JSW Infrastructure is in negotiations to pay Rs 3,000 crore to acquire Gopalpur Ports, a division of the SP Group.

26 Oct 2023 , 12:23 PM

According to news reports, JSW Infrastructure is in negotiations to acquire Gopalpur Ports, the ports division of Shapoorji Pallonji (SP), for an estimated enterprise value of Rs 3,000 crore, including the company’s debt.

The reports claim that the asset is being sold as part of the pledges that the Mistry family, SP’s promoters, gave to bankers in loan covenants they signed. SP Group has pledged to sell the unit by March 31st of the following year in accordance with the covenants. Gopalpur Ports, located in Odisha, is viewed by JSW Infrastructure, whose shares were launched on exchanges earlier this month, as a strategic fit that will enhance its steel-making operations.

On the eastern coast of India, Gopalpur Ports manages an all-weather deep-draft port in the town of Gopalpur, Odisha. This port is ideally situated between the well-known ports of Paradip and Vizag.

Iron ore freight, a vital raw material for JSW Steel’s steel industry, is its area of expertise. The reports mentioned earlier emphasized that talks might not necessarily lead to a deal.

In September, JSW Infrastructure, a private port operator in India ranked second only to Adani Ports and Special Economic Zone, raised Rs 2,800 crore in an IPO.  Additionally, Adani runs a port in Odisha at Dhamra.

In Goa’s Mormugao, JSW Infrastructure secured its first port concession in 2002. As of December 31, 2022, it has nine port concessions. The organization can now handle 153 million tons of goods annually.

It runs terminals in important ports in Tamil Nadu and Odisha on the east coast and in Goa and Karnataka on the west coast.

If discussions were to succeed, JSW’s port portfolio might gain an additional 25 million tonnes of capacity annually from SP Group’s port in Gopalpur. The Mistry family has been reorganizing the balance sheet of SP Group and concentrating its commercial operations on sectors where debt repayment and profitable development are possible.

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