Adani Ports shares in focus as Adani group firm acquires 95% stake in GPL; what MD Karan Adani says

Shares of Adani Ports & Special Economic Zone Ltd (Adani Ports) are in focus today after the Adani group firm said it has entered into a definitive agreement on March 25 to acquire 95 oer cent stake of Gopalpur Ports Limited (GPL) from the existing shareholders.

Gopalpur port is located on the east coast of India and has the capacity to handle 20 mmt per annum.

The government of Odisha awarded a 30-year concession to GPL in 2006, with the provision of two extensions of 10 years each. Adani Ports said it bought 56 per cent stake from SP Port Maintenance Private Limited (SP Group) and 39 per cent stake from Orissa Stevedores Limited (OSL).

The equity consideration for 95 per cent stake is Rs 1,349 crore, with an enterprise value of Rs 3,080 crore, subject to closing adjustments, Adani Ports said. The acquisition is subject to approval from Commerce and Transport Department, the government of Odisha.

GPL is engaged in the business of handling various types of dry bulk and break bulk cargo. GPL is a deep draft, multi-cargo port, handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite sand, and alumina. The port handled 7.4 mmt of cargo in FY23. It has a capacity of 20 mmt.

“The operational revenue for FY23 was Rs 373 crore. GPL is estimated to handle about 11.3 mmt cargo and earn an estimated operational revenue of Rs 520 crore for FY24,” Adani Ports said.

The investment is in line with company’s strategy of East Coast to West Coast parity. GPL’s location will allow us unprecedented access to the mining hubs of Odisha and neighbouring states and allow us to expand our hinterland logistics footprint.

“In FY’24, GPL is estimated to handle about 11.3 MMT cargo (YoY growth – 52 per cent) and earn a revenue of Rs 520 crore (YoY growth – 39 per cent) and achieve Ebitda of Rs 232 crore (YoY growth – 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, implying further value accretion for APSEZ shareholders,” the company said in an exchange filing on BSE.

Karan Adani, Managing Director of APSEZ, said, “The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our customers

. Its 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, east coast vs west coast cargo volume parity and strengthen APSEZ’s integrated logistics approach.”