Analysts feel that Mundra Port, which is operated by Adani Port and Special Economic Zone (APSEZ), may continue to witness growth in cargo volumes owing to better connectivity to power projects on the west coast.
According to one research report, capacity constraints at India’s major ports have led to a flat growth and private port operators such as APSEZ are in a better position to cater to incremental growth in volumes . owing to delay in expansion.
The total cargo volume handled at Mundra port, the company’s flagship port, grew 15 percent y-o-y in the nine month’s ending December 2012. This is in contrast to the 3 percent fall at major ports during the same period.
Analysts also feel that the move by APSEZ to reduce its debt would enable the firm to concentrate on high-growth opportunities at Indian ports.
Recently, APSEZ decided to divest its stake in the Abbot Point terminal project in Australia and use the proceeds to repay some of its debt.
The company’s debt to equity ratio rose from 0.4 at the end of March 2011 to 3.7 at the end of September 2012 mainly owing to its acquisition of the Abbot Point coal terminal for about Rs 9,000 crore in May 2011.
It was perceived to be expensive during that time, since the bid was about 20 percent higher than the Australian government’s bidding estimate.