Adani Ports and Special Economic Zones Ltd. agreed to buy a Rs 1,954-crore stake in Gangavaram Port Ltd. from Warburg Pincus.
Windy Lakeside Investment, an affiliate of the private equity firm, will sell its 31.5% in the port to the Adani Group firm, according to an exchange filing. The transaction is subject to regulatory approvals.
Adani Ports is also in talks with promoters DVS Raju and Family for their 58.1% stake (about 30 crore shares) in the port. The remaining 10.4% is held by the Government of Andhra Pradesh.
The port, located in the northern part of the state close to Vizag, has a capacity of 64 million metric tonnes. It was established under concession from the state that extends till 2059.
Gangavaram is an all-weather, deep water, multi-purpose port capable of handling fully-laden super-cape sized vessels of up to 200,000 deadweight tonnage. It’s a gateway to eight states across eastern, western, southern and central India.
According to the filing:
In FY20, the port handled cargo volume of 34.5 MMT, generated revenue of Rs 1,082 crore, operating income of Rs 634 crore, margin of 59% and a net profit of Rs 516 crore.
GPL is debt free with a cash balance of over Rs 500 crore.
Adani Ports is acquiring about 16.3 crore shares at Rs 120 apiece, which works out to Rs 1,954 crore.
Based on FY20 numbers, the transaction implies EV/Ebitda multiple of 8.9 times and a P/E multiple of 12 times.
In an analyst call after announcing the deal, Adani Ports said: