Adani Ports and Special Economic Zone Ltd. has received approval from the Ahmedabad and Hyderabad benches of the National Company Law Tribunal to fully take over Gangavaram Port Ltd.
The Adani Group company will acquire the remaining 58.1% stake in a share-swap deal from DVS Raju and family for around Rs 6,200 crore, at Rs 120 apiece, according to the company's statement. Adani Ports had bought 31.5% holding in the company from Warburg Pincus and another 10.4% from the Andhra Pradesh government in FY22.
Adani Ports will issue around 47.7 million shares to the erstwhile Gangavaram Port promoters. The transaction implies an enterprise -Ebitda multiple of around 7.8x, which is accretive to shareholders from day one itself, the company said.
In fiscal 2022, the Gangavaram port handled cargo volumes of around 30 million metric tonnes, resulting in revenue of Rs 1,206 crore, Ebitda of Rs 796 crore, and Ebitda margin of 66%. It's a debt-free company with a cash balance of Rs 1,293 crore as on March 30.
Adani Ports and SEZ said it will bring world-class logistics synergies to the table, boosting the port's potential cargo volume to 250 metric million tonnes.
Located in northern Andhra Pradesh next to the Vizag port, Gangavaram is the third largest non-major port in the state. It has a capacity of 64 MMT, established under concession from Government of Andhra Pradesh that extends till 2059.
Gangavaram is an all-weather, deep water, multipurpose port capable of handling fully laden super cape size vessels of up to 2,00,000 deadweight tonnage, Adani Ports said in a statement. Currently, it operates nine berths and has freehold land of approximately 1,800 acres.
The port handles a diverse mix of dry and bulk commodities including coal, iron ore, fertiliser, limestone, bauxite, sugar, alumina and steel, and acts as a gateway port for a hinterland spanning eight states across eastern, southern and central India.
"Acquisition of GPL is a key milestone in consolidating our position as India’s largest transport utility and in achieving East Coast and West Coast parity," Karan Adani, chief executive officer and whole-time director, Adani Ports, said in the statement. "Gangavaram Port has excellent rail and road network connectivity... The recent addition of a container handling terminal will enable us to accelerate our growth of cargo volumes."
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.
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