Adani Ports Acquires 95% Stake in Gopalpur Port for Rs 3,080 Crore

Adani Ports and Special Economic Zone, India's leading private port operator has announced plans to acquire a 95% stake in Odisha's Gopalpur Port. The deal valued at ₹1,349 crore  or $161.74 million with an enterprise value of approximately ₹3,080 crore aims to boost APSEZ's foothold along India's eastern coast while the enterprise value of the transaction is estimated to be around ₹3,080 crore.

Adani Port Acquisition Details

Adani Ports will acquire a 56% stake in Gopalpur Port from the Shapoorji Pallonji Group and an additional 39% from Orissa Stevedores Ltd. The completion of the transaction depends on obtaining regulatory approvals and meeting other specified conditions. Additionally, there's a contingent consideration of ₹270 crore expected to be paid after 5.5 years subject to specific conditions agreed upon with the sellers.

Gopalpur Port operational since 2015 plays a crucial role in serving the steel industry. Located strategically between Paradip Port and Vizag Port along the Bay of Bengal its connectivity via NH-516 and railway sidings makes it pivotal for cargo handling. Notably, the port has flexibility in charging market rates without regulatory constraints, enhancing its appeal. With a current capacity of approximately 247 million tonnes the acquisition strengthens Adani Port's foothold in the region. The company aims for volume growth targeting 390-400 MT in FY24 and 500 MT in FY25. The recent surge in stock price reflects investor confidence in Adani Ports strategic direction.

Reports suggest a divergence in valuations, with the enterprise value of Gopalpur Port estimated at $600-650 million or ₹5,000 crore and SP Group's equity value at $240-260 million or ₹2,000 crore. The port's long term bank facilities stood at ₹1,432 crore as of February 2023 as per the credit rating agency Care Edge.

Karan Adani, Managing Director at Adani Ports highlighted that acquiring Gopalpur Port will enhance Adani Group's nationwide port network and balance cargo volumes between the east and west coasts. Additionally, it will strengthen APSEZ's integrated logistics approach. Gopalpur Port handles various dry bulk cargoes like alumina, coal, ilmenite, iron ore and limestone.

To Summarize

The acquisition of Gopalpur Port strengthens Adani Ports integrated logistics approach and enhances its pan India port network. With its strategic location, diverse cargo handling capabilities and growth potential Gopalpur Port emerges as a key asset for Adani Ports expansion along the eastern coast of India.