in GPL. Together with this acquisition, APSEZ will have 89.6% stake in GPL, which has its port operations in Andhra Pradesh.
Located close to the Vizag Port, GPL is the second largest non-major port in Andhra Pradesh with a 64-MMT capacity and established under concession from the Government of Andhra Pradesh (GoAP), which extends till 2059.
It is an all-weather, deep-water, multi-purpose port capable of handling fully laden super cape size vessels of up to 200,000 DWT.
Currently, GPL operates nine berths and has free hold land of around 1,800 acres. With a master plan capacity for 250 MMTPA with 31 berths, GPL has sufficient headroom to support future growth, APSEZ said in a statement.
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 eight States across eastern, southern and central India, it added.
“GPL will benefit from APSEZ’s pan-India footprint, logistics integration, customer-centric philosophy, operational efficiencies and strong balance sheet to deliver a combination of high growth by enhancing market share and add additional cargo types and improved margins and returns,” it said.
In FY20, GPL had a cargo volume of 34.5 MMT, revenue of ₹1,082 crore, EBITDA of ₹634 crore (59% margin) and PAT of ₹516 crore.
GPL is debt-free, with a cash balance of over ₹500 crore.
The company has a paid-up share capital of 51.7 crore shares, of which 58.1% is owned by Mr. Raju and family (promoter) and 10.4% by GoAP. The balance 31.5%, which was with Warburg Pincus, has been sold to APSEZ.
Karan Adani, CEO and Whole Time Director of APSEZ, said, “The acquisition of GPL is a further augmentation of our vision of capitalising on an expanded logistics network effect that generates greater value as it expands.”
“Every additional node that we are able to add to our network allows us to deliver a greater level of integrated and enhanced solutions to our customers. In this context, GPL is a tremendous addition to our portfolio,” he said.
“The associated hinterland we will now be able to tap into is one of the fastest growing in the eastern region, and with the logistic synergies APSEZ brings to the table, GPL has a potential to become a 250 MMT port. This will undoubtedly help accelerate the industrialisation of A.P.,” Mr. Adani added.
“The location of Gangavaram in the north of A.P. is a strategic complement to our recent acquisition of Port of Krishnapatnam that serves the south of A.P.,” he further said.
This is the second port acquisition in Andhra Pradesh by the Gujarat-based Adani group after it bought a controlling stake in Krishnapatnam Port for ₹12,000 crore. It is also developing a transshipment port at Vizhinjam, Kerala.
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