Adani Enterprises is merging certain privately held promoter group firms that own majority stake in Mundra Port & SEZ Ltd with itself. This will make Mundra Port & SEZ-- a company backed by Singapore’s sovereign fund GIC-- a subsidiary of Adani Enterprises thereby making the latter the key group holding company of the Adanis.
Post the amalgamation of the promoter group entities, Adani Enterprises will own as much as 77.49% in Mundra Port & SEZ. This stake is valued at Rs 24,840 crore(~$5.3 billion). The promoter group firms will be issued fresh shares of Adani Enterprises that will push up promoters' holding in the firm to around 86%, as per VCCircle estimates. Adani Enterprises' latest market cap is pegged at Rs 39,152 crore (~$8.4 billion).
Although this is an intra group transaction, it marks yet another multi-billion dollar transaction involving Adani Enterprises this month. Early August the firm announced a deal that it was acquiring Australian coal asset from Linc energy for $2.7 billion.
Adani Enterprises already is the majority stakeholder of various group firms including 3i-backed Adani Power and Adani Global Pte (Singapore based firm that owns coal operations in Indonesia).
With this move, Adani Enterprises will be able to consolidate Mundra Port & SEZ’s accounts with itself thereby also bringing Adani Logistics under its fold that is currently a subsidiary of Mundra Port & SEZ.
Although Mundra Port & SEZ will account for just less than a tenth of consolidated revenues Adani Enterprises, it will be a significant earnings contributor as it has high net margins.
This in a way completes consolidation of various group firms under a single holding entity for the Adanis. This is similar to other listed holding companies such as Vedanta that is listed on the London Stock Exchange and is the group holding firm for Anil Agarwal’s Sterlite besides other businesses.