JSW Infra Explores Rs 3,000 Cr Deal To Acquire Gopalpur Ports From SP Group

Infra major JSW Infrastructure is in talks to purchase Gopalpur Ports, Shapoorji Pallonji's (SP) ports division, for an estimated Rs 3,000 crore, including the debt of the company, as reported in the media.

Media reports claim that the Mistry family, who are SP's promoters, made the choice to divest this unit as part of loan covenants they signed with financial institutions. The SP Group has agreed to sell this unit by March 31 of the upcoming year in compliance with certain covenants. 

JSW Infrastructure sees Odisha's Gopalpur Ports as a crucial addition to its steel production activities.

An all-weather deep-draft port owned and operated by Gopalpur Ports is located in Gopalpur, Odisha, which is well situated between the well-known ports of Paradip and Vizag on India's eastern coast. 

Handling iron ore cargo, a vital raw material for JSW's steel company, is its area of expertise. As reported by the media, there is no guarantee that these discussions will lead to a signed contract.

In September, JSW Infrastructure, which is the second-biggest private port operator in India after Adani Ports and Special Economic Zone, raised a whopping Rs 2,800 crore through an IPO. The offering saw a significant 37-fold subscription rate, piquing interest from both institutional and retail investors.

JSW Infrastructure's journey in port operations began with its first concession at Mormugao in Goa back in 2002. 

As of December 31, 2022, the company held nine port concessions. Its cargo handling capacity has reached 153 million metric tonnes per year, with terminals at major ports on the west coast, including Goa and Karnataka, as well as on the east coast in Odisha and Tamil Nadu.

If the negotiations result in an agreement, SP Group's Gopalpur port could add approximately 25 million tonnes per year to JSW's port portfolio. The Mistry family has been diligently working on restructuring the SP Group's financial position and focusing on areas that promise profitable growth and debt repayment.

As part of this strategy, the group is planning to launch an initial public offering of shares for Afcons Infrastructure, a subsidiary engaged in engineering and construction activities.

The proceeds from the sale of Gopalpur Ports, alongside the anticipated IPO of Afcons, will be used to reduce debt. Furthermore, they are committed to completing specific real estate projects that can generate income to facilitate debt repayments.