Adani Ports and Special Economic Zone (APSEZ) has said it will acquire the 58.1% stake held in Gangavaram Port by the DVS Raju family for Rs 3,604 crore (around $498 million).
The move will see APSEZ take its stake to 89.6%, it said in a statement. The remaining 10.4% is held by the Andhra Pradesh government.
The announced acquisition is the latest development involving Gangavaram Port. At the beginning of this month, APSEZ said that it would buy out New York-based private equity firm Warburg Pincus from the port.
Then, APSEZ added it was also in discussions to buy DVS Raju & Family’s 58.1% stake in the port.
Later on, Warburg Pincus said that it would invest Rs 800 crore (about $110 million) for a 0.49% stake in APSEZ.
Gangavaram Port handles a mix of dry and bulk commodities including coal, iron ore, fertilisers, limestone bauxite, and sugar. It is a gateway port for a hinterland spread over eight states which operates nine berths and has freehold land of around 1,800 acres.
The port has a master plan capacity of 250 million tonnes per annum with 31 berths.
As per APSEZ, Gangavaram Ports recorded revenues and net profits of Rs 1,082 crore and Rs 516 crore, respectively, for 2019-20. The operator is debt-free and has a cash balance of over Rs 500 crore.
With the actualisation of the deal, APSEZ will have two ports in Andhra Pradesh – Gangavaram and Krishnapatnam. Shares of the company were trading 2.66% up at Rs 740.8 apiece at the time of writing this report.
It recorded consolidated net sales and post-tax profits of Rs 11,873 crore and Rs 3,784 crore, respectively, for the 2019-20 fiscal.