Adani Port likely to acquire 72% stake in Krishnapatnam Port soon
Karan Adani has been on the record saying that by 2020 they have a target of reaching 400 million tonne of cargo capacity, which will be possible post this acquisition.
What could potentially be the first mergers and acquisitions (M&A) deal of 2020, Adani Ports is looking to acquire 72 percent stake in Krishnapatnam Port from existing investor CVR Group, says CNBC-TV18 quoting sources. and The deal is likely to get announced very soon.
They will likely acquire 72 percent stake from the existing investors at an enterprise value of close to Rs 12,500 crore, which means that would be paying close to 10 times EV/EBITDA on the FY20 earnings of Krishnapatnam Port.
Adani Port itself is trading at close to 14-15 times EV/EBITDA for current year and therefore it would be earnings per share (EPS) accretive from day one.
Post this acquisition, Adani Port will have a further foothold into the east coast and will manage close to one-third of the port volumes in India. Moreover, Adani Port will probably become one of the largest port handling companies in the world and that is a target Adani has been eyeing.
Karan Adani has been on the record saying that by 2020 they have a target of reaching 400 million tonne of cargo capacity, which will be possible post this acquisition.
However, officially Adani Port has declined to comment on this.
Krishnapatnam Port is the second largest private port in India after Mundra Port and they currently manage close to 50 million tonne of cargo. Adani Port manages close to 250-275 million tonne and with this acquisition, Adani Port will manage close to 350 million tonne of cargo going into 2020.
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