Ahmedabad: Adani Ports and Special Economic Zone Ltd (APSEZ) through its subsidiary, The Adani Harbour Services Ltd (TAHSL), has acquired 100 per cent stake in Ocean Sparkle Ltd. (OSL), India’s leading third-party marine services provider.
Key activities carried by the company include towage, pilotage, and dredging. With 94 owned vessels and 13 third-party owned vessels, OSL is a market leader. OSL is valued at an enterprise value of Rs17 billion with Rs3 billion of free cash in the company. The company was established in 1995 by a group of marine technocrats with P. Jairaj Kumar as the Chairman and Managing Director.
“Given the synergies of OSL and Adani Harbour Services, the consolidated business is likely to double in five years with improved margins, thereby creating significant value for APSEZ’s shareholders,” said Karan Adani, CEO, APSEZ. “This acquisition not only provides APSEZ a significant share of India’s marine services market but also provides us a platform for building presence in other countries, thereby facilitating APSEZ’s journey towards becoming the largest port operator globally by 2030 and largest integrated transport utility in India.”
OSL has long-standing relationships with existing clients, with contracts ranging from five to 20 years. Further, the contracts are on ‘Take or Pay’ basis, thereby providing robustness to OSL’s business model. The company has presence in all the major ports, 15 minor ports and all the 3 LNG terminals in India.
The company has significant experience in global maritime servicing through operations in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen and Africa. OSL’s capital structure, quality operations and sustainable cash flows are reflected in its attractive credit rating (AA- by ICRA). The company is expected to have revenues of Rs6 billion and profit after tax of Rs1.3 billion in FY-22. Around 92 per cent of OSL’s total revenue was contributed by marine services and the remaining from dredging and other offshore services combined.
On the back of operational and financial synergies, the consolidated revenue and EBITDA of Adani Harbour Services is expected to jump 100 per cent and reach around Rs50 billion and Rs40 billion respectively by FY-27.