Adani Ports and Special Economic Zone Limited is now in better size than a decade ago, when it acquired the Abbot Point Port Terminal on a 99 -year lease from the Government of Queensland in FY12. But Adani had to sell it to the Promoter Group in 2013 to improve its net debt-to-equity ratio, which was more than 3.41x at the end of FY 12.
Last week, the Adani Ports announced the acquisition of the Abbot Point Holdings PTE Limited from the Promoter Group in the respective-party transactions, with its target to achieve 1,000 MTPA (million tonnes per year) cargo handling capacity, including 150 MTPAs of international capacity by 2030.
Analysts of Jefferies India said that a strong balance sheet now enables acquisition. The balance sheet is now strong (0.6X net debt-from-equity fY25 estimate), and FY25-30 (estimates) can fund 1.4 trillion cash flows from over-operation 80,000 crore Capex added Jeffers to the April 21 report.
The Abbot Point operates the North Queenland Export Terminal (NQXT), a dedicated export terminal, which combines the resource-rich state of Queensland with consumption centers in South Asia.
Balance-sheet boost
According to the Kotak Institutional Equities, the acquisition will add about 7% to the Adani Ports Ebitda to a similar 7% additional equity stake sales. Ebitda is small for earning before interest, depreciation and refinement.
Adani Ports is targeting 15% compound annual growth rate (CAGR) in Ebitda from property over the next four years, aid by high pricing from existing contracts, for renewal after 15 -year agreement and new customers which are opening other than new mines.
NQxt’s FY25 revenue was $ 349 million and Ebitda margin was 65%. Its cargo handled in FY25 was 35 million tonnes, or about 8% of the throwup of Adani ports. Adani Ports will acquire some non-core assets conducted with almost identical liabilities by Abbot Port, which expects to settle after acquisition, without any influence on financial.
The port capacity is 50 MTPA, which can be increased to 120 MTPA. Of this, 80% are contracted under the long -term ‘tech or pay’ agreement, which increases the share of the ensured.
In a report on 20 April, Kotak analysts said, “The said transaction enhances the sticky tech or beverage trade part for apps in an AAA-lined economy and forms a better basis to rebuild the existing loans of APSEZs at potentially better rates.” The domestic capacity of Adani Port was at 633 MTPA at FY 25-A end, while the international capacity goes up to 80 MTPA after the acquisition, spread to four ports.
It is an all-equity deal at an $ 3.98 billion enterprise price 21,600 crores), including $ 0.8 billion loans and the promoter shareholding in the company will increase the current 65.9%to 2.1%. Acquisition implies that the 17x FY25 an enterprise value of the estimated Ebitda – the same assessment on which it was sold to the promoter group in 2013. It is similar to the evaluation of shares of Adani Ports that trade at the venture price of the estimated Ebitda 17.1x FY25 Bloomberg Unanimous.
Near period effects
In particular, the profit of earnings in the initial stage may be reduced due to the high asset base. “(We) Hopefully the acquisition ebitda would be positive, but due to high depreciation, the granular for net profit may be marginal in the near period,” said the Elarla Securities (India).
In addition, there are risks from the impact of American tariffs and uncertainties when China slowed down, which was 35% of the total tonne load of Mathadhish in FY 25. In addition, the company’s ability to secure high prices during contract renewal is important to improve the profit from this acquisition.
