Adani Group's APSEZ seals deal to acquire 95% stake in Gopalpur Port for Rs 3,080 crore
Adani Ports and Special Economic Zone Ltd (APSEZ) has finalized an agreement to acquire majority stakes in Gopalpur Port Limited (GPL), marking a significant move in India's port and logistics sector. The acquisition, valued at Rs 3,080 crore, involves purchasing a 56% stake from the Shapoorji Pallonji Group and 39% from Orissa Stevedores Limited (OSL).
FollowAdani Ports and Special Economic Zone Ltd (APSEZ), India’s leading ports and logistics conglomerate, has inked a definitive agreement to acquire a significant portion of the Shapoorji Pallonji Group and Orissa Stevedores Limited (OSL) shares in Gopalpur Port Limited (GPL). The acquisition, valued at Rs 3,080 crore, includes the purchase of a 56% stake from the Shapoorji Pallonji Group and 39% from OSL. However, the completion of the transaction is contingent upon obtaining statutory approvals and meeting other prerequisites.
Karan Adani, the Managing Director of APSEZ, expressed enthusiasm about the acquisition, stating that it would enable the company to provide more integrated solutions to its clientele. He highlighted GPL's strategic location on the east coast of India, offering unparalleled access to the mining hubs of Odisha and neighbouring states, which would facilitate the expansion of APSEZ's hinterland logistics footprint. Adani also emphasized that GPL would enhance the Adani Group's nationwide port network, significantly bolster overall cargo volumes, and reinforce APSEZ's integrated logistics strategy.
Gopalpur Port: Key Highlights
Situated on the east coast, Gopalpur Port boasts a handling capacity of 20 million metric tonnes per annum (MMTPA). Awarded a 30-year concession by the Government of Odisha in 2006, with provisions for two 10-year extensions, GPL serves as a deep draft, multi-cargo port catering to various dry bulk commodities, including iron ore, coal, limestone, ilmenite, and alumina. The port plays a pivotal role in supporting the growth of mineral-based industries in its hinterland, such as iron & steel and alumina production.
Under the concession agreement, GPL enjoys flexibility in designing and expanding its infrastructure according to market demand. The port has secured over 500 acres of leased land for development, with the option for additional land acquisition to accommodate future capacity expansions. It is well-connected to its hinterland via National Highway NH16 and a dedicated railway line linking it to the Chennai-Howrah main line.
In addition to the upfront enterprise value, the acquisition includes a contingent consideration of Rs 270 crores, payable after 5.5 years, subject to certain conditions agreed upon with the sellers.
Future Growth Prospects
Estimations for the Financial Year 2024 project significant growth for GPL, with cargo handling expected to reach around 11.3 million metric tonnes (MMT), representing a year-on-year growth of 52%. Similarly, revenue is forecasted to soar to INR 520 crore, with an anticipated year-on-year growth of 39%, while EBITDA is expected to reach INR 232 crore, reflecting a year-on-year growth of 65%. The port is poised for robust growth and margin expansion in FY’25, with identified opportunities for operational efficiencies and infrastructural enhancements, which will further enhance shareholder value for APSEZ.
APSEZ's Expanding Portfolio
With this acquisition, APSEZ continues to solidify its position as India’s largest port developer and operator, transforming into an Integrated Transport Utility offering end-to-end solutions. The company boasts a portfolio of seven strategically located ports and terminals on the west coast and an equal number on the east coast of India. These facilities represent 27% of the nation's total port volumes, enabling APSEZ to handle vast amounts of cargo from both coastal regions and hinterlands. Moreover, APSEZ is also involved in developing a transhipment port in Colombo, Sri Lanka, and operates the Haifa Port in Israel.
