Mundra Port plans 35% growth for next few years
CNBC-TV 18 went out and visited Mundra’s SEZ and Port Management. The management said that it is working in full swing and remains confident of growing at over 35% over the next few years.
Company officials told CNBC-TV18’s Niraj Shah that close to 50% of the acquisition of the SEZ land is already complete and negotiations for the balance 50% is underway. In fact, negotiations for leasing out close to 2,000 on acre to the apparel manufacturers is already underway and will be carried out very shortly because of the long gestations nature of their business. Their revenues from SEZ business will start flowing in only post 4-5 years, for the company officials at least it seems that the port facilities are the main driving force for the revenues.
According to CNBC-TV18’s Varinder Bansal, the good thing is that even if Mundra Port loses the litigation against Dubai Port (DP) World, it will still continue to earn the same kind of annuity that it has been earning currently. Secondly the business has been growing at a CAGR of around 35% over the last two-years and the management is confident to grow at the same pace in the future.
Gautam Adani, Chairman Mundra Port & SEZ, “Last year we closed around 28-29 million tonne of cargo. This year what we are targeting is 40 million tonne plus. 2010 we are hopeful that we will cross more than 50 million tonne and 2013-14 we will cross 100 million tonne. That is what basically we are envisaging the growth at Mundra Port and accordingly we are developing our creation of assets to meet that much of volume of cargo to handle there.
“We have to raise the money of Rs 4,000-6,000 crore for our completion of 10,000-megawatt equity requirement depends on the valuations, which ultimately market will establish. But we are thinking that it will dilute 20-25% including the earlier investors 3i Capital as invested in our company,” Adani added.
Ameet H Desai, ED Mundra Port and SEZ said, “Also what we are doing at Mundra Port is going to continuously add capacities. There are two large power plant facilities coming up next to the existing port Tata’s Ultra Mega Power Project for 1,000-megawatt Adani Power’s Generation Facility 4,600-megawatt. To cater to the coal import requirement of two of these large power plants we are setting up a dedicated coal terminal highly mechanized. We will do about 30 million tonne of coal import through this terminal, which we are calling Westport in our internal terminology. This will be like an added port within Mundra Port SEZ that will develop.”
The opportunities are immense and the traffic volume is definitely growing. But does that translate into numbers? According to Shah, from over profits of Rs 200 crore in FY08 to profits of Rs 550 crore in FY09 to revenues of Rs 1,150 crore and profits of Rs 900 crore in FY10, the growth is definitely there. The sum-of-the-parts (SOTP) valuations range anywhere between Rs 650/share to Rs 800/share, he observes.
Company officials told CNBC-TV18’s Niraj Shah that close to 50% of the acquisition of the SEZ land is already complete and negotiations for the balance 50% is underway. In fact, negotiations for leasing out close to 2,000 on acre to the apparel manufacturers is already underway and will be carried out very shortly because of the long gestations nature of their business. Their revenues from SEZ business will start flowing in only post 4-5 years, for the company officials at least it seems that the port facilities are the main driving force for the revenues.
According to CNBC-TV18’s Varinder Bansal, the good thing is that even if Mundra Port loses the litigation against Dubai Port (DP) World, it will still continue to earn the same kind of annuity that it has been earning currently. Secondly the business has been growing at a CAGR of around 35% over the last two-years and the management is confident to grow at the same pace in the future.
Gautam Adani, Chairman Mundra Port & SEZ, “Last year we closed around 28-29 million tonne of cargo. This year what we are targeting is 40 million tonne plus. 2010 we are hopeful that we will cross more than 50 million tonne and 2013-14 we will cross 100 million tonne. That is what basically we are envisaging the growth at Mundra Port and accordingly we are developing our creation of assets to meet that much of volume of cargo to handle there.
“We have to raise the money of Rs 4,000-6,000 crore for our completion of 10,000-megawatt equity requirement depends on the valuations, which ultimately market will establish. But we are thinking that it will dilute 20-25% including the earlier investors 3i Capital as invested in our company,” Adani added.
Ameet H Desai, ED Mundra Port and SEZ said, “Also what we are doing at Mundra Port is going to continuously add capacities. There are two large power plant facilities coming up next to the existing port Tata’s Ultra Mega Power Project for 1,000-megawatt Adani Power’s Generation Facility 4,600-megawatt. To cater to the coal import requirement of two of these large power plants we are setting up a dedicated coal terminal highly mechanized. We will do about 30 million tonne of coal import through this terminal, which we are calling Westport in our internal terminology. This will be like an added port within Mundra Port SEZ that will develop.”
The opportunities are immense and the traffic volume is definitely growing. But does that translate into numbers? According to Shah, from over profits of Rs 200 crore in FY08 to profits of Rs 550 crore in FY09 to revenues of Rs 1,150 crore and profits of Rs 900 crore in FY10, the growth is definitely there. The sum-of-the-parts (SOTP) valuations range anywhere between Rs 650/share to Rs 800/share, he observes.