Adani Ports & Special Economic Zone: Anchored for growth

Adani Ports & Special Economic Zone: Anchored for growth

Shares of Adani Ports & Special Economic Zone (APSEZ) rallied nearly 4% to Rs 758.35 apiece on NSE as investors cheered the private sector port operator announced acquisition of stake in Gangavaram Port (GPL).
The latest acquisition is expected to bolster its presence further on the East Coast and balancing the West-East Portfolio.
The Gautam Adani led company has been on the acquisition spree. Recently it concluded acquisition of Krishnapatnam Port assets.

APSEZ has now announced acquisition of 31.5% stake from Warburg Pincus in GPL.
The acquisition is at a very-attractive valuation of 8.9x EV/EBITDA on FY20 basis, with an EV of Rs 5,600 crore. APSEZ also announced consolidation of the Rail assets of the group under its subsidiary under a scheme of arrangement between various group Companies namely Brahmi Tracks Management Services, Adani Tracks Management Services, Sarguja Rail Corridor. Company will be buying out (consolidating) Rail assets from promoter group company at Target valuations 11.5x FY22e EV/EBITDA and this will result in issuance of additional equity shares of 706 lakh shares at Rs 675.

The consolidation of the Rail assets is a share swap and not a cash deal comes as a relief. The company continue to consolidate its market leadership (30% share now) in the ports sector and would benefit the most from India’s increasing contribution to global trade.
The company has also scheduled a board meeting on 6th March to consider a proposed fund raising through an issuance of equity shares by way of a preferential issue.

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