The Adani Ports and Special Economic Zones (APSEZ) Ltd., India's largest private Ports & Logistics company and a key subsidiary of the diversified Adani Group, is acquiring the 31.5% stake held by Windy Lakeside Investment Limited (an affiliate of Warburg Pincus) in Gangavaram Port Limited (GPL). The acquisition is valued at Rs.1,954 Cr and subject to regulatory approvals.
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 concession from Government of Andhra Pradesh (GoAP) that extends till 2059. It is an all weather, deep water, multi-purpose 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 ~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 INR 500 Crs.
The Company has a paid up equity share capital of 51.7 Cr 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.
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.
Mr. Karan Adani, CEO and Whole Time Director of APSEZ said, "The acquisition of GPL is a part of our continued strategy to build out a port and logistics network that is unmatched in its ability to serve customers across the nation. The location of GPL in the north of AP is a strategic complement to our recent acquisition of the Port of Krishnapatnam that serves the south of AP. We believe that GPL holds great potential to complement its bulk cargo terminals with new cargo categories that we intend to develop. 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. We are grateful to the leaders of the AP Government for their support and are committed to doing our part to support their vision of accelerating the industrialization of AP. The Raju family must be complimented for having built an absolute world class asset that we are proud to invest in."
"From a green field 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.
Shares of ADANI PORTS AND SPECIAL ECONOMIC ZONE LTD. was last trading in BSE at Rs.729.55 as compared to the previous close of Rs. 720.35. The total number of shares traded during the day was 835267 in over 12466 trades.
The stock hit an intraday high of Rs. 754.65 and intraday low of 723.55. The net turnover during the day was Rs. 618086343.