APSEZ announced the acquisition of the residual 25% stake in Adani Krishnapatnam Port for Rs 2,800 crore from Vishwa Samudra Holdings. Together with the 75% ownership acquired in October 2020, the acquisition implies an enterprise value of Rs 13,675 cr implying an EV/ FY21 EBITDA multiple of 10.3x.
Krishnapatnam Port being India's second largest private sector port has a strong growth potential with a masterplan capacity of 300 MMTPA. The investment is in line with company's strategy to increase its footprint in Andhra Pradesh.
Krishnapatnam Port is engaged in the business of handling containers, coal, break bulk and other bulk cargo including liquid cargo. Krishnapatnam Port is an all-weather, deep water port has multi-cargo facility with a current capacity of 64 MMTPA (million metric tonnes per annum). With a waterfront of 20 km and 6,800 acres of land, Krishnapatnam Port has a master plan capacity of 300 MMTPA and a 50-year concession.
The port is expected to have volumes of 38 MMT (million metric tonnes), revenues of Rs 1,840 crore and EBITDA of Rs 1,325 crore in FY21. Since the acquisition, Krishnapatnam Port has focused on business process re-engineering which has resulted in EBITDA margins improving from 57% in FY20 to 72% in FY21. The announcement was made before market hours today, 5 April 2021.
Karan Adani, chief executive officer and whole time director of APSEZ said, "The consolidation of our ownership in Krishnapatnam Port reinforces APSEZ's stride towards 500 MMT by 2025 and achieving our broader strategy of cargo parity between west and east coasts of India. Krishnapatnam Port is on track to handle double the traffic by 2025 and will deliver high growth through a multi-product and cargo enhancement strategy while enhancing return on capital employed. We are confident that we will be able to double throughput and triple EBITDA at Krishnapatnam Port by 2025. We are committed to making Krishnapatnam Port the gateway port for South Andhra Pradesh and Karnataka. With its large industrial land backed with the port we will transform Krishnapatnam into a manufacturing and industrial hub."
On a consolidated basis, APSEZ posted a 16.23% increase in net profit to Rs 1576.53 crore on 11.59% rise in total income to Rs 4274.49 crore in Q3 FY21 over Q3 FY20.
Shares of APSEZ slipped 1.47% to Rs 725.45 on BSE. APSEZ, a part of globally diversified Adani Group, is the largest port developer and operator in India.