Shares of Adani Ports and Special Economic Zone (APSEZ), on Thursday, rallied 6 per cent to hit a new high of Rs 765.70 on the BSE in intra-day trade after the company said it acquiring 31.5 per cent stake held by Warburg Pincus - in Gangavaram Port (GPL) for a consideration of Rs 1,954 crore.
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.
In FY20, GPL had a cargo volume of 34.5 MMT, generated revenue of Rs 1,082 crore, EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 634 crore (margin of 59 per cent) and profit after tax (PAT) of Rs 516 crore. GPL is debt free with cash balance of over Rs 500 crore.
APSEZ is acquiring the Warburg Pincus stake of around 163 million shares (31.5 per cent) at Rs 120 share which works out to a consideration of Rs 1,954 crore. 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 per cent stake (around 30 million shares) in GPL.
“With the completion of this deal, APSEZ’s market share will increase to above 30 per cent at 12 locations across India. The port provides APSEZ access to an adjacent hinterland that was largely untapped by it thereby placing APSEZ in a position to serve a broader set of port customers as well as expand its overall hinterland logistics footprint for a much larger base of customers,” ICICI Securities said in a note.
At 12:31 pm, Adani Ports was trading 4 per cent higher at Rs 761 on the BSE, as compared to 0.65 per cent decline in the S&P BSE Sensex. A combined around 22 million equity shares had changed hands on the counter on the NSE and BSE. In the past month, the stock has outperformed the market by surging 34 per cent, as compared to 1 per cent rise in the benchmark index.