CareEdge has upgraded the credit rating of Gopalpur Port from BBB (RWP) to AA/Stable, marking an increase of six notches, following its acquisition by Adani Ports and Special Economic Zone (APSEZ) in March 2024.
CARE cited that “APSEZ has an established track record of successfully turning around port assets including Dhamra Port post-acquisition through bringing sticking cargo and operational efficiency”.
CareEdge also pointed to the substantial prepayment of 64% of Gopalpur Port’s external debt, facilitated by an infusion of funds from APSEZ. GPL’s term loans of Rs 443.70 crore from Canara Bank and Rs 413.30 crore from Yes Bank have been fully repaid, bolstering its debt coverage indicators.
At the close of FY24, GPL had a total outstanding debt of Rs 1,438 crore, with 87% comprising external term loans. Following the acquisition, APSEZ infused Rs 1,225 crore via optionally convertible debentures in Q3 FY25, using these funds to prepay external debts of Rs 795 crore and settle other liabilities.
APSEZ, India’s largest port developer and operator, has operations across 10 ports and 3 terminals, handling approximately 27% of the country’s seaborne cargo. This scale and operational expertise were key factors in the rating upgrade for Gopalpur Port.
CareEdge Ratings attributed the stable outlook to expectations of increased cargo volumes and operational improvements under APSEZ’s management. The agency cited APSEZ’s proven track record in revitalising port assets, such as Dhamra Port, through integrated logistics, partnerships with leading shipping lines, and enhanced operational efficiency.
“APSEZ’s extensive fleet of rakes and logistical equipment is anticipated to improve GPL’s operational efficiency and resolve evacuation challenges,” the agency added.
GPL benefits from its favourable location in Odisha, tariff flexibility, and a positive industry outlook for ports. Additionally, GPL maintains a strong liquidity profile, supported by the creation of a debt service reserve account (DSRA) for one quarter of debt servicing. However, it faces competition from long-established ports such as Paradip and Vizag.
Despite the progress, concerns remain about cargo and client concentration risks, alongside evacuation challenges seen during H1 FY25. GPL primarily handles coastal cargo, including limestone, and overseas cargo, such as iron ore and coal. Key clients include JSW Steel, Jindal Steel & Power Limited, Steel Authority of India Limited, Rungta Sons Private Limited, and National Steel Company.
On March 25, 2024, APSEZ entered into a definitive agreement to acquire a 95% stake in GPL, comprising a 56% stake from Shapoorji Pallonji Port Maintenance Private and 39% from Orissa Stevedores Limited. The transaction was completed on October 11, 2024.
GPL operates under a concession agreement signed in September 2006, valid for 30 years with an option to extend by another 20 years upon mutual consent with the Government of Odisha. As per the agreement, GPL shares 7.5% of its total revenue with the state government.
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