Adani picks up 95% in Gopalpur Port for ~3K cr
India’s largest port operator Adani Ports and Special Economic Zone (APSEZ) has expanded its presence on India’s coastline after buying 95 per cent in Odisha’s Gopalpur Port Ltd (GPL) at an enterprise value of ~3,080 crore.
“Its (Gopalpur Port) location will allow us unprecedented access to the mining hubs of Odisha and neighbouring states and allow us to expand our hinterland logistics footprint. GPL will add to the Adani group’s pan-india port network, significantly enhance overall cargo volume, and strengthen APSEZ’S integrated logistics approach,” said Karan Adani, chief executive officer, Adani Ports & Special Economic Zone Ltd. The Adani group company, which already owns ports like Dhamra and Gangavaram on the eastern coast, will acquire the stake in brownfield GPL by purchasing 56 per cent from the Shapoorji Pallonji (SP) Group and 39 per cent from Odisha Stevedores Ltd, which will continue as the JV partner post the acquisition.
The deal is expected to be completed in the first quarter of 2024-25 (FY25). In addition to the enterprise value of ~3,080 crore, there is a contingent consideration of ~270 crore estimated to be payable after 5.5 years, taking the total to ~3,350 crore.
The sale of GPL is the second port divestment in the past few months from the SP group, a diversified construction and infrastructure, real estate and energy conglomerate. It had earlier divested its Dharamtar Port in Maharashtra to JSW Infrastructure for an enterprise value of ~710 crore.
“These divestments are key milestones in our road map to reduce group debt and set the stage for growth, taking advantage of the macro trends for demand in our core businesses, both in India and overseas,” said a SP group spokesperson. The SP group has been looking at several ways to reduce its debt, which has been reported to be around ~20,000 crore.
The equity value of the transaction is ~1,420 crore.
In FY24, GPL is estimated to handle about 11.3 million tonne cargo (up 52 per cent YO-Y) and earn a revenue of ~520 crore (up 39 per cent) and achieve earnings before interest, taxes, depreciation, and amortisation of ~232 cr (up 65 per cent).
“In our view, the Gopalpur Port is all set for strong growth and margin expansion in FY25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking,” APSEZ said.
ITS (GOPALPUR PORT) LOCATION WILL GIVE US UNPRECEDENTED ACCESS TO THE MINING HUBS OF ODISHA AND NEIGHBOURING STATES AND ALLOW US TO EXPAND OUR HINTERLAND LOGISTICS FOOTPRINT”
Karan Adani
CEO, Adani Ports & SEZ
Strategic significance
The presence of large crude steel plants in the eastern hinterland will fuel coking coal and limestone imports, while the potential to tap thermal coastal coal movements in Gopalpur’s hinterland presents an upside potential.