Visakhapatnam: India's largest private port operator Adani Ports and Special Economic Zone Ltd (APSEZ) on Wednesday said it has acquired 31.5 percent stakes in Gangavaram Port Ltd (GPL) from Warburg Pincus in Vizag city of Andhra Pradesh.
The acquisition is valued at Rs1,954 crore and subject to regulatory approvals.
GPL is the second-largest non-major port in Andhra Pradesh with a 64 MMT capacity established under a concession from the Government of Andhra Pradesh (GoAP). It is an all-weather, deep water, multi-purpose port capable of 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, Fertilizer, Limestone, Bauxite, Sugar, Alumina, and Steel. GPL is the gateway port for a hinterland spread over 8 states across eastern, western, southern, and central India.
In FY20, GPL had a cargo volume of 34.5 MMT, generated revenue of INR 1,082 Cr, EBITDA of INR 634 Cr (margin of 59%), and PAT of INR 516 Cr. GPL is debt-free with a cash balance of over INR 500 Cr.
The Company has a paid-up equity share capital of 51.7 Cr shares of which 58.1% is owned by DVS Raju and Family (Promoter), 10.4% by Government of Andhra Pradesh and 31.5% by Warburg Pincus.
APSEZ is acquiring the Warburg Pincus stake of ~16.3 Cr shares (31.5%) at INR 120/ share which works out to a consideration of Rs 1,954 Crore. The transaction implies an EV/EBITDA multiple of 8.9x and a P/E multiple of 12.0x (based on FY20 figures). APSEZ is also in discussions with DVS Raju & Family for their 58.1% stake (30 Crore shares) in GPL.
Karan Adani, CEO and Whole Time Director of APSEZ said: "The acquisition of GPL is a part of our 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 AP is a strategic complement to our recent acquisition of the Port of Krishnapatnam that serves the south of AP. We believe that GPL holds great potential to complement its bulk cargo terminals with new cargo categories that we intend to develop."
He said 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 the overall hinterland logistics footprint for a much larger base of customers. "We are grateful to the leaders of the AP Government for their support and are committed to doing our part to support their vision of accelerating the industrialization of AP. The Raju family must be complimented for having built an absolute world-class asset that we are proud to invest in," he said
Vishal Mahadevia, Managing Director of Warburg, said 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," he said.