Adani Logistics buys agri-logistics arm of Adani Enterprise for Rs 1,662 cr

Brokerages see deal auguring well for both Adani Group companies

In a bid to deepen its presence in the growing domestic logistics industry, Adani Logistics on Saturday announced that it would be acquiring Adani Agri Logistics from Adani Enterprises in an all-cash deal, at a proposed enterprise value of Rs 1,662 crore.

 Adani Logistics is a wholly owned subsidiary of the Gautam Adani-led Adani Ports and SEZ (APSEZ). The acquisition is expected to be completed by March, the company said in a press release on Saturday.

“Adani Agri Logistics is the largest agri-products logistics player with long-term contracts and strong margins. This acquisition brings us one step closer towards our vision of being the leader in providing integrated logistics services in India and focussing on developing hinterland logistics. It enables us to expand our total addressable market, enhance our network and create a value chain to handle all types of cargo in India,” Karan Adani, chief executive officer and whole-time director of APSEZ, was quoted as saying.

After this acquisition, Adani Logistics will have access to 28 locations and seven trains of Adani Agri Logistics. The combined business Ebitda will also double to Rs 200 crore, said the release.

Adani Agri Logistics has a market share of 45 per cent in the modern agri storage infrastructure. Adani Agri Logistics has also made significant inroads into the agri-infrastructure business by setting up grain storage silos and cold storage facilities. 

A service agreement has been inked between Adani Agri and Food Corporation of India (FCI) for handling FCI’s wheat. Under this agreement, state-of-the-art food grain storage and handling facilities are being set up across India.

The $11-billion revenue Adani Group, since the last few years, has chosen the inorganic growth route to expand its business. APSEZ has 10 strategically located ports and terminals representing 24 per cent of the country’s port capacity. 

Brokerages say the acquisition augurs well for both entities as Adani Logistics will get instant presence in several location as warehouses of Adani Agri are spread across while the latter will be able to develop the much needed logistics with far more ease.