Adani Ports and Special Economic Zone (APSEZ), India’s leading maritime company by market capitalisation, is in advanced negotiations to acquire Shapoorji Pallonji Group’s (SP) Gopalpur Ports in Odisha, as per an Economic Times report. The potential deal, estimated at ₹1,100-1,200 crore in equity value, aligns with Adani Port’s strategic expansion plans along both the eastern and western maritime borders.
Acquisition Strategy
The proposed acquisition marks a strategic move for Adani Ports, potentially becoming their sixth multi-purpose facility on the eastern coast. With an existing capacity of around 247 million tonnes (MT), this acquisition would further solidify their presence in this region. Presently, SP Ports Maintenance holds a majority stake of 56% in Gopalpur Ports, with the remaining ownership by Orissa Stevedores (OSL). However, uncertainties loom over the finalization of the negotiations.
Reports suggest a divergence in valuations, with JSW Infrastructure previously in talks with the Mistry family for the same asset at a higher enterprise valuation of ₹3,000 crore. The enterprise value of Gopalpur Port stands at $600-650 million ( ₹5,000 crore), with SP Group’s equity value estimated at $240-260 million ( ₹2,000 crore), as per the report. Care Edge, a credit rating firm, states the port’s long-term bank facilities stand at ₹1,432 crore as of February 2023.
Strategic Importance of Gopalpur Port
Gopalpur Port, operational since 2015, caters primarily to the steel industry and is strategically located along the Bay of Bengal between Paradip Port and Vizag Port. Its connectivity to the Golden Quadrilateral via NH-516 and railway sidings makes it a pivotal facility for cargo handling. The port’s flexibility in charging market rates without TAMP regulations allows for additional value-added services.
Adani Ports witnessed a significant year-on-year rise in cargo volumes, recording 101.2 MT in the second quarter, with container volumes increasing by 24 percent. The company maintained its volume growth guidance for FY24 and FY25, aiming for 390-400 MT and 500 MT, respectively. The recent surge in its stock price following positive brokerage outlooks is indicative of investor confidence in the company’s strategic trajectory.
