Expands marketplace percentage to 30%; in talks to shop for out port promoter DVS Raju and Family’s 58.1% stake

Adani Ports and Special Economic Zones (APSEZ) Ltd, will accumulate the 31.five% stake held with the aid of using Windy Lakeside Investment Limited (an associate of personal fairness company Warburg Pincus LLC) in Gangavaram Port Limited (GPL) for Rs 1,954 crore because the Ahmedabad-primarily based totally company keeps its dominance over the ports sector.

APSEZ is likewise in discussions with the port promoter DVS Raju and own circle of relatives to shop for their 58.1% stake in GPL, APSEZ stated in a statement.

The deal expands APSEZ port marketplace percentage to 30%.

The circulate comes some months after APSEZ closed the deal to shop for a seventy five% stake in Krishnapatnam Port Co Ltd, additionally in Andhra Pradesh, for an corporation price of Rs12,000 crore.

Gangavaram Port Ltd, the entity that runs Gangavaram port, is a unique motive organisation promoted with the aid of using D. Venkata Satyanarayana Raju, the previous co-founding father of IT offerings company Satyam Computer Services Ltd, after he gained the deal from the Andhra Pradesh authorities to expand and perform the brand new port for an preliminary length of 30 years and extendable with the aid of using phrases of ten years every until 2059.

D.V.S Raju and own circle of relatives holds a majority 58.1% stake withinside the port organisation, whilst Andhra Pradesh authorities has a stake of 10.4%. Global personal fairness company Warburg Pincus thru Windy Lakeside Investment invested near Rs one hundred fifty crore for a 31.five% stake in Gangavaram Port in 2008.

APSEZ is obtaining the Warburg Pincus stake at Rs120 in step with percentage, translating to a attention of Rs1,954 crore, fetching a huge top rate to Warburg on its 12-yr funding of Rs150 crore. At this price, it’s far certainly considered one among the most important exits for a PE company withinside the ports sector.

The transaction implies EV/EBITDA more than one of eight.nine instances and P/E more than one of 12.zero instances (primarily based totally on FY20 figures).

The APSEZ-Warburg deal values Gangavaram Port at Rs 6,204 crore.

This is better than the Rs4,500 crore fairness valuation for Krishnapatnam Port Co Ltd for which APSEZ paid Rs3,395 crores for a seventy five in step with cent stake.

The Krishnapatnam deal, though, turned into closed at ten instances the predicted FY21 EBITDA of round Rs1,two hundred crore.

In 2010, APSEZ had initiated talks with DVS Raju to accumulate Gangavaram Port however the negotiations fell thru over valuation sought with the aid of using the promoter.

GPL, placed subsequent to Centre-owned Visakhapatnam Port Trust, is the second one biggest non-main port in Andhra Pradesh with a sixty four million tonne (mt) capability.

Gangavaram is a deep water, multi-motive port able to coping with completely encumbered notable cape length vessels. Currently, GPL operates nine berths and has unfastened preserve land of about1,800 acres. With a grasp plan capability for 250 mt with 31 berths, GPL has enough headroom to guide destiny growth.

In FY20, GPL treated 34.five mt of shipment producing sales of Rs1,082 crore, EBITDA of Rs634 crore (margin of 59%) and income after tax of Rs516 crore. GPL is a debt unfastened organisation with coins stability of over Rs500 crore.

GPL handles a numerous blend of dry and bulk commodities together with coal, iron ore, fertilizer, limestone, bauxite, sugar, alumina and steel. GPL is the gateway port for a hinterland unfold over eight states throughout eastern, western, southern and valuable India.

State-run Rashtriya Ispat Nigam Ltd that runs the Vizag Steel Plant is the port’s largest customer.

“The area of GPL withinside the north of AP is a strategic supplement to our latest acquisition of the Port of Krishnapatnam that serves the south of AP,” Karan Adani, CEO and Whole Time Director of APSEZ, stated.

“GPL presents us tremendous get admission to to an adjoining hinterland that turned into in large part untapped with the aid of using APSEZ thereby putting us in a function to serve a broader set of port clients in addition to enlarge our standard hinterland logistics footprint for a miles large base of clients,” Karan added.