Adani adds another feather to his cap

Adani Ports and Special Economic Zone Ltd (APSEZ) on Tuesday announced the acquisition of a 95 per cent stake in Gopalpur Ports in Odisha from Shapoorji Pallonji Group and Orissa Stevedores Ltd at an equity value of Rs 1,349 crore.

In Gopalpur Ports, Shapoorji Pallonji Group (SP Group) firm SP Port Maintenance Pvt Ltd has a 56 per cent stake and Orissa Stevedores Ltd (OSL) has a 44 per cent stake.

Gopalpur Port is an all-weather deep-water berthing port with a capacity of 20 million tonnes per annum (MTPA) situated in Ganjam district of Odisha.

In a regulatory filing, APSEZ said that it has entered into definitive agreements to acquire the entire 56 per cent shareholding of SP Group and a 39 per cent stake of OSL in Gopalpur Port Ltd (GPL). OSL will continue as a JV partner with a 5 per cent stake, the filing added.

APSEZ said the equity consideration for a 95 per cent stake is Rs 1,349 crore, with an enterprise value of Rs 3,080 crore, subject to closing adjustments.

In addition to the enterprise value stated above there is a contingent consideration of Rs 270 crores estimated to be payable after 5.5 years, subject to fulfilment of certain conditions as agreed with the sellers, it added.

Along with deferred payments, total enterprise value is Rs 3,350 crore.

In a separate filing, SP Group informed that it has agreed to sell its stake in Gopalpur Port to APSEZ at an enterprise value of Rs 3,350 crore, as part of its deleveraging strategy with planned asset monetisation.

"Acquisition of Gopalpur Ports Limited (GPL) will drive synergy with our existing ports and strengthen APSEZ's presence on the East Coast," APSEZ said.

"The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our customers," APSEZ managing director Karan Adani said.

Adani added that its location will allow APSEZ unprecedented access to the mining hubs of Odisha and neighbouring states and allow us to expand our hinterland logistics footprint.

The port had recently signed up with Petronet LNG to set up a greenfield LNG regasification terminal.

In FY24, GPL is estimated to handle about 11.3 MMT cargo (up 52 per cent Y-o-Y) and earn a revenue of Rs 520 crore (up 39 per cent Y-o-Y).

The estimated EBITDA will be Rs 232 crore (YoY growth of 65 per cent).

"In our view, the Gopalpur Port is all set for strong growth and margin expansion in FY'25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking, implying further value accretion for APSEZ shareholders," APSEZ said.

According to the APSEZ statement, the Odisha government had awarded a 30-year concession to GPL in 2006, with the provision of two extensions of 10 years each.

The SP Group said that the port is capable of handling 20 MTPA of cargo volume.

The sale of the Gopalpur Port is the second port divestment in the last few months from the SP Group, a diversified construction and infrastructure, real estate and energy conglomerate.

It had earlier divested its Dharamtar Port in Maharashtra to JSW Infrastructure Ltd at an enterprise value of Rs 710 crore.

The group acquired the Dharamtar Port in 2015 and successfully turned around port operations, increasing capacity from less than 1 MTPA, when it took over to an expected capacity to handle 5 MTPA in FY24.

"The planned divestments of Gopalpur Port and Dharamtar Port, at a significant enterprise value, demonstrate our group's ability to turn around assets and create stakeholder value in a relatively short period of time, capitalising our core strengths in project development and construction," a Shapoorji Pallonji Group spokesperson said.

The spokesperson further said, "These divestments are key milestones in our roadmap to reduce group debt and set the stage for growth, taking advantage of the macro trends for demand in our core businesses, both in India and overseas.

The SP Group has been looking at several ways to reduce its debt, which has been reported to be around Rs 20,000 crore.

As a deep draft, multi-cargo port, Gopalpur handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina.

The port plays an important role in supporting the growth of mineral-based industries in its hinterland, like iron & steel, alumina and others.

APSEZ is a part of the globally diversified Adani Group.

It is the largest port developer and operator in India with seven strategically located ports and terminals on the west coast (Mundra, Tuna, Dahej, and Hazira in Gujarat, Mormugao in Goa, Dighi in Maharashtra and Vizhinjam in Kerala).

It has seven ports and terminals on the East coast of India  -- Haldia in West Bengal, Dhamra in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu and Karaikal in Puducherry, representing 27 per cent of the country's total port volumes.