Adani Ports and Special Economic Zone Ltd (APSEZ) has completed the acquisition of Karaikal Port Private Limited (KPPL) for Rs1,485 crores under Indian bankruptcy law after a Chennai court approved its resolution plan for the stressed Puducherry port.
The acquisition price implies an enterprise value/EBITDA multiple of approximately 8 times estimated FY23 figures, APSEZ said in a statement.
APSEZ will spend further Rs850 crores on upgrading infrastructure to reduce logistic costs for customers.
“We intend to double the port’s capacity over the next 5 years and also add a container terminal to make it a multipurpose port,” said Karan Adani, CEO and full-time director of APSEZ.
The deal helps APSEZ expand its network of ports and terminals to 14 on the east and west coasts.
By 2026, the port operator wants to handle 500 tons of cargo and by 2030 it will become the world’s largest port operator and India’s largest transport company.
“The acquisition of Karaikal Port is another milestone in solidifying our position as India’s largest transport company,” added Karan Adani.
In the 2023 financial year, around 10 million tons (mt) of cargo were handled in the port of Karaikal.
Karaikal Port Pvt Ltd operates the Karaikal All Weather Port developed in BOT (Build, Operate and Transfer) format under Public Private Partnership (PPP) mode with a 30 year concession awarded in 2006 by the Puducherry Government . The port started operations in June 2009.
Located between the major ports of Chennai and Tuticorin, Karaikal’s strategic location allows the port easy access to the industrially rich hinterland of central Tamil Nadu.
Karaikal Port is the second port acquired by APSEZ under the Insolvency and Bankruptcy Act (IBC) after Dighi Port in Maharashtra.
The port has a water depth of 14 meters and a land area of over 600 hectares. The existing infrastructure includes 5 operational berths, 3 railway sidings, a mechanized bulk handling system including mechanized wagon and truck loading systems, 2 mobile harbor cranes and a large cargo storage area with open dockyards, 10 covered storage areas and 4 tank liquid storage areas.
With a handling capacity of 21.5 million tons (mt), the port mainly handles coal, cement, fertilizer, limestone, steel and liquids.
Chennai Petroleum Corporation Ltd’s (CPCL) forthcoming 9-meter oil refinery in Nagapattinam in Tamil Nadu will provide the Karaikal Port with an opportunity to handle an additional large volume of liquid cargo, APSEZ said.