Adani Ports and Special Economic Zone (APSEZ) has announced that it will buy a 58.1% stake held by DVS Raju and ₹ 3,604 crore in Gangavaram Port Limited (GPL). The deal is subject to regulatory approval.
Earlier this month, APSEZ announced the acquisition of a 31.5% stake in Warburg Pincus in the GPL. With this acquisition, APSEZ will hold an 89.6% stake in GPL, which has port operations in Andhra Pradesh.
Located close to Vizag Port, GPL is the second largest non-major port in Andhra Pradesh with a 64-MMT capacity and has been set up under a concession from the Government of Andhra Pradesh (GoAP), spanning 2059.
It is an all-weather, deep water, multi-purpose port capable of handling fully laden super cape-sized vessels up to 200 m DWT.
Currently, GPL operates nine berths and has approximately 1,800 acres of land. APSEZ said in a statement that with a master plan capacity of 250 MMTPA with 31 berths, the GPL has sufficient headroom.
The GPL handles a diverse mix of dry and bulk commodities, including coal, iron ore, fertilizer, limestone, bauxite, sugar, alumina, and steel. The GPL is a gateway to an interior area spanning eight states in eastern, southern and central India.
“GPL will benefit from APSEZ’s pan-India footprint, logistics integration, customer-centric philosophy, operational efficiency and a strong balance sheet.
In FY20, GPL had a cargo volume of 34.5 MMT, revenue of ₹ 1,082 crore, EBITDA of% 634 crore (margin of 59%) and PAT of ₹ 516 crore.
GPL is debt free, with a cash balance of more than ₹ 500 crore.
The company has a paid-up share capital of 51.7 crore shares, of which 58.1% is held by Mr. Raju and family (promoter) and 10.4% is with GoAP. The remaining 31.5%, which was held by Warburg Pincus, has been sold to APSEZ.
‘Tremendous addition’
“The acquisition of GPL is another enhancement of our vision to capitalize on an expanding logistics network impact that generates more value as we expand,” said Karan Adani, CEO and full-time director of APSEZ.
“Every additional node we are able to add to our network allows us to provide a greater level of integrated and enhanced solutions to our customers. In this context, GPL is a tremendous addition to our portfolio.
“We will now be able to tap on the respective handland, which is the fastest growing eastern region and brings logistic synergy APSEZ to the table, the GPL has the potential to become 250 MMT ports,” he said. This will undoubtedly help accelerate the industrialization of AP, ”said Mr. Adani.
“Gangavaram’s location north of AP is a strategic complement to our recent acquisition of the Port of Krishnapatnam,” he continued.
This is the second port acquisition in Andhra Pradesh by the Gujarat-based Adani Group, when it bought a controlling stake of ₹ 12,000 crore in Krishnapatnam Port. It is also developing a transshipment port at Vizhinjam in Kerala.
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