MUMBAI: Adani Ports and Special Economic Zone Ltd, India’s biggest private port operator, is looking to complete its “string of pearls” ports strategy by plugging gaps that remain in a few coastal states. In addition, the company is also eyeing overseas acquisitions.
The company, part of billionaire Gautam Adani-led infrastructure conglomerate Adani Group, is actively looking at acquisitions, two company executives said, adding that chief executive officer Karan Adani is leading the drive. Karan is Gautam Adani’s son and took charge of Adani Ports on 1 January.
In India, the company is looking to expand its presence in Maharashtra and West Bengal. In overseas markets, the company is scouting for port opportunities in Sri Lanka, Bangladesh, the US and Europe, apart from the ports planned in Australia. “The overall objective is to make the group a trans-shipment port company,” one of the executives cited above said on condition of anonymity.
Adani Ports has plans to turn India’s biggest commercial port at Mundra in Gujarat into a regional trans-shipment hub by partnering with Terminal Investment Ltd SA, a container terminal operating company majority-owned by Geneva-based Mediterranean Shipping Co. SA, the world’s second biggest container shipping line.
It is also developing a trans-shipment port in Kerala. “The idea is to model Adani Ports on the lines of international port operating firms AP Moller of Denmark and DP World of Dubai,” a second executive said, also on condition of anonymity. “The entire port play will be supported by logistics, infrastructure and cargo support from group companies,” he said.
“Adani Ports is very aggressive in acquisitions and consolidations in the Indian maritime market as it is looking at better bargaining power with its shipping lines and other vendors,” said Mathew Antony, managing partner at Aditya Consulting, a boutique legal and business advisory firm specialising in shipping and ports.
Some of the company’s key acquisitions so far include Vizhinjam port in Kerala and Dhamra port in Odisha. In addition, the company has won the bid for a container terminal at Ennore port in Tamil Nadu. It also has a joint venture with shipper CMA CGM group of France for developing a terminal at Mundra.
To be sure, in achieving its large-scale ambitions, Adani Ports will encounter financial hurdles. “The firm’s debt is very high and it is essential to generate more revenue to service the same,” Antony said.
As of September 2015, the consolidated debt of Adani Ports stood at Rs.17,186.43 crore. The company’s net sales is seen rising to Rs.8,093.2 crore by 2016-17, up 32% from Rs.6,152.0 crore in 2014-15, according to a report from Emkay Research in December.
