Shares of Adani Ports and Special Economic Zone, (APSEZ), surged 4% after the company announced that it is going to acquire 31.5% stake held by Windy Lakeside Investment (an affiliate of Warburg Pincus) in Gangavaram Port (GPL). The acquisition is valued at Rs.19,540 million and subject to regulatory approvals. 

The Company has a paid up equity share capital of 517 million shares of which 58.1% is owned by DVS Raju and Family (Promoter), 10.4% by Government of Andhra Pradesh and 31.5% by Warburg Pincus.

APSEZ is acquiring the Warburg Pincus stake of 163 million shares (31.5%) at Rs 120/share which works out to a consideration of Rs 19,540 million. The transaction implies EV/EBITDA multiple of 8.9x and P/E multiple of 12.0x (based on FY20 figures). APSEZ is also in discussions with DVS Raju & Family for their 58.1% stake (300 million shares) in GPL.

In FY20, GPL had a cargo volume of 34.5 MMT, generated revenue of Rs 10,820 million, EBITDA of Rs 6,340 million (margin of 59%) and PAT of Rs 5,160 million. GPL is debt free with cash balance of over Rs 5000 million.

Karan Adani, CEO and Whole Time Director of APSEZ said, "We believe that GPL holds great potential to complement its bulk cargo terminals with new cargo catagories that we intend to develop. The port provides us great access to an adjacent hinterland that was largely untapped by APSEZ thereby placing us in a position to serve a broader set of port customers as well as expand our overall hinterland logistics footprint for a much larger base of customers. We are grateful to the leaders of the AP Government for their support and are committed to doing our part to support their vision of accelerating the industrialization of AP."

Shares of Adani Ports and Special Economic Zone  are trading at Rs 758.50, up Rs 28.95, or 3.97%  at the Bombay Stock Exchange (BSE) on Thursday at 1:13 p.m.

The scrip has touched an intra-day high of Rs 765.70 and low of Rs 715.75. The total volume of shares traded at the BSE is 1,316,938.

Currently, the stock is trading all time 52-week high, which is above 272.91% over the  52-week low of Rs 203.40.