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Global private equity giant Warburg Pincus LLC will invest ₹800 crore for a 0.49 per cent stake in Adani Ports and Special Economic Zone Ltd (APSEZ), joining the list of marquee investors in India’s biggest private port operating company.
The US-based PE firm is expected to invest more into APSEZ or its units, sources said.
APSEZ will issue up to 1,00,00,000 equity shares at ₹800 a share to Windy Lakeside Investment Ltd, a unit of Warburg Pincus, for a total consideration of up to ₹800 crore, APSEZ said in a statement.
The preferential issue was approved by the board of APSEZ on Sunday.Windy’s exitOn March 3, APSEZ said it will acquire the 31.5 per cent stake held by Windy Lakeside Investment in Gangavaram Port Limited (GPL) for ₹1,954 crore. The deal helped Windy to exit from its 12-year investment in Gangavaram.
Of the total consideration, ₹800 crore is being paid to Windy by way of preferential issue of equity shares in APSEZ, sources said. “With the strong performance of APSEZ stock, it is better to pay Windy in stock rather than in cash,” a banker said.
APSEZ shares closed at ₹732 a share on the Bombay Stock Exchange and ₹749.65 a share on the National Stock Exchange on Friday.
APSEZ has not revealed how it intends to pay the balance consideration of the Gangavaram deal to Windy (Warburg Pincus), but sources indicated that a similar preferential issue arrangement could be worked out in some other units of APSEZ in lieu of cash. Additionally, the PE firm could also be gearing up for a larger exposure to the broader Adani conglomerate.
Karan Adani, CEO and Whole Time Director of APSEZ, hinted at this when he tweeted from his official handle: “We look forward to building on this relationship.. This investment, he added, is “another validation of APSEZ’s fundamentals as well as alignment of our environmental, social and governance (ESG) plans to global standards.”
The company aims to handle 500 million tonnes (mt) of cargo and become carbon-neutral by 2025.
ESG has gained significance to the Adani Group with APSEZ increasingly resorting to dollar bond issues for its funding needs.
More globally significant financial institutions (GSFI) are specifically excluding thermal coal exposures entirely while pricing climate risk into bond issues.
APSEZ’s integrated infrastructure business model combines a string of 12 ports on the eastern and western coasts, industrial zones and a pan India multi-modal logistics presence that is being increasingly served by renewable energy.
“APSEZ plans to position itself as the world’s largest ports and logistics platform over the next decade,” said a company official.
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