Company Studied: Adani Ports and SEZ
This ppt consist of study on one of the India's largest integrated ports and logistic company.
Presentation prepared by management students.
2. Table of Contents
1. Industry Overview
2. Competitors
3. Basic Information
4. Background
5. Different Ports of Adani
6. Achievements
7. Business Model
8. Performance Highlights
9. SWOT Analysis
10. Corporate Governance
11. Investment Summary
12. Capital Structure
13. Shareholding Pattern
14. Revenue Contribution
15. Financial Ratios
16. Road ahead….
17. Credit Rating
3. Industry overview
India has 12 major and
205 notified minor and
intermediate ports.
India is the sixteenth largest
maritime country in the
world, with a coastline of
about 7,517 km.
Indian Government has
allowed (FDI) of up to 100%
under the automatic route
for port and harbour
construction and
maintenance projects.
During FY19, cargo traffic at
major ports in the country
was reported at 699.05
million tonnes (MT).
Cargo traffic handled stood at
463.07 million tonnes in 2019
(till November 2019).
4. Competitors
1 Great Eastern Shipping Co. Ltd.
2 Gujarat Pipavav Port Ltd
3 Cochin Shipyard Ltd.
4 Mazagon Dock Shipbuilders Ltd
5. Basic Information
2019- Acquires 75% stake in Krishnapatnam port for Rs13,500 crore.
2016- Acquisition of TM Harbour Services Private Limited
2014- Acquisition of Dhamra Port
2012- Company name changed to Adani Ports and Special Economic Zone Ltd
2006- Notified as a Special Economic Zone (SEZ), Merger with MSEZ and ACL
1998- Incorporated as Gujarat Adani Port Limited on May 26, 1998
2017- Raised US$ 500 million in foreign currency denomination bonds
6. Adani Ports and Special Economic Zone
Limited (APSEZ)
Energy (Renewable,
thermal power
generation and
transmission)
Logistics
(ports and rail)
Spanning resources
(Coal Mining and
trading)
Agricultural
Commodities
Ancillary
Industries
7. Background
➢ India’s largest private sector port developer and operator
➢ Operates 10 strategically located ports on the Indian coastline
➢ Divided into three businesses – ports, logistics and Special Economic Zones (SEZs)
➢ Installed capacity of 395 million metric tons (MMT) as of FY19
➢ Adani ports handled total of 57 MMT cargo in Q1FY20
8. Mundra Port(Technologically advanced): Gujarat-
Mundra Port is a deep-water, all-weather, berthing on
arrival port in the Gulf of Kutch. With 26 berths and
dedicated terminals for different cargo and commodity
types, it has an annual capacity to handle 231 MMT
cargo.
Hazira Port: The Hazira Port is a deep-water port
located in the Gulf of Khambhat, Surat, Gujarat. It
constitutes 5 berths and has an annual capacity to
handle 35 MMT cargo.
Dhamra Port:It has an annual capacity of 40 MMT
cargo which can go up to 100 MMT in the future. It is
located near the mineral belts of Odisha, Jharkhand
and West Bengal. It is connected by a 62 km railway
line to Ranital Link Cabin which connects the main
Howrah-Chennai line.
Dahej Port : It accommodates a Ro-Ro Jetty for
project cargo movement of 9.8 km long fully integrated
high speed conveyor
Different ports of Adani
9. Different ports of Adani (Cont.)
Mormugao Terminal:Mormugao Terminal is a one-berth terminal located on the west coast of India. It has a
capacity of 7 MMT cargo. It can handle coal cargo, Panamax and capsize vessels. Its main feature is a
mechanized material handling system of conveyor systems and stacker cum reclaimers. This system has a
stacking capacity of 5000 TPH and reclaiming capacity of 2500 TPH.
Vizhinjam Port: The 3.5 million TEU port is expected to be commissioned by 2020. It is expandable to 4.3
million TEU and allows for a draft (the maximum a ship can sink into the water on loading) of 18.5 metres.
Kattupalli Port: Kattupalli Port lies 24 km north of Chennai Port, and can handle 18 MMT cargo and a 45,000
sq. ft. warehouse with off-dock CFS. Kattupalli Port is connected to all CFSs/ICDs/SEZs in Chennai for imports
and exports.
Vizag Terminal : The Vizag Terminal is located on the east coast of India with one berth located in the northern
arm of the inner harbour of Visakhapatnam Port Trust. The port has a capacity to handle 6.5 million tonnes per
year. It is permitted to handle coal cargo.
10. Achievements
➢ Non Major Port of the year 2011
➢ MALA awards for the Best Private Port and Best Private Container Terminal Operator.
➢ “Special Commendation Certificate for Golden Peacock Award” which is in the field of Occupational, Health
and Safety- 2011.
➢ Won awards at the 22nd Gujarat Level Convention on Quality held at Vadodara in September 2011 and 25th
National Convention on Quality Concepts (NCQC)- 2011 held at Hyderabad.
➢ Gateway Awards of Excellence-Ports and Shipping 2012 category which has given “Private Port of the Year”
from Ministry of Shipping, New Delhi.
11. Logistics
➢ 30 rakes, 16 locomotives
➢ 83 silos storage. 20 year license to operate rails
➢ Enhancing connectivity between ports and origin / destination of cargo
➢ Pan-India end-to-end logistics services provider – asset and service based
➢ Caters to companies across Container, Bulk, Break-bulk, Chemical, Auto and Liquid industries
➢ 20-year Category Container Train Operator License – Fleet of ~20 rakes
➢ Connectivity between gateway ports and origin/destination of cargo
➢ ISO 9001 certified.
Investments
➢ Completion of Kattupalli acquisition
➢ Adani Logistics Ltd. acquires Adani Agri Logistics Ltd.
➢ Definitive agreement signed to acquire Innovative B2B Logistics
Business Model
12. Performance Highlights
➢ Handled cargo of 208 MMT, a growth of 15% YOY surpassing all India cargo growth of 5%.
➢ Container volume crossed 5.76 million TEUs an increase of 13% on YOY basis, surpassing all India
container growth of 10%.
➢ Earnings per Share (EPS) stood at ₹19.27 on face value of ₹2 each.
➢ 81% revenue from Ports, 5% from Logistics and 7% from SEZ
13. SWOT Analysis
Strength:
Commenced operations at Mundra Port and currently operates
10 ports in India;comprising 45 berths and 14 terminals across 6
states.
APSEZ operates a fleet of 19 dredgers which is the largest
capital dredging capacity in India.
The Total Cargo growth for APSEZ stands at 11% as compared
to 8% from other Indian ports.
Weakness:
Stiff competition and low market share value as compared to
industry giants such as the Tata and Reliance.
Limited presence throughout the country.
Allegations of Environmental violation.
Event risks related to any large scale acquisition given the
acquisitive growth strategy of the company.
Opportunities:
With the support of The Adani Group, APSEZ is always capable
of expanding its reach to various countries.
The Planning Commission of India has made proposals for
expansion in roads and highways, ports, civil aviation and
airports, and power infrastructure segments.
Threats:
Facing delay in security clearance for the government in the port.
The fluctuating International price of coal.
Stricter norms to be followed to avoid environmental violations.
14. Corporate Governance
Board of Members
➢ Gautam Adani (Chairman and Managing Director)
➢ Rajesh Adani (Non-Independent and Non-Executive Director)
➢ Karan Adani (Whole Time Director)
➢ Ganesan Raghuram (Independent and Non-Executive Director)
➢ Malay Mahadevia (Whole Time Director)
➢ Gopal Krishna Pillai (Independent and Non-Executive Director)
➢ Radhika Haribhakti (Independent and Non-Executive Director)
➢ Mukesh Kumar, IAS (Non-Independent and Non-Executive Director)
➢ Bharat Sheth (Independent and Non-Executive Director)
➢ Nirupama Rao (Independent and Non-Executive Director)
15. Corporate Governance (Cont.)
Courage, Trust and Commitment are the main tenets of our Corporate Governance Philosophy:
➢ Courage: we shall embrace new ideas and businesses.
➢ Trust: we shall believe in our employees and other stakeholders.
➢ Commitment: we shall stand by our promises and adhere to high standard of business. The Company has
complied with all the requirement
16. Investment Summary
➢ Acquisition of Krishnapatnam Port Company Limited (KPCL) for rs 13500 cr.
➢ Demand received from Mormugao Port Trust for the payment of revenue share on deemed storage
charges of Rs.72.62 Crores.
➢ International foray for setting up Container Terminals at Myanmar worth $290mn .
➢ Bond Issuance of $650 million improving ROCE.
➢ Adani Ports and SEZ Ltd (APSEZ) has ventured into cold chain logistics business by acquiring a
40.25 per cent stake in Bengaluru-based Snowman Logistics for Rs 296 crore.
➢ The price of the deal was at Rs 44 per share, a 3.2% premium to the market price of December 27,
and a 12 % premium to the 60-day volume-weighted average price (VWAP).
17. Capital Structure
Highlights
➢ The Equity share Capital has been marginally increased (0.18 cr.) in 2015-16 as compared to 2014-15
and has remained same for the coming financial years.
➢ From the table it is observed that the capital raised by the company in the form of debt has been
increasing every year, this shows that company is raising money through debt for expansion and to
increase its revenue.
18. ➢ Promotor’s share which has been pledged in Dec 2018 might lead to high volatility in the stock
price which increases the likelihood of market loss for the investors.
➢ In Dec 2019 qtr promoters pledge reduced to 36.41% from 45.51% of holdings which has shown
positive sign for investors.
➢ Promoters holding marginally changed to 62.46% from 62.3% as of Dec 2019 qtr.
Shareholding Pattern
19. Revenue contribution (In cr).
Highlights
➢ From the above table it is observed that revenue of consolidated includes 48.8% from Standalone.
➢ Interest and bank charges of standalone is higher than the consolidated figure which states that Adani ports has high amount
of debts or higher interest rates.
➢ Profit after taxes of Standalone is 65.21% of the consolidated figure.
22. Road ahead….
➢ With the acquisition of Krishnapatnam Port, the company aims to double its Cargo throughput by
FY2025.
➢ The company has estimated the payback period of 4 years from Krishnapatnam Port.
➢ Adani Port has shown interest in acquiring controlling stake in public sector unit, Container
corporation of India Ltd. (CONCOR).
➢ Planning to acquire the Dighi Port in Maharashtra to achieve its goal of doubling the Cargo by
FY2025.
➢ APSEZ plans to invest over ₹50000 cr. at it’s Kattupalli Port in Tamil Nadu in long run to consolidate
its position further.
➢ Adani Port has agreed to acquire 40.25% stake in Snowman Logistics Ltd. from Gateway Distriparks
Ltd. for about ₹296 cr., to expand its cold chain logistics and warehousing business.
24. Overall Rating: A
Corporate Governance:A
1) It’s Performance is
growing YOY
2) It is majorly a Family-
run business but the
also have independent
Directors and Auditors.
Development of Industry:A
1) Net profit at major ports has
increased to Rs 3,413 crore in
FY18 while operating margin
increased from 44 per cent.
2) The Government has allowed
(FDI) of up to 100%.
3) The Government is aiming to
create port capacity of 3200
MMT.
Competitive Advantage:
A+
1) Highly competitive
industry and
restriction to entry
2) It has high capital
3) Acquired major part
of western coast i
Financial Ratios: B+
1) The debt to equity ratio is
high which shows
company has high debt
portion.
2) The DSCR of company is
0.21 which is less than 1.
Strategic Direction: A+
1) It has completed
acquisition of
Kattupalli port in 2018
2) It also increasing its
Cargo volume YOY
3) Acquired
Krishnapatnam port
this year
