The Adani Ports and Special Economic Zone Ltd (APSEZ) announced the acquisition of a privately run Krishnapatnam Port Company Ltd (KPCL) in Andhra Pradesh in January 2020 for Rs. 13,500 crore. APSEZ, India’s largest private port operator, has in the last two decades increased its market share considerably. Today, it has nearly 27% market share of the country’s total port traffic of over 1,200 million tonnes, up from 22% before the KPCL acquisition.
Adani Ports is a customer-facing integrated port infrastructure services provider spanning its presence across ten domestic ports in six costal states of Gujarat, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha; whereas KPCL is engaged as a developer and operator of the deep water port at Krishnapatnam, Andhra Pradesh.
Post having established a strong hold on the west coast, the Adani group had shifted its attention to the east coast eight years ago. So far, the group has successfully invested nearly ₹22,000 crore in the eastern ports of Vizag (₹400 crore); Dhamra (₹5,500 crore); Kamarajar (₹800 crore); Kattupalli (₹1,850 crore), and the biggest being KPCL (₹13,500 crore). Interestingly, Adani group also has a proposition to invest over ₹50,000 crore at its Kattupalli port in Tamil Nadu in the long run to consolidate its position.
The addition of KPCL seems to increase the market share and diversity of APSEZ, both geographically as well as with its cargo composition. With this, APSEZ will cater to a new economic frontier of Andhra Pradesh that currently seems inadequately served by its existing ports. According to Karan Adani, CEO, APSEZ, this acquisition is in line with APSEZ’s target of throughput volumes of 400 mt by fiscal 2025.
The Competition Commission of India has given its approval to Adani Ports and Special Economic Zone Limited for acquisition of Krishnapatnam Port Company Limited. This proposed combination contemplates acquisition of equity shareholding along with management control of 100% of the total issued and outstanding preference share capital of Krishnapatnam Port Company.
The CCI sent its approval through its official tweet and an official copy of the approval is awaited.