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Adani Ports and Special Economic Zone Ltd (APSEZ) is set to acquire the 58.1 per cent stake held by DVS Raju and family, the promoters of Gangavaram Port Ltd, in a deal worth more than ₹3,600 crore that helps raise its stake to 89.6 per cent in the port located in Visakhapatnam.
Raju and family own about 30 crore shares in Gangavaram Port Ltd and the deal is said to have been struck at ₹120 a share, multiple sources said.
On March 3, APSEZ said it has acquired the 31.5 per cent stake held by Windy Lakeside Investment Limited (an affiliate of private equity firm Warburg Pincus LLC) in Gangavaram Port Limited (GPL) at ₹120 a share for ₹1,954 crore.
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On the prowl for more as promoters look to cash in on the stress situationAPSEZ said it was also in discussions with the port promoter DVS Raju and family to buy their 58.1 per cent stake in GPL, the second largest non-major port in Andhra Pradesh.
“The Adani Group never acquires minority stake in any port,” said a port industry consultant. “They always look for management and operational control. In the case of Gangavaram, it was just a case of sequencing of events,” he added.
APSEZ said it has nothing to say beyond what was mentioned during the March 3 announcement which said it was “in discussions with Raju and family to buy their 58.1 per cent stake”.
Gangavaram Port did not respond to a text message seeking comment.
The deal expands APSEZ port market share to 30 per cent across 12 locations.
Handling capacity
GPL is located in the northern part of Andhra Pradesh next to Centre-owned Visakhapatnam Port Trust with a capacity to handle 64 million tonnes (mt) of cargo.
Gangavaram Port Ltd, the entity that runs Gangavaram port, was awarded the rights by the Andhra Pradesh government to develop and operate the port for an initial period of 30 years beginning 2009 and extendable by two terms of 10 years each till 2059.
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More investment in the offing in APSEZ or its units by the marquee investorGPL is contractually mandated to share 2.1 per ent of its annual gross revenue with the AP government till 2039, 4.2 per cent from 2039 till 2049 and 8.4 per cent between 2049 and 2059.
Gangavaram is an all-weather, deep water, multi-purpose port capable of handling fully laden super capesize vessels of up to 200,000 tonnes. Currently, GPL operates 9 berths and has free hold land of about 1,800 acres. With a master plan capacity for 250 mt with 31 berths, GPL has sufficient headroom to support future growth.
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 handled 34.5 mt of cargo, generated revenue of ₹1,082 crore, EBITDA of ₹634 crore (margin of 59 per cent) and net profit of ₹516 crore. GPL is a debt free company with cash balance of over ₹500 crore.
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