Adani Ports Acquires Odisha's Gopalpur Port From Shapoorji Group For Rs 3,080 Crore

Adani Group's Adani Ports and Special Economic Zone Ltd (APSEZ), one of India's largest ports and logistics firm, has entered into a definitive agreement to purchase 56 per cent stake of the Shapoorji Palloni (SP) Group and 39 per cent of Orissa Stevedores Limited (OSL) in Gopalpur Port Limited (GPL). The acquisition is made at an enterprise value of Rs 3,080 crore, and the transaction is subject to statutory approvals and fulfilment of other conditions precedents, as per company release.

Gopalpur port is located on the east coast of India and has the capacity to handle 20 MMTPA. The Odisha government 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. 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. GPL has received more than 500 acres 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 Rs 270 crores estimated to be payable after 5.5 years, subject to fulfilment of certain conditions as agreed with the sellers.

Karan Adani, managing director of APSEZ, said, "The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our 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-Indian port network, significantly enhance overall cargo volume, and strengthen APSEZ’s integrated logistics approach."

A spokesperson from Shapoorji Pallonji Group said, "The planned divestments of Gopalpur Port and Dharamtar Port, at a significant enterprise value, demonstrate our group's ability to turn-around assets and create stakeholder value in a relatively short period of time, capitalising our core strengths in project development and construction." The spokesperson also said, "These divestments are key milestones in our roadmap to reduce group debt and set the stage for growth, taking advantage of the macro trends for demand in our core businesses, both in India and overseas." The SP Group has been looking at several ways to reduce its debt, which has been reported to be around Rs 20,000 crore.

In FY24, GPL is estimated to handle about 11.3 MMT cargo (YoY growth – 52 per cent) and earn a revenue of Rs 520 crore (YoY growth – 39 per cent) and achieve EBITDA of Rs 232 crore (YoY growth – 65 per cent). The Gopalpur Port is all set for strong growth and margin expansion in FY25, with opportunities already identified for achieving higher operational efficiencies and infra debottlenecking, implying further value accretion for APSEZ shareholders.

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