The Hindu Business Line : Ennore Port mulls IPO to raise Rs 800 cr

Business plan
It should have 43 mt throughput by 2013
It ought to undertake capital expenditure of Rs 3,324.3 cr — Rs 748 cr of its own investment and rest raised through public private partnerships

Mamuni Das
Rajasimhan T.E.

New Delhi/Chennai, May 2 Ennore Port Ltd, the only corporatised port under the Centre’s jurisdiction, is mulling an initial public offering (IPO) to raise about Rs 800 crore for improving its facilities.

The proposal, which is in its initial stage, was recently discussed by Ennore port authorities with the Shipping Ministry officials, said sources. If the IPO goes through, it will be the first major Government-owned port where general public could have a stake.

Mundra port and SEZ, the private port operator on the West coast, mopped up Rs 1,771 crore from the market in November 2007. It listed a 75 per cent premium to its offer price. Mundra Port handled 28.8 million tonnes (mt) cargo in 2007-08.

“Since Ennore port needs to raise Rs 800 crore or so, it is considering the appointment of a consultant to study the possibility of raising funds through a public issue. However, it is yet to take a board approval,” said a Ministry source. However, when Business Line contacted the Ennore Port Chairman, Mr S. Velumani, he denied any such plans.

The company had cash reserves of Rs 14.84 crore as on March 31, 2007, with an authorised share capital of Rs 500 crore and issued capital of Rs 300. It had a debt (secured and unsecured loans) of Rs 418.7 crore.

According to a business plan developed by HPC Hamburg Consulting and Consulting Engineering Services for the port, it should have 43 mt throughput by 2013 based on a conservative growth estimates.

To provide world class services, it has to undertake a capital expenditure of Rs 3,324.3 crore, of which Rs 748 crore has to be company’s own investment while the rest could be raised through public private partnerships.

In 2007-08, Ennore Port handled 11.6 mt of cargo — 9.05 mt thermal coal and 2.19 mt of iron ore. Ennore port is now constructing a new facility costing Rs 480 crore that can handle 12 mt of iron ore per annum.

The port has recently invited qualifying bids for setting up a container terminal. Besides, it is also in the process of setting up a common user coal terminal with 8 mt a year capacity at a cost of Rs 400 crore and a liquid cargo terminal with 3 mt a year capacity costing Rs 200 crore.

The new iron ore and coal terminals are expected to be ready by August 2010, and the containers berth by April 2011. The port also plans to set up an exclusive cargo berth for export of cars at a cost of Rs 140 crore. It is understood to be in talks with Nissan and Renault for export of 2 lakh cars a year to the European market by 2010.

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