Adani Ports receives NCLT approval to acquire remaining 58.1% stake in Gangavaram Port | Whuff News


Adani Ports and Special Economic Zone (APSEZ) on Monday received approval from NCLT Ahmedabad and NCLT Hyderabad to acquire the remaining 58.1% stake in Gangavaram Port through a composite scheme of arrangement. Despite this, GPL took a step closer to becoming a 100% subsidiary of Adani Group-backed companies. GPL is located in the northern part of Andhra Pradesh next to Vizag Port.

GPL is the third largest non-major port in Andhra Pradesh with a capacity of 64 MMT established under a concession from the Government of Andhra Pradesh (GoAP) extending till 2059.

The acquisition of GPL consists of 517 million shares in 120 per share aggregated to 6,200 crore. Adani Ports will acquire a 58.1% stake from DVS Raju & family through a share swap arrangement that will result in the issue of around 47.7 million APSEZ shares to the previous promoters of GPL.

“The transaction implies an EV/EBITDA multiple of around 7.8x (FY22 EBITDA of 796 crore), which is a value addition to APSEZ shareholders from day one itself,” Adani Ports said in its filing.

In FY22, Adani Ports had acquired 31.5% stake in the company from Warburg Pincus and another 10.4% from the Government of Andhra Pradesh.

In a regulatory filing, Karan Adani, Chief Executive Officer and Whole Time Director, APSEZ said, “The acquisition of GPL is a significant milestone in consolidating our position as India’s largest transport utility and in achieving East Coast & West Coast parity. Gangavaram Port has excellent rail & road network connectivity and is the business gateway to the hinterland spread across eight states. The recent addition of a container handling terminal will allow us to accelerate the growth of our cargo volume.”

Adani added, “APSEZ also brings world-class logistics synergies to the table, which will propel Gangavaram Port to a potential cargo volume of 250 MMT. This will boost Andhra Pradesh’s industrialization rate.”

GPL is an all-weather, deep-water, multi-purpose port capable of handling fully laden super cap size vessels of up to 200,000 DWT. Currently, the port operates 9 berths and has ~1,800 acres of freehold land.

With a master plan capacity of 250 MMTPA with 31 berths, Adani Ports in a filing said that GPL has sufficient headroom to support future growth.

GPL will benefit from Adani Ports’ pan-India footprint, logistics integration, customer-centric philosophy, operational efficiencies and strong balance sheet to deliver a combination of high growth by increasing market share and adding additional cargo types as well as better margins and returns, the filing said.

GPL is a debt-free company with a cash balance of 1,293 crore as on 31 March 2022. In FY22, the port handled a cargo volume of around 30 million metric tonnes, while its revenue stood at 1,206 crore and EBITDA at 796 crore, which resulted in an EBITDA margin of 66%.

On the BSE, shares of Adani Ports closed at 807.85 each down by 1.10%. The company’s market cap is around 1,70,648.07 crore.

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