Adani Ports and Special Economic Zone (APSEZ), a subsidiary of the Adani Group and India’s largest privately built and operated ports developer , has acquired a 95% stake in Gopalpur Port situated in the eastern Indian state of Odisha, 3,350 crores. As a result of this rationale move, APSEZ will be able to explore the possibility of a non seasonal deep water port, which is now in a state of rapid growth. By digging deeper into the factors which contributed to the completion of this remarkable agreement and the implications involved for the companies.
Located in the region of Ganjam and district Maratik in Odisha, 260 kilometres south of Bhubaneswar, the capital city of Odisha the Gopalpur Port is situated. This is the only major port in the whole east coast between Paradeep and Visakhapatnam that is used in handling vessels with drafts of up to 13 metres. The port is the main hub for the transportation of thermal coal and iron ore cargoes. However, it is planned to be converted into a multi-cargo terminal by virtue. It depends on a master plan, so the capacity for its speed of processing is 50 million tonnes annually. Furthermore, contingent on the available cargo at hand, the movement is currently standing at approximately 4 million tonnes.
APSEZ will acquire 74% stake from Dhamra Port Company Limited (DPCL), a subsidiary of Larsen & Toubro, and the remaining 21% from others through an open offer process. Post acquisition, Gopalpur Port will be developed as a multi-cargo port with an increased capacity of 100 million tonnes per annum. APSEZ aims to leverage its expertise and experience in port management to boost efficiency and cargo volumes at Gopalpur. It will also develop rail and road evacuation infrastructure to ensure seamless cargo movement.
This deal is a win-win for both companies. For APSEZ, it provides an opportunity to strengthen its leadership position in the port sector with a strategic footprint on Odisha coast. Odisha is a key mineral hub and this acquisition will help APSEZ tap growing coal and iron ore trade from the state. With a master plan ready and potential for capacity expansion, Gopalpur Port fits well into APSEZ’s portfolio of ports with growth capabilities. For the sellers, it ensures the port assets are developed to their full potential under the guidance of a port sector leader.
The acquisition values Gopalpur Port at an enterprise value of Rs. 3,350 crores, which analysts say is reasonable considering its land reserves and future growth prospects post development. For APSEZ shareholders, the acquisition is value accretive and boosts capacity addition at a competitive capital cost. It will also add to the company’s consolidated revenue and EBIDTA in coming years. This reflects APSEZ’s focus on pursuing value accretive acquisitions to drive sustainable growth.
In conclusion, the acquisition of a majority stake in Gopalpur Port is a strategic investment for APSEZ to expand its footprint on the east coast of India. Leveraging its expertise and resources, APSEZ aims to develop Gopalpur into a world-class port and help realize its true potential. This will also aid Odisha’s industrial development goals. The deal demonstrates APSEZ’s ability to identify assets with strong growth potential and create long term shareholder value through its expansion strategies.
