The Jaganmohan Reddy led- Andhra Pradesh state cabinet has approved the Krishnapatnam port deal, paving the way for Adani Ports and Special Economic Zone Ltd (APSEZ) to conclude the process of acquiring a 75 percent controlling stake in Krishnapatnam Port Company Ltd (KPCL) for an enterprise value of 13,572 crores, as reported by Hindu Business Line. The company has bought a 75 percent majority share in what is considered to be India’s second-largest private port and also further informed that the takeover would facilitate the handling of 500 million tons output by the year 2025. The Krishnapatnam port which is located in the Nellore district of Andhra Pradesh is a private deep-water all-weather port. It lies 18 km ease of Nellore. The port is currently owned and managed by the CKCPL. KPCL is 90.6 percent of shares are owned by the CVR Group, which has interests in construction, ports, electricity, steel, information technology, and exports. With this takeover, APSEZ expects to raise its market share in the financial year of 2021 from 21 to 25 percent. APSEZ, India’s largest port producer, operator, and logistics arm of the Adani Group today announced the completion of the acquisition of KPCL for an enterprise value of Rs 12,000 crore. This will result in APSEZ getting a 75 percent controlling interest in KPCL from the CVR Group and other investors,” the company said in a statement. The company has also reported that the port is expected to produce EBITA Rs.1200 Crores approx and the outcome would be the takeover of EV/EBITDA multiple of 10x.
Karan Adani, CEO, and Director of APSEZ, said I am pleased that KPCL, India’s second-largest private port, has now become part of the APSEZ portfolio. This impactful takeover enables us to carry out world-class customer support to an expanded customer base and provide a pan-India solution.” He further added, “Our experience of turning around acquisitions such as the ports of Dhamra and Kattupalli will allow us to leverage the potential of KPCL. We will aim to increase the throughput at KPCL to 100 million tons by financial year 25 and double its Ebidta by financial year 23.
As of now, APSEZ owns 11 ports and terminals all over India- Mundra, Dahej, Kandla, and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa, Visakhapatnam in Andhra Pradesh, and Kattupalli and Ennore in Tamil Nadu which represent 24% of the country’s total port capacity. A transshipment port is also under progress at Vizhinjam in the state of Kerala and also a container dock in Myanmar. APSEZ, which is a part of the multinational conglomerate company Adani Group, is the largest port developer and operator in India with a strong presence in port infrastructure and logistics services. As of now, the Adani Group is said to be eager to expand it’s port and container terminal network operations across South East Asia and is leading the race to build Colombo’s abandoned East Container Terminal at Colombo Port, which would be the second overseas venture for India’s largest private port operator.