Adani Ports Buys Stake In Indian Oiltanking For Rs 1,050 Crore

Adani Ports and Special Economic Zone Ltd. has signed a definitive agreement to acquire Oiltanking India GmbH's 49.38% equity stake in Indian Oiltanking Ltd. for Rs 1,050 crore.

The ports management arm of Adani Enterprises Ltd. will also buy 10% additional stake in IOT Utkal Energy Services Ltd., a 71.57% subsidiary of Indian Oiltanking, according to an exchange filing.

The stake acquisition will make Adani Ports the third largest liquid tank storage player in the country, the company said.

IOTL is among India's largest developer and operator of liquid storage facilities. In its 26 years, it has built a network of six terminals across five states with a total capacity of 2.4 million kilolitres for storage of crude and finished petroleum products.

This includes owned capacity of 5,00,000 kilolitres in Navghar terminal in Maharashtra, Raipur terminal in Chhattisgarh, and Goa terminal.

Indian Oiltanking also has BOOT capacity of 1.9 million kilolitres.

Under its expansion spree, IOTL has recently signed a 25-year Build-Own-Operate-Transfer contract for 6,00,000 million kilolitres of crude storage tank capacity at Paradeep Port with Numaligarh Refinery.

The majority of IOTL's tank capacity is contracted by reputed PSUs and oil majors. With around 80% of IOTL's capacity under "take-or-pay" contract, there is a good visibility on the future cash flows of the company, Adani Ports said.

In FY22, IOTL's revenue and Ebitda were Rs 526 crore and Rs 357 crore, respectively. The acquisition price of Rs 1,050 crore implies an EV/Ebitda multiple of approximately eight times on FY22 numbers, the Adani Group company said.

"With this acquisition, APSEZ's oil storage capacity jumps 200% to 3.6 million kilolitres, making it India's largest third-party liquid storage company... The deal will further strengthen our strategic partnership with Indian Oil Corporation, a key stakeholder and India's largest refiner and customer of oil storage tanks,” said Karan Adani, chief executive officer at Adani Ports.

Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.