Andhra Pradesh: Adani’s Acquisition Of Gangavaram Port Hits Roadblock As Existing Promoter Wants Deal In Cash

The DVS Raju family, promoters of Gangavaram Port Ltd who own a 58.1 percent stake in the port are renegotiating their sale of the port to Adani Ports and Special Economic Zone Ltd (APSEZ) to include a cash component.

APSEZ, India’s largest private port and logistics company, in March acquired 58.1 per cent stakes at a cost of Rs 3,604 crore. Previously held by DVS Raju and family, APSEZ has also previously acquired a 31.5 per cent stake from Warburg Pincus on 3 March 2021, and now owns 89.6 per cent of all stakes in Gangavaram port.

The deal with the Raju family was a share swap with six shares of Gangavaram were to be exchanged for one share of Adani Ports.

Now, however, the Raju family is concerned that Adani Ports’ valuation will be hit as S&P Dow Jones Indices removed the stock from its sustainability index and some Scandinavian investors sold their holdings citing ESG (environment, social and corporate governance) concerns.

Thus, DVS Raju family wants half the sale consideration – Rs 1,800 crore - in cash, a source told Moneycontrol.

Gangavaram Port is the second largest non-major port in Andhra Pradesh after Vizag port, with a capacity of 64 MMT (million metric tonnes). It is located in the northern part of Andhra Pradesh.

The port was also established under a concession from the Government of Andhra Pradesh, which extends till 2059. The port operates at nine berths, and free-hold land of 1,800 acres with a master plan capacity of up to 250 MMT, with sufficient headroom for growth.