Gujarat's inland container terminal of Navkar will be purchased by Adani Logistics for $835 million
A subsidiary of Adani Ports and Special Economic Zone Ltd, Adani Logistics Ltd (ALL), announced on Tuesday that it has signed a legally binding contract to buy an inland container depot (ICD) from Navkar Corporation Ltd for an estimated $835 million.
According to the release, the agreement would include the purchase of the currently operating ICD at Tumb, close to Vapi in Gujarat, with a capacity to accommodate 0.5 million TEU (twenty foot equivalent unit) containers.
In the near future, when new industrial corridors and logistic parks are constructed along the main freight corridor routes, the ICD's spare area of 129 acres will reportedly give an additional growth path to improve cargo handling capacity.
The ICD also provides facilities for custom-notified land and bonded warehouses, as well as a private freight terminal with four rail handling lines connecting to the western direct freight corridor.
According to ALL, the acquisition is valued at an enterprise value of 835 corore, which implies an EV/Ebitda multiple of 7.8x (based on FY23(E) Ebitda), and is based on the land value and replacement cost of current assets.
According to the statement, the transaction is pending regulatory and lender clearances and is anticipated to finalise this quarter. Enterprise value to earnings before interest, taxes, depreciation, and amortisation, or EV/Ebitda, is a ratio.
One of the biggest ICDs in the nation is Tumb. According to Karan Adani, chief executive and full-time director of Adani Ports, the company's strategic location in the middle of one of the busiest industrial zones
and access to the designated freight corridor allow it to effectively serve the vast hinterland with access to two of the busiest ports on both sides, Hazira & Nhava Sheva.
"A major benefit of having access to the DFC is the anticipated reduction in typical transit times, which are anticipated to be 10 hours by rail against 24 hours by road, in addition to cargo going by rail being 5X greener than that moving by road.
This purchase fits in nicely with our plan to transition into a transportation utility and will help us get closer to our goal of offering affordable door-to-door services to our clients, he added.
According to Adani, ALL is sure that ICD volumes would increase by high double digits. ALL is a comprehensive end-to-end logistics service provider with complete rail solutions for containers, liquids, grains, bulk, and autos as well as multimodal logistics parks.