The Adani Group, India’s biggest private port infrastructure developer, is making a bid on the Krishnapatnam Port that would allow it to own almost three-quarters of the emerging alternative gateway on the country’s east coast, sources said.
The deal would give Adani a 72 percent stake in Krishnapatnam. Spokespersons for both sides were not available for comment, although sources close to Krishnapatnam Port Company said an announcement about an ownership change is expected shortly.
Ahmedabad-headquartered Adani currently has operations at 10 port locations in India. Four are equipped with sophisticated container-handling facilities, including its flagship Mundra Port. Adani’s group container throughput accounted for approximately 30 percent of such freight movement in and out of the country last year.
Anil Yendluri, CEO of the Krishnapatnam Port, and Vinita Venkatesh, director of the Krishnapatnam Container Terminal, renamed Navayuga Container Terminal, have stepped down, sources told JOC.com.
Krishnapatnam — about 112 miles north of Chennai — was launched in 2008 under a 30-year concession with the local state maritime authority that can be extended by 20 years. Featuring an expansive waterfront, deep water depth that can accommodate the latest generation of mega-ships, and advanced equipment, the privately built harbor has been touted as an effective antidote to port infrastructure inefficiencies that kept mainline carriers at bay.
The port opened container operations in 2013 with two dedicated berths capable of handling 1.2 million TEU annually. Although the port has seen container volume grow at a good pace, most of that traffic has thus far come from coastal moves meant for foreign transshipment. Out of 506,000 TEU shipped in and out in fiscal year 2018-19, as much as 230,682 TEU represented short-haul relay movement, according to a JOC.com analysis. Krishnapatnam’s overall tonnage rose to 54.37 million tons from 45.26 million tons in fiscal 2017-18.
The port is currently 92 percent owned by the Hyderabad-based CVR Group, which has a diversified business portfolio. The sale comes on the heels of the developer announcing a plan to expand container capacity to 2 million TEU, along with other infrastructure upgrades.
Adani seeks to double volumes
For the Adani Group, the acquisition could take its port arm a step closer to becoming a 400-million-ton cargo handler by 2025, up from about 208 million tons in fiscal year 2018-19. In a recent investor presentation, the company said it would pursue “both organic and inorganic growth opportunities” to reach that goal.
After positioning itself solidly on India’s west coast, with ample container capacity at the ports of Mundra and Hazira, Adani has shown a keen interest in extending its reach to the east coast region, where it has completed two acquisitions in recent years — the purchase of the Dhamra Port in 2014 and the Kattupalli Port takeover in 2016.
The group’s other port locations are: Dahej, Kandla, Mormugao, Visakhapatnam, and Ennore. In addition, the company is building a container transshipment facility at Vizhinjam, a greenfield site about 10 miles southwest of Trivandrum in India’s southern state of Kerala. Its first phase, with a capacity of 1.8 million TEU annually, is targeted to be ready next year.
The Adani port network’s 2018 combined throughput hit 4.8 million TEU, slightly behind the record 5.04 million TEU shipped through Jawaharlal Nehru Port Trust (JNPT), India’s busiest public harbor. Of the 4.8 million TEU, the three Adani terminals at Mundra alone contributed 3.6 million TEU, according to data compiled by JOC.com.
Mundra cumulatively handled 413,926 TEU in July, close to the 431,323 TEU at JNPT, new JOC data shows.
Bency Mathew can be contacted at email@example.com.