Adani Ports and Special Economic Zone (APSEZ) on Monday said it has completed the acquisition of Krishnapatnam Port Company Ltd (KPCL) for an enterprise value of Rs 12,000 crore.
The company acquired controlling stake of 75 per cent in India’s second largest private sector port and said the acquisition will accelerate handling of 500 million tonnes (MT) throughput by 2025.
With this acquisition, APSEZ is expecting its market share in FY21 to increase from 21 per cent to 25 per cent.
“APSEZ, India’s largest port developer, operator and the logistics arm of the Adani Group, today announced the completion of the acquisition of KPCL for an enterprise value of Rs 12,000 crore. This will result in APSEZ having a controlling stake of 75 per cent in KPCL from the CVR Group and other investors,” the company said in a statement.
KPCL is a multi-cargo facility port situated in the southern part of Andhra Pradesh, a state which has the second largest coastline in India.
The company said: “In FY21, the port is expected to generate an EBITDA of approximately Rs 1,200 crore, resulting in an acquisition EV/ EBITDA multiple of 10x”.
This acquisition will accelerate APSEZ’s stride towards 500 MMT (metric million tonnes) by 2025 and is another step in implementing APSEZ’s stated strategy of cargo parity between west and east coasts of India, it added.
Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ, said, “I am happy that KPCL, the second largest private port in India, has now become part of APSEZ portfolio. This transformational acquisition enables us to roll out world class customer service to an increased customer base and provide pan India solution to them.”
“Our experience of turning around acquisitions like Dhamra and Kattupalli ports will enable us in harnessing the potential of KPCL. We will target to enhance throughput at KPCL to 100 MMT by FY25 and double its EBIDTA by FY23,” he added.
With a vast waterfront and land availability of over 6,700 acres, KPCL is capable of replicating Mundra and would be future ready to handle 500 MMT, Adani said.
“We will replicate our operations and maintenance philosophy at KPCL, continue to focus on environment, reduce emission levels and have zero tolerance for fatalities and thus improve returns to stakeholders,” he said.
APSEZ, a part of globally diversified Adani Group, is the largest port developer and operator in India with a formidable presence in port infrastructure and logistics services.
APSEZ’s 11 strategically located ports and terminals represent 24 per cent of the country’s total port capacity, handling vast amounts of cargo from both coastal areas and the vast hinterland.
The company is also developing a transhipment port at Vizhinjam, Kerala and a container Terminal at Myanmar.