India’s Adani Ports and Special Economic Zone has bought the port of Dhamra in a deal worth 55 billion rupees ($930 million) including debt, as the company looks to handle more coal and iron ore shipments mined in India’s east.
Adani Ports, part of billionaire Gautum Adani’s conglomerate, is paying Tata Steel Ltd & L&T Infrastructure Development Projects Ltd in cash for the Dhamra Port Company Ltd, the company’s Managing director Sudipta Bhattacharya told reporters on a media call on Friday.
Bhattacharya declined to comment on the equity value of the deal, but an official at one of the sellers who did not want to be named because the details are not public said the equity was valued at between 20 billion and 22 billion rupees.
Adani has grown into one of the largest port owners in India thanks to its Mundra plant in the west of the country, where more than 100 million tons of cargo are processed each year.
Bhattacharya said Adani planned to expand the amount of cargo handled at Dhamra to 100 million tonnes by 2020 from a current 14.3 million tons.
Based in the state of Odisha, Dhamra currently handles resources including iron ore and steel from mineral-rich states in India’s east, and has environmental clearance for the development of 12 additional berths to add to its existing two
“The hinterland is growing quickly,” Bhattacharya said, referring to India’s eastern region. “We intend to replicate what we did with Mundra.”
Adani has an agreement with Tata Steel under which the latter will send at least 5 million tons of cargo annually through Dhamra for the next 15 years, Bhattacharya said.
Adani Port shares closed up 2 percent on Friday, while Adani Enterprises (ADEL.NS) - the flagship Adani group company - rose 5.8 percent.
Shares in the Adani companies have rallied sharply this year on what traders say are bets the firm will perform well under a government led by Narendra Modi, who on Friday looked set to become India’s next prime minister after his party won a landslide victory in national elections.
Adani’s rapid ascent to the top tier of Indian business is often associated with the fortunes of Narendra Modi.
As the chief minister of Gujarat - the state where Adani is based - Modi has emphasized the sort of infrastructure-led development that has benefited Adani. (Reuters)