Adani Ports To Acquire 58.1% In GVL For ₹3,604

Adani Ports
Source: adaniports.com

On Tuesday, Gautam Adani’s company, Adani Ports and Special Economic Zone Ltd (APSEZ) announced acquiring a 58.1% stake in Gangavaram Port Ltd (GVL). Adani’s will be operating majority control on the private port at Visakhapatnam in Andhra Pradesh.

India’s largest network of commercial port operators signed a deal with DVS Raju and family to hold a stake in the multi-cargo facility for Rs 3,604 crore, mentioned the statement on exchanges.

Earlier this month, On March 3, Adani Ports had announced an acquisition of a 31.5% stake of Warburg Pincusin in Gangavaram Port, located in Andhra Pradesh’s northern parts, close to Vizag.

With the approval from regulatory authorities, the current deal with GVL gives Adani’s total control and ownership of over 89.6% on the port.

“The acquisition is in line with the company’s strategy of east coast to west coast parity and will provide an access to growth from new hinterland markets as it has coverage in resource-rich and industrial belt in eastern, central and southern India,” stated the Adani’s Port Exchange Filing.

Gangavaram, the second-largest non-major port in Andhra Pradesh, has a capacity of 64 million metric tonnes established under concession from the Government of Andhra Pradesh (GoAP) that extends till 2059. Shedding light on Gangavaram Port, Adani Ports said, “With a master plan capacity for 250 MMTPA with 31 berths, it has sufficient headroom to support future growth.”

Gangavaram Port is an all-weather, deep water multi-functional port that can handle a diverse mix of dry and bulk commodities including coal, iron ore, fertilizer, limestone, bauxite, sugar, alumina and steel.

As of Financial year 2019-20, GPL had a cargo volume of 34.5 MMT, revenue of ₹1,082 crore, Earnings before interest, tax, depreciation and amortization or Ebitda of ₹634 crore (59% margin) and profit after tax of ₹516 crore. The balance sheet shows that GPL is debt-free and has a surplus of cash balance of over ₹500 crore.

The company’s paid-up share capital is 51.7 crore shares, out of which 58.1% promoters Raju and family owns, 10.4% Government of Andhra Pradesh and 31.5% Warburg Pincus owned, which now Gautam Adani’s Adani Ports owns.

As per the PTI report, Karan Adani, chief executive officer (CEO) and whole-time director of APSEZ in a statement said, “The acquisition of GPL is a further augmentation of our vision of capitalizing 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.”