Gautam Adani led Adani Ports and Special Economic Zone Ltd (APSEZ), India's largest private Ports & Logistics company, has acquired the residual 25% stake in Adani Krishnapatnam Port Ltd., for Rs 2,800 crores, enhancing its stake in Krishnapatnam Port to 100%.
With the 75% ownership acquired in October 2020, the acquisition implies an enterprise value of Rs 13,675 crore, indicating an EV/ FY21 EBITDA multiple of 10.3x.
Mr. Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ said, "The consolidation of our ownership in Krishnapatnam Port reinforces APSEZ's stride towards 500 MMT by 2025 and achieving our broader strategy of cargo parity between west and east coasts of India. Krishnapatnam Port is on track to handle double the traffic by 2025 and will deliver high growth through a multi-product and cargo enhancement strategy while enhancing return on capital employed."
Krishnapatnam Port, located on India's east coast in the Nellore district of Andhra Pradesh, is an all-weather, deep water port with a multi-cargo facility with a current 64 MMTPA.
With a waterfront of 20 km and 6,800 acres of land, Krishnapatnam Port has a master plan capacity of 300 MMTPA and a 50-year concession.
The port is expected to have volumes of 38 MMT, revenues of Rs. 1,840 crore and EBITDA of Rs. 1,325 crore in FY21. Since the acquisition, Krishnapatnam Port has focused on business process re-engineering, resulting in EBITDA margins improving from 57% in FY20 to 72% in FY21.
"We are confident that we will be able to double throughput and triple EBITDA at Krishnapatnam Port by 2025. We are committed to making Krishnapatnam Port the gateway port for South Andhra Pradesh and Karnataka. With its large industrial land backed with the port, we will transform Krishnapatnam into a manufacturing and industrial hub," Mr. Adani added.
APSEZ, the diversified Adani Group's flagship transportation arm, has evolved from a port company to Ports & Logistics Platform for India.
It is the largest port developer and operator in India with 12 strategically located ports and terminals — Mundra, Dahej, Tuna, and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam and Krishnapatnam in Andhra Pradesh, Dighi in Maharashtra and Kattupalli and Ennore in Chennai— represent 24% of the country's total port capacity, handling vast amounts of cargo from both coastal areas and the vast hinterland.
The company is also developing a transshipment port at Vizhinjam, Kerala.
APSEZ shares on BSE were down 1.52% at Rs 725.05 in a weak Mumbai market on Monday.