Adani Ports and Special Economic Zone (APSEZ) is to acquire a 75% stake in the multi-purpose Krishnapatham Port (KPCL), which is the second largest private sector port in India after Mundra.
KPCL, which is located in the southern part of Andhra Pradesh state, handled 54m tonnes of cargo in the 2019 fiscal year and APSEZ hopes to increase the annual handling total to 100m tonnes in seven years.
The operator believes that the acquisition, which is worth US$1.9bn, will help it on its way to handling 400m tonnes across its portfolio by 2025.
Karan Adani, CEO of APSEZ said: “KPCL is a crown jewel to join APSEZ’s string of pearls, our network of ten economic gateways to India and this acquisition would accelerate our stride towards FY2025 vision of handling 400m tonnes of cargo.
“Given the best-in-class infrastructure and the distinct hinterland catered by KPCL, this acquisition will not just increase our market share to 27% but also add remarkable value to our pan-India footprint. With the experience of successfully turning around acquisitions of Dhamra and Kattupalli ports, we are confident of harnessing the potential of KPCL and improve returns to stakeholders.”
Adani added that APSEZ will target to double its EBIDTA in around four years through its process improvements and industry best practices.
The transaction, which is subject to regulatory approvals and expected to be completed in 120 days, adds to a busy period for the port operator which widened its logistics presence at the end of last year.
In December 2019, Adani Logistics, part of APSEZ, agreed to purchase a 40.25% stake in Snowman Logistics, a specialist cold chain logistics company with over 30% of capacity among integrated organised cold chain service providers in India.
Adani stated: “The acquisition is in line with our strategy and vision to be a leader in providing integrated logistics services in India and moving from port gate to customer gate. Cold chain is a key product in customer gate strategy given India’s consumer driven demand.
“We will double the capacity in next five years. With focus on increase in utilisation, higher realisation from product mix and operational efficiencies, this vertical will help further improve returns of logistics business.”