Karan Adani-led ports and logistics major Adani Ports and Special Economic Zone Ltd (APSEZ) has bought a 95% stake in the Gopalpur Port Ltd (GPL) for ₹3,080 crore. As per the deal, APSEZ has bought a 56% stake from the Shapoorji Pallonji Group and 39% of Orissa Stevedores Ltd (OSL) to acquire the port.
The company believes the acquisition will drive synergy with its existing ports and strengthen APSEZ’s presence on India's east coast.
The Adani group says the Gopalpur Port is set for “strong growth and margin expansion” in FY’25, and that it has identified opportunities to achieve higher operational efficiencies and infra debottlenecking. This could, says APSEZ, result in further value accretion for APSEZ shareholders.
The transaction is still subject to statutory approvals and fulfilment of other conditions precedents. The Gopalpur port is located on the east coast of India and the APSEZ estimates, it has a capacity worth 20 MMTPA to handle.
The government of Odisha awarded a 30-year concession to Gopalpur Port in 2006, with the provision of two extensions of 10 years each.
Adani Ports says: “As a deep draft, multi-cargo port, Gopalpur handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina. The port plays an important role in supporting the growth of mineral-based industries in its hinterland, like iron & steel, alumina and others. The concessionaire has full flexibility to design and expand the port as per the market demand.”
Additionally, Gopalpur Port has received more than 500 acres of land on lease for development, with an option to receive additional land on lease to meet future capacity expansions. The Adani group says the port is also “well connected” with its hinterland through the national Highway NH16 and a dedicated railway line connects the port, with the Chennai-Howrah main line.
Karan Adani, Managing Director of APSEZ, says the acquisition of Gopalpur Port will allow the company to deliver more integrated and enhanced solutions to APSEZ customers. “Its location will allow us unprecedented access to the mining hubs of Odisha and neighbouring states and allow us to expand our hinterland logistics footprint.”
He adds Gopalpur Port will add to the Adani Group’s pan-India port network, east coast vs west coast cargo volume parity and strengthen APSEZ’s integrated logistics approach.
In FY’24, GPL expects to handle about 11.3 MMT cargo (YoY growth - 52%) and earn a revenue of ₹520 crore (YoY growth - 39%) and achieve EBITDA of ₹232 crore (YoY growth - 65%).
Adani Ports & Special Economic Zone shares are trading 1.23% up at ₹1,297.40 on the BSE today. The shares opened a gap up and surged to an intra-day high of ₹1,307.50, taking the company's m-cap to ₹2,89,742.46 crore. Shares of APSEZ are currently trading 4.2% lower than the 52-week high touched on March 4, 2024. The share price has more than doubled (106.47%) in the past year, with a 23.97% surge in the calendar year 2024 alone. In the past six months, the share prices have surged 58.20%.
Brokerage major Motilal Oswal, in its January report on the APSEZ stock, had reiterated its "BUY" rating on the stock, with a revised target price of ₹1,410 (premised on 16x FY26E EV/EBITDA). It said APSEZ is well-positioned to surpass the higher end of FY24 guidance. "We roll forward our estimates to FY26 and expect APSEZ to register 14% volume growth over FY23-26 and revenue/EBITDA/PAT CAGR of 19%/18%/17% over the same period."
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