Adani Ports and Special Economic Zones Ltd. agreed that Warburg Pincus would acquire a stake of 1,954 billion rupees in Gangavaram Port Ltd. to buy.
Windy Lakeside Investment, a subsidiary of the private equity firm, will sell its 31.5% in the port to the Adani Group, according to a listing on the stock exchange. The transaction is subject to regulatory approvals.
Adani Ports is also in talks with the organizers DVS Raju and Family about their 58.1% stake (approx. 30 Crore shares) in the port. The remaining 10.4% is held by the Andhra Pradesh government.
The port in the northern part of the state near Vizag has a capacity of 64 million tons. It was established under the concession of the state, which extends until 2059.
Gangavaram is an all-weather, multi-purpose, deep-water port that can accommodate fully loaded super-cape-sized ships with a deadweight capacity of up to 200,000 tons. It is a gateway to eight states in east, west, south and central India.
In FY 20, the port handled 34.5 million tons of cargo, had sales of Rs 1.082 billion, operating income of Rs. 634 billion, a margin of 59% and net income of Rs 516 billion.
GPL is debt free with over 500 rupees in cash.
Adani Ports is purchasing approximately 16.3 crore shares at Rs.120 each, which equates to Rs.1,954.
Based on the numbers for fiscal year 20, the transaction implies an 8.9-fold EV / Ebitda multiple and a 12-fold P / E multiple.