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India’s largest private sector port operator Adani Ports and Special Economic Zone Ltd (APSEZ) has announced its acquisition of the Gopalpur Port in Odisha from the Shapoorji Pallonji Group (SP Group) and Orissa Stevedores Ltd (OSL) at an enterprise value of Rs 3,080 crore.
The acquisition is the latest in a string of port acquisitions by APSEZ over the past decade and adds to its dominance in non-major ports—those not owned and operated by the Central government. For the debt-laden SP Group, the Gopalpur Port’s sale is in line with its strategy to pare debt by divesting non-core assets.
Gopalpur Port is the seventh Indian port to have been acquired by the Adani Group through the inorganic route since 2014. The others include Dhamra Port, Kattupalli Port, Krishnapatnam Port, Dighi Port, Gangavaram Port, and Karaikal Port.
Prior to Monday’s announcement, APSEZ already had a footprint of 14 strategically located ports and terminals along India’s coastline—seven each on the country’s west and east coasts—making it India’s largest port operator and developer handling over a quarter of all cargo passing through the country’s ports. In non-major ports, APSEZ’s market share in terms of cargo handled is over 50 per cent.
As per the agreement inked between the three parties, APSEZ will acquire SP Group’s 56 per cent stake and OSL’s 39 per cent stake in Gopalpur Port Ltd (GPL), subject to a few statutory approvals and the fulfilment of some other conditions. Gopalpur Port’s cargo handling capacity stands at 20 million tonnes per annum (mtpa). The Government of Odisha had awarded a 30-year concession to GPL in 2006, with the provision of two extensions of 10 years each.
“In addition to the enterprise value…there is a contingent consideration of INR 270 crores estimated to be payable after 5.5 years, subject to fulfilment of certain conditions as agreed with the sellers,” APSEZ said in a release. This would take the total value of the port to Rs 3,350 crore.
In 2017, the SP Group had acquired the then under-construction Gopalpur Port. After that, the SP Group commenced port operations by building port infrastructure and stabilising industrial relations. In addition to being a functional and growing port in terms of cargo volumes and revenue, the Gopalpur Port has recently signed up with Petronet LNG Ltd for setting up a greenfield liquefied natural gas (LNG) regasification terminal, adding predictable long-term cash flows for the port.
In the financial year 2023-24 (FY24), GPL is estimated to handle about 11.3 million tonnes of cargo, a year-on-year growth of 52 per cent, and have a turnover of Rs 520 crore, up 39 per cent year-on-year. The port’s operating profit for FY24 is estimated to grow 65 per cent to Rs 232 crore.
In APSEZ’s view, the Gopalpur Port seems set for strong growth and margin expansion in FY25 with “opportunities already identified for achieving higher operational efficiencies and infra debottlenecking”.
As a deep draft, multi-cargo port, Gopalpur handles a mix of dry bulk cargo, including iron ore, coal, limestone, ilmenite, and alumina.
According to APSEZ, it will have the full flexibility to design and expand the port as per the market demand. GPL has received more than 500 acres of land on lease for development, with an option to receive additional land on lease to meet future capacity expansions.
“The acquisition of Gopalpur Port will allow us to deliver more integrated and enhanced solutions to our customers. Its location will allow us unprecedented access to the mining hubs of Odisha and neighboring states and allow us to expand our hinterland logistics footprint. GPL will add to the Adani Group’s pan-India port network, east coast vs west coast cargo volume parity and strengthen APSEZ’s integrated logistics approach,” APSEZ Managing Director Karan Adani was quoted as saying in the release.
Along India’s 5,422-km coastline, APSEZ has a presence every 500 km on an average, from just a blip on the country’s far western end 10 years ago. In 10 years, the total cargo handled by Adani ports jumped nearly four-fold to 337 million tonnes in FY23; its volumes grew at a compounded annual growth rate of 14 per cent against the industry’s 4 per cent.
Cargo handling data analysed by The Indian Express shows that the ports acquired over the last decade by the Adani Group account for over 35 per cent of the total cargo volumes handled by the company. In a report in October 2023, The Indian Express had highlighted the growing dominance of the Adani Group in India’s ports sector.
