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Event: Media reports indicate that Kandla Port has approved Adani Ports
and SEZ’s (APSEZ) bid to build and operate 14 mtpa cargo port outside
Kandla creek at a capex of INR10.6bn.
http://www.livemint.com/2012/02/15001029/Kandla‐port‐approves‐Adani‐bid.html?h=B
The Kandla Port Trust, which runs India’s biggest cargo‐handling port by volume at
Kandla (Gujarat), has approved the highest price bid submitted by APSEZ to build an
INR10.6bn satellite port outside Kandla creek to handle 14 mtpa cargo. APSEZ, India’s
biggest private port operator, had emerged the highest bidder for the project in
December by agreeing to share 25.09% of its revenue from the facility with the port.
The company has recently run into problems with the Union Home Ministry, which has
denied security clearance to the firm to participate in auctions for port contracts
without attributing any reasons.
Our view: Directionally positive
While the size of the port awarded is small compared to APSEZ’s existing capacity of
more than 150 MT at the flagship port at Mundra and 50 MT of Abbot point terminal,
this is directionally positive given that APSEZ has been denied clearance/bid not
accepted for a number of PPP projects in India during the past 6–9 months (JNPT fourth
container terminal, Vizhinjam port and Vizag port projects denied clearances. Also,
Chennai port did not accept APSEZ’s revised revenue share of 5% against 1.5% earlier
offered for the container terminal citing that it was much lower compared to recent
revenue share offered at other ports for similar projects).
At 70:30 Debt:Equity the Kandla satellite port project will entail equity investment of
INR3.2bn. While we await more clarity on project details from the company, this being
similar to most other PPP port projects could add a nominal INR2/share to the overall
SOTP. We currently have a ‘BUY’ recommendation on the stock with SOTP‐based TP of
INR168/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Event: Media reports indicate that Kandla Port has approved Adani Ports
and SEZ’s (APSEZ) bid to build and operate 14 mtpa cargo port outside
Kandla creek at a capex of INR10.6bn.
http://www.livemint.com/2012/02/15001029/Kandla‐port‐approves‐Adani‐bid.html?h=B
The Kandla Port Trust, which runs India’s biggest cargo‐handling port by volume at
Kandla (Gujarat), has approved the highest price bid submitted by APSEZ to build an
INR10.6bn satellite port outside Kandla creek to handle 14 mtpa cargo. APSEZ, India’s
biggest private port operator, had emerged the highest bidder for the project in
December by agreeing to share 25.09% of its revenue from the facility with the port.
The company has recently run into problems with the Union Home Ministry, which has
denied security clearance to the firm to participate in auctions for port contracts
without attributing any reasons.
Our view: Directionally positive
While the size of the port awarded is small compared to APSEZ’s existing capacity of
more than 150 MT at the flagship port at Mundra and 50 MT of Abbot point terminal,
this is directionally positive given that APSEZ has been denied clearance/bid not
accepted for a number of PPP projects in India during the past 6–9 months (JNPT fourth
container terminal, Vizhinjam port and Vizag port projects denied clearances. Also,
Chennai port did not accept APSEZ’s revised revenue share of 5% against 1.5% earlier
offered for the container terminal citing that it was much lower compared to recent
revenue share offered at other ports for similar projects).
At 70:30 Debt:Equity the Kandla satellite port project will entail equity investment of
INR3.2bn. While we await more clarity on project details from the company, this being
similar to most other PPP port projects could add a nominal INR2/share to the overall
SOTP. We currently have a ‘BUY’ recommendation on the stock with SOTP‐based TP of
INR168/share.
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