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Adani Group plans to invest $3 bn for global ports expansion in 3-5 years

Adani Ports aims to increase cargo traffic in the Middle East, Southeast Asia, Africa, and the Mediterranean through strategic acquisitions and partnerships over the next 3-5 years

Adani Ports
Adani Ports
Vasudha Mukherjee New Delhi
3 min read Last Updated : May 22 2024 | 12:53 PM IST
The Adani Group is set to invest $3 billion to expand its global ports capacity, targeting substantial acquisitions to strengthen its position along the vital trade corridor connecting India to Europe via Central and West Asia, according to a report by Mint. The strategic move aims to capitalise on the rising demand for iron ore and coal imports, as well as the export of finished goods.

To fund this $3 billion capital expenditure, Adani Group plans to use a mix of cash, internal accruals, and debt. Additionally, proceeds from an upcoming fundraising effort may also be allocated towards acquiring new overseas ports.

The conglomerate plans to increase its overall port (container-handling) capacity from approximately 600 million metric tonnes per annum (MMT) to 800 MMT within the next two years, primarily through international acquisitions. Currently, 420 MMT of this capacity is domestic.

The group aims to boost port revenues in international trade routes that are currently dominated by China, Mint stated.

Strategic acquisitions and revenue goals

Adani Group has set its sights on acquiring at least three large ports on the coastal borders of Europe, Africa, and Southeast Asia. This expansion aligns with the company’s strategy to enhance its international presence and increase the contribution of its overseas ports to total revenue from the current 10 per cent to approximately 20-25 per cent over the next three years.

This plan also supports the Indian government's vision to strengthen trade ties with Europe, West Asia, and Africa. The Centre has recently signed agreements with several G20 countries aiming to establish the India-Middle East-Europe Economic Corridor. This corridor will enhance transportation and communication links between Europe and Asia via rail and shipping networks, presenting an alternative to the Suez Canal route, which has been affected by the ongoing Russia-Ukraine war.

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Current operations and future plans

In India, Adani Ports and Special Economic Zone Ltd (APSEZ), the country’s largest private port operator, manages 15 ports and terminals. The company handled a record domestic cargo volume of 420 MMT in FY24, representing a 24 per cent year-on-year increase. This volume accounts for about 25 per cent of India’s overall cargo volume of approximately 1,540 MMT, as reported in APSEZ’s regulatory filings.

APSEZ currently operates in countries such as Israel, Sri Lanka, Indonesia, Tanzania, and Australia. It has also signed memorandums of understanding (MoUs) for port-related activities in Vietnam, Malaysia, and the Philippines.

The mega port expansion plan has been under internal discussion for the past three months. Adani Ports is focusing on increasing cargo traffic in the Middle East, Southeast Asia, Africa, and the Mediterranean through strategic acquisitions and partnerships over the next 3-5 years.

With this expansion, Adani Ports aims to achieve revenues of Rs 30,000-31,000 crore in the financial year 2025. APSEZ’s consolidated revenue for FY24 grew 28 per cent year-on-year to Rs 26,711 crore, while net profit surged by 50 per cent to Rs 8,104 crore, both record highs.


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Topics :Adani GroupAdani Ports and Special Economic Zone APSEZAdani Ports & Special Economic Zone LtdAdani Group Adani PortsAdani Port and SEZAdani Ports and Special Economic ZoneAdani PortsBS Web ReportsTrade growtheconomic corridors

First Published: May 22 2024 | 12:53 PM IST

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