The acquisition is valued at Rs 3,604 crore and subject to regulatory approvals. APSEZ had announced acquisition of Warburg Pincus's 31.5% stake in GPL on 3 March 2021 and together with this acquisition, APSEZ would have 89.6% stake in GPL.
GPL is located in the northern part of Andhra Pradesh next to Vizag Port. It is the second largest non-major port in Andhra Pradesh with a 64 MMT capacity established under concession from Government of Andhra Pradesh (GoAP) that extends till 2059. It is an all-weather, deep water, multipurpose port capable of handling fully laden super cape size vessels of up to 200,000 DWT.
Currently, GPL operates 9 berths and has free hold land of ~1,800 acres. With a master plan capacity for 250 MMTPA with 31 berths, GPL has sufficient headroom to support future growth. It handles a diverse mix of dry and bulk commodities including coal, iron ore, fertilizer, limestone, bauxite, sugar, alumina, and steel. GPL is the gateway port for a hinterland spread over 8 states across eastern, southern and central India.
In FY20, GPL had a cargo volume of 34.5 MMT, revenue of Rs 1,082 crore, EBITDA of Rs 634 crore (59% margin) and PAT of Rs 516 crore. GPL is debt free with a cash balance of over Rs 500 crore. The company has a paid up share capital of 51.7 crore share of which 58.1% is owned by DVS Raju and Family (promoter), 10.4% by Government of Andhra Pradesh and 31.5% by Warburg Pincus.
APSEZ announced acquisition of 31.5% stake of Warburg Pincus on 3 March 2021 for Rs 120 per share and shall acquire the DVS Raju stake of about 30 crore shares (58.1%) also at Rs 120 per share which works out to a consideration of Rs 3,604 crore. The transaction implies EV/EBITDA multiple of 8.9x and P/E multiple of 12.0x (based on FY20 figures) and is a value accretive transaction for APSEZ shareholders.
APSEZ, a part of globally diversified Adani Group, is the largest port developer and operator in India. On a consolidated basis, the company 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.