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.
After submission:
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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.
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GPL is debt free with over 500 rupees in cash.
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Adani Ports is purchasing approximately 16.3 crore shares at Rs.120 each, which equates to Rs.1,954.
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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.
