Adani Ports and Special Economic Zone (APSEZ) is acquiring 31.5 percent stake held by Windy Lakeside Investment (an affiliate of Warburg Pincus) in Gangavaram Port (GPL). The acquisition is valued at Rs 1,954 crore and subject to regulatory approvals.
APSEZ is acquiring the Warburg Pincus stake of 16.3 crore shares (31.5 percent) at Rs 120 per share which works out to a consideration of Rs 1,954 crore.
The transaction implies EV/EBITDA multiple of 8.9 x and P/E multiple of 12.0 x (based on FY20 figures). APSEZ is also in discussions with DVS Raju and Family for their 58.1 percent stake (30 crore shares) 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 64 million tonne established under concession from the government of Andhra Pradesh (GoAP), that extends till 2059.
It is an all-weather, deep water, multi-purpose port capable of handling fully laden super cape size vessels of up to 2,00,000 DWT.
Currently, GPL operates nine berths and has free hold land of 1,800 acre. With a master plan capacity for 250 million tpa with 31 berths, GPL has sufficient headroom to support future growth.
In FY20, GPL had a cargo volume of 34.5 million tonne, generated revenue of Rs 1,082 crore, EBITDA of Rs 634 crore (margin of 59 percent) and PAT of Rs 516 crore. GPL is debt-free with cash balance of over Rs 500 crore.
The company has a paid-up equity share capital of 51.7 crore shares of which 58.1 percent is owned by DVS Raju and Family (Promoter), 10.4 percent by the government of Andhra Pradesh and 31.5 percent by Warburg Pincus.