Adani Ports acquires 95% stake in Gopalpur Port in Rs 3,350 cr deal

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File photo of Gopalpur Port. Photo courtesy: Wikipedia


India’s largest private port operator Adani Ports and Special Economic Zone (APSEZ) said on Tuesday it will acquire a 95 per cent stake in Gopalpur Port in Odisha at an enterprise value of Rs 3,080 crore, giving it “unprecedented access” to mining hubs.

Adani Ports will buy the stake in Gopalpur Port Ltd (GPL) by purchasing 56 per cent from the Shapoorji Pallonji Group and 39 per cent from Odisha Stevedores Ltd, which will continue as a joint venture partner post the acquisition. The Adani Group company already owns the Dhamra and Gangavaram ports on the eastern coast,


“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 of APSEZ.


The deal is expected to be completed in the first quarter of 2024-25 (FY25). In addition to the enterprise value of Rs 3,080 crore, there is a contingent consideration of Rs 270 crore estimated to be payable after 5.5 years, taking the total to Rs 3,350 crore.


The equity value of the transaction is Rs 1420 crore.


“In FY24, GPL (Gopalpur Port) is estimated to handle about 11.3 million tonne cargo (Y-o-Y growth of 52 per cent) and earn a revenue of Rs 520 crore (Y-o-Y growth of 39 per cent) and achieve ebitda of Rs 232 cr (Y-o-Y growth of 65 per cent). In our view, the Gopalpur Port is all set for strong growth and margin expansion in FY’25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking,” said the company, referring to earnings before interest, taxes, depreciation, and amortisation.


According to APSEZ, the presence of large crude steel plants in eastern India will fuel coking coal and limestone imports, along with the potential to move coal.


“New railway lines under evaluation will further enhance connectivity of Gopalpur Port with its hinterland. Gopalpur to be the least cost port for upcoming facilities in TATA SEZ in the hinterland,” said the company in an exchange filing.


Gopalpur Port handles dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina.


The port was awarded in 2006 for thirty years, with the provision of two extensions of 10 years each. The concessionaire has the flexibility to expand the port capacity as beyond the existing capacity of 20 million tonnes. The port has already received leased land of over 500 acres with the option to receive additional land on lease for future development.


This is Shapoorji Pallonji Group’s second stake sale in ports after it divesting its share in Dharamtar Port in Maharashtra to the JSW Group.


Deutsche Bank was the financial advisor to SP Group in the Gopalpur deal.


“This deal underscores our thesis on the prominence of Indian strategics as best placed to buy Indian assets,” said Muffazal Arsiwalla, head of M&A at Deutsche Bank, India, in a statement. “Domestic consolidation remains a key theme for quality assets to expand their presence and leadership in core markets. Additionally, this transaction reinforces continued confidence in the India Infra growth story.”

First Published: Mar 26 2024 | 2:01 PM IST