Adani Ports to acquire 31.5% stake in Gangavaram Port for Rs 1,954 cr

Adani Ports is also in discussions with DVS Raju and Family for their 58.1 per cent stake in GPL; the latest acquisition expands APSEZ's market share to 30 per cent across 12 locations in India

Adani Ports and Special Economic Zones (APSEZ) Ltd. on Wednesday said it is acquiring the 31.5 per cent stake held by Windy Lakeside Investment Limited (an affiliate of Warburg Pincus) in Gangavaram Port Limited (GPL) for around Rs 1,954 crore.

APSEZ, a key subsidiary of the diversified Adani Group, said the latest acquisition expands it's market share to 30 per cent across 12 locations in India. Adani Ports is also in discussions with DVS Raju and Family for their 58.1 per cent stake in GPL. 

The acquisition is 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.

"GPL is an all weather, deep water, multi-purupose port capable of handling fully laden super cape size vessels of upto 200,000 DWT. Currently, it 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," APSEZ said in a filing.

GPL handles a diverse mix of dry and bulk commodities including Coal, Iron Ore, Fertilizer, Limestone, Bauxite, Sugar, Alumina, and Steel. It 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 Rs 1,082 crore with an EBITDA of Rs 634 crore (margin of 59 per cent). Profit After Tax (PAT) came in at Rs 516 crore. The company is debt free with a cash balance of over Rs 500 crore.

The company has a paid up equity share capital of 51.7 Cr shares of which 58.1 per cent is owned by DVS Raju and Family (Promoter), 10.4 per cent by Andhra Pradesh government and 31.5 per cent by Warburg Pincus.

“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," Karan Adani, CEO and whole time Director of APSEZ said.

"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," he further said.

“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 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 DVS Raju, chairman of Gangavaram Port.