Adani Ports to acquire 31.5 pc in Gangavaram Port from Warburg Pincus for Rs 1,954 Cr

Ahmedabad (Gujarat) [India], March 3 : The Adani Ports and Special Economic Zones (APSEZ) Ltd, a key subsidiary of the diversified Adani Group, is acquiring the 31.5 per cent stake held by Windy Lakeside Investment Limited (an affiliate of Warburg Pincus) in Gangavaram Port Limited (GPL).
According to the company's release, the acquisition is valued at Rs 1,954 crore and subject to regulatory approvals.
GPL is located in the northern part of Andhra Pradesh next to Vizag Port. "It is the second-largest non-major port in Andhra Pradesh with a 64 million metric tonnes (MMT) capacity established under the concession from the Government of Andhra Pradesh (GoAP) that extends till 2059," the company said.
The release said that GPL is an all-weather, deep water, multi-purpose port capable of handling fully laden super cape size vessels of up to 200,000 deadweights (DWT).
"Currently, GPL operates nine berths and has free hold land of 1,800 acres. With a master plan capacity for 250 million metric tonnes per annum (MMTPA) with 31 berths, GPL has sufficient headroom to support future growth," it added.
Notably, GPL handles a diverse mix of dry and bulk commodities including coal, iron ore, fertilizer, limestone, bauxite, sugar, alumina, and steel. It is the gateway port for a hinterland spread over eight states across eastern, western, southern, and central India.
In FY20, GPL had a cargo volume of 34.5 MMT, generated revenue of Rs 1,082 crores, earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 634 crores (margin of 59 per cent), and profit after tax (PAT) of Rs 516 crores. "GPL is debt-free with a cash balance of over Rs 500 crores," Adani Group said.
According to the release, APSEZ has a paid up equity share capital of 51.7 crores shares of which 58.1 per cent is owned by DVS Raju and Family (Promoter), 10.4 per cent by the government of Andhra Pradesh and 31.5 per cent by Warburg Pincus.
"APSEZ is acquiring the Warburg Pincus stake of 16.3 crore shares (31.5 per cent) at Rs 120 per share which works out to a consideration of Rs 1,954 crore. APSEZ is also in discussions with DVS Raju & Family for their 58.1 per cent stake (30 Cr shares) in GPL.
Karan Adani, CEO and Whole Time Director of APSEZ said, the acquisition of GPL is a part of his company's continued strategy to build out a port and logistics network that is unmatched in its ability to serve customers across the nation.
"The location of GPL in the north of Andhra Pradesh is a strategic complement to our recent acquisition of the Port of Krishnapatnam that serves the south of Andhra Pradesh. We believe that GPL holds great potential to complement its bulk cargo terminals with new cargo catagories that we intend to develop," said Adani
"The port provides us great access to an adjacent hinterland that was largely untapped by APSEZ thereby placing us in a position to serve a broader set of port customers as well as expand our overall hinterland logistics footprint for a much larger base of customers. We are grateful to the leaders of the Andhra Pradesh government for their support and are committed to doing our part to support their vision of accelerating the industrialization of Andhra Pradesh. The Raju family must be complimented for having built an absolute world class asset that we are proud to invest in," he added.
Vishal Mahadevia, Managing Director and Head of Warburg Pincus India said, "From a green field project at the time of investment, Gangavaram Port has developed into a world class port . We have been very pleased with our partnership with the Raju family and the Gangavaram Port team, and look forward to the port's continued success in partnership with the Adani Group."
"We are very proud of the remarkable success of Gangavaram Port in becoming one of India's leading and most efficient deep water ports with ultra modern infrastructure. Warburg Pincus has been a supportive partner in this journey, and we look forward to the Adani Group's contributions in the next phase of the port's growth," said DVS Raju, Chairman of Gangavaram Port Limited.