Adani Ports Says It Can Easily Acquire ‘Strategic’ Target Concor
(Bloomberg) -- Adani Ports & Special Economic Zone Ltd. expects to easily raise funds, without weakening its financial health, to acquire state-owned logistics firm Container Corp. of India Ltd., or Concor, in which the government is looking to divest its shareholding.
“Concor is a very strategic acquisition,” Chief Executive Officer Karan Adani said in an Aug. 3 call with analysts, which was confirmed by an Adani spokesman on Thursday. By raising funds “without stretching the balance sheet, we should easily be able to do that acquisition,” he said.
The transaction underscores the rapid expansion spree that the Adani Group has seen in recent years as billionaire-founder Gautam Adani -- Karan Adani’s father -- rapidly diversifies what was once an agri-trading business into a conglomerate spanning ports, power generation, airports, data centers and green energy.
Adani Ports, which is India’s largest private port operator, has synergies with Concor as the latter owns inland ports -- called dry ports -- across the country in addition to providing rail transport for containers that are critical for port operations. The publicly traded state-run firm also handles cold-chain and air cargo besides managing some ports. all these will bolster Adani Ports’ portfolio.
The Narendra Modi-led government is looking to dilute its stake in Concor from 55% to a minority stake. Concor’s Chairman V. Kalyana Rama called the disinvestment process a “work in progress” in a July 30 call with analysts.
While Adani Ports can also scale up on its own, Karan Adani said it would take a lot of time. “It is possible to create an alternate, but it takes 10 years,” he said. “You are paying to fast track your strategy.”
©2021 Bloomberg L.P.