Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest ports and logistics company, has acquired Gopalpur Port in Odisha for INR 3,080 crore aimed at driving synergy with APSEZ existing ports and strengthening APSEZ’s presence on the East Coast. The acquisition is through a definitive agreement to purchase the 56 per cent stake of the Shapoorji Pallonji Group and 39 per cent of Orissa Stevedores (OSL) in Gopalpur Port (GPL). The transaction is, of course, subject to statutory approvals and fulfilment of other conditions precedents.
The deal is significant as Gopalpur port is located on the east coast of India and has the capacity to handle 20 MMTPA( million metric tonnes per annum) of cargo. The Government of Odisha awarded a 30-year concession to GPL in 2006, with the provision of two extensions of 10 years each. As a deep draft, multi-cargo port, Gopalpur handles a diverse mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina. Karan Adani, Managing Director of APSEZ sees the acquisition of Gopalpur Port allowing the company to deliver more integrated and enhanced solutions to 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. GPL will add to the Adani Group’s pan-India port network, significantly enhance overall cargo volume, and strengthen APSEZ’s integrated logistics approach,” says Adani.
Besides, the port plays an important role in supporting the growth of mineral-based industries in its hinterland, like iron and steel, alumina and others. The concessionaire has full flexibility to design and expand the port as per the market demand. The Gopalpur port has received more than 500 acre of land on lease for development, with an option to receive additional land on lease to meet future capacity expansions. The port is well connected with its hinterland through the national Highway NH16 and a dedicated railway line connects the port with the Chennai-Howrah main line.
In addition to the enterprise value stated above there is a contingent consideration of INR 270 crore estimated to be payable after 5.5 years, subject to fulfilment of certain conditions as agreed with the sellers. In FY’24, GPL is estimated to handle about 11.3 MMT cargo with year-on-year growth of 52 per cent and earn a revenue of INR 520 crore which is a yoy growth of 39 per cent. In our view, the Gopalpur Port is all set for strong growth and margin expansion in FY’25 with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking, implying further value accretion for APSEZ shareholders.
Adani Ports and Special Economic Zone is a part of the globally diversified Adani Group and is the largest port developer and operator in India with 7 strategically located ports and terminals on the west coast (Mundra, Tuna, Dahej, and Hazira in Gujarat, Mormugao in Goa, Dighi in Maharashtra and Vizhinjam in Kerala) and 7 ports and terminals on the East coast of India (Haldia in West Bengal, Dhamra in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu and Karaikal in Puducherry, representing 27 per cent of the country’s total port volumes, thus providing capabilities to handle vast amounts of cargo from both coastal areas and the hinterland.