GIC part-exits seven-year-old investment in Adani Ports & SEZ for close to $51M

Singapore’s sovereign wealth fund GIC has sold over half of its stake in Adani Ports & Special Economic Zone Ltd, India's largest private port and special economic zone operator, for Rs 290 crore ($50.8 million) through a secondary market transaction.

GIC had co-invested with private equity firm 3i through optionally convertible bonds back in 2006 which on conversion gave both the investors around 1.7 per cent stake after the company went public in November 2007. While 3i had sold its stake in the firm way back in 2009, GIC has been holding on to its stake.

It held 1.7 per cent as of March 31, 2013 and has sold around 0.9 per cent of it. Its remaining stake is worth around Rs 250 crore. The firm had reportedly invested around $50 million in 2006; this would mean it has part-exited almost with 2x from its seven-year-old investment.

Originally incorporated as Gujarat Adani Port Ltd (GAPL) in 1998 to develop a private port at Mundra, on the west coast of India, the company commenced commercial operations in October 2001. Mundra Special Economic Zone Ltd (MSEZL) was incorporated in November 2003, to set up an SEZ at Mundra and was merged with GAPL in April 2006 and the company was renamed as Mundra Port and Special Economic Zone Ltd. Its name was changed again to Adani Ports & Special Economic Zone in January 2012.

The firm had struck a big deal a couple of years ago by snapping Abbot Point Port in Australia in an all-cash deal for A$1.8 billion (around $2 billion or Rs 9,000 crore approximately at that time). The balance sheet size of the firm more than doubled after the acquisition. However, early this year, the firm had decided to sell this unit to its own promoters, the Adani family, as it wanted to focus on its Indian operations.

The firm is raising Rs 1,000 crore through a public issue which will also help the promoters meet the minimum public shareholding norms of 25 per cent. As of March 2013, the public shareholders held 22.5 per cent. Adani Ports is one of the firms which has figured among a little over 100 listed companies where SEBI has put certain restrictions on the voting rights of promoters for failing to meet the listing norms as per deadline.

The company ended FY13 with revenues of Rs 3,576 crore with a net profit of Rs 1,623 crore. Its revenues grew around 3x and net profit shot up 4x since FY09.

(Edited by Joby Puthuparampil Johnson)

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