Adani Ports and Special Economic Zone Ltd (APSEZ) on Wednesday announced that it has concluded the acquisition of the Andhra Pradesh government’s stake of 10.4 per cent in Gangavaram Port Limited (GPL) for a consideration of Rs 645 crore.
The boards of APSEZ and GPL have also approved the merger of GPL with APSEZ, taking into consideration GPL’s valuation of Rs 120 per share and fair value of APSEZ at Rs 754.8 per share, resulting in a swap ratio of 159 shares in APSEZ for 1,000 shares in GPL for the 58.1 per cent stake held by DVS Raju and Family in GPL.
The merger, which has an appointed date of April 1, 2021 and is subject to NCLT approvals, is expected to conclude by March 31, 2022, said a statement by APSEZ, India’s largest private ports and logistics company and the flagship transportation arm of the diversified Adani Group.
Earlier, in April 2021, APSEZ had acquired 31.5 per cent from Windy Lakeside Investment Ltd, a Warburg Pincus affiliate, and had signed an agreement for the controlling stake of 58.1 per cent held by DVS Raju and Family.
Post the merger of GPL and APSEZ, DVS Raju and Family will receive approximately 4.8 crore shares resulting in 2.2 per cent stake in APSEZ worth Rs 3,604 crore.
GPL is debt-free with strong growth potential as part of the APSEZ portfolio. The transaction has been completed at an equity value of Rs 6,200 crore and implies an EV/FY21 EBTIDA multiple of 8.8x and results in EPS accretion of 7 per cent to APSEZ FY21 earnings.
GPL is a 64 MMT capacity non-major port established under concession from the government of Andhra Pradesh that extends till 2059 and is the gateway port for a hinterland spread over 8 states across eastern, western, southern and central India.
This acquisition significantly expands APSEZ’s access to several new markets. As a deep draft modern multipurpose port for handling fully laden Super Cape size vessels of up to 200,000 DWT, GPL handles a diverse mix of dry and bulk commodities including coal, iron ore, fertiliser, limestone, bauxite, sugar, alumina and steel.
In FY21, GPL had a cargo volume of 32.8 MMT, the revenue of Rs. 1,057 crore and EBITDA of Rs 625 crore and PAT of Rs 494 crore. In Q1 FY22, GPL handled 8.7 MMT of cargo and reported revenue of Rs 313 crore, EBITDA of Rs 215 crore and PAT of Rs 192 crore.
“We are committed to accelerating the industrialisation of Andhra Pradesh,” said Karan Adani, CEO and whole-time Director of APSEZ.
“The network of ports that we continue to build allows us to create an integrated mesh of logistics capabilities to deliver an unmatched set of services to our customers. Gangavaram is a major part of this mesh in one of India’s fastest-growing states. We are excited about the growth prospects of GPL, which is core to our east coast expansion strategy. GPL is advantageously located to allow us unprecedented access to the largely untapped hinterland market,” he added.