KPCL Showcase Presentation, Dec 2020
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Spotlight on Krishnapatnam Port Adani Ports and SEZ Ltd., December 2020. Contents A Group profile B Company profile C Krishnapatnam port (KPCL) the transformative asset D KPCL assets – Marine, Terminal and Evacuation Infrastructure E KPCL operational efficiency post agreement F KPCL future outlook G ESG, CSR H Annexure 2 Adani Group: A world class infrastructure & utility portfolio Adani Transport & Logistics Energy & Utility Portfolio Portfolio • Marked shift from B2B to B2C businesses– 63.5% 100% 75% 75% • AGL – Gas distribution network to serve key APSEZ SRCPL ATL AGEL geographies across India Port & Logistics Rail T&D Renewables • AEML – Electricity 100% 75% 37.4% distribution network that powers the AAPT APL AGL Gas DisCom financial capital of Abbot Point 75% IPP India AEL • Adani Airports – To Incubator operate, manage and develop eight airports in the country • Locked in Growth 2020 – 100% 100% 100% 100% • Transport & Logistics - Airports and Roads AAHL ARTL AWL Data Airports Roads Water Centre • Energy & Utility – ~USD 54 bn1 Water and Data Centre Combined Market Cap Opportunity identification, development and beneficiation is intrinsic to diversification and growth of the group. 1 . As on November 27, 2020, USD/INR – 74 | Note - Percentages denote promoter holding 3 Light purple color represent public traded listed verticals Adani Group: Decades long track record of industry best growth rates across sectors Port Cargo Throughput (MT) Renewable Capacity (GW) Transmission Network (ckm) CGD7 (GAs8 covered) 161% 45% 12% 21% 2.5x 6x 3x 30% 1.5x 5% 7% 25% Industry APSEZAdani Industry AGELAdani Industry ATL Industry AGL 2014 972 MT 113 MT 2016 46 GW 0.3 GW 2016 320,000 ckm 6,950 ckm 2015 62 GAs 6 GAs 2020 1,339 MT 223 MT 2020 114 GW 14.2 GW6 2020 423,000 ckm 14,837 ckm 2020 228 GAs 38 GAs APSEZ AGEL ATL AGL Highest Margin among Worlds largest Highest availability India’s Largest private CGD Peers globally developer among Peers business EBITDA margin: 70%1,2 EBITDA margin:89%1,4 EBITDA margin: 92%1,3,5 EBITDA margin: 31%1 Next best peer margin: 55% Next best peer margin: 53% Next best peer margin: 89% Next best peer margin: 30% Transformative model driving scale, growth and free cashflow Note: 1 Data for FY20; 2 Margin for ports business only, Excludes forex gains/losses; 3 EBITDA = PBT + Depreciation + Net Finance Costs – Other Income; 4 EBITDA Margin represents EBITDA earned from power sales and exclude other items; 5 . EBITDA margin of transmission business only, does not include distribution business. 6. Contracted & awarded capacity 7. CGD – City Gas distribution GAs 8. Geographical Areas - Including JV 4 Adani Group: Repeatable, robust & proven transformative model of investment Phase Development Operations Post Operations Origination Site Development Construction Operation Capital Mgmt • Redesigning the • Analysis & market • Site acquisition • Engineering & design • Life cycle O&M capital structure of intelligence planning • Concessions and • Sourcing & quality the asset regulatory agreements levels • Asset Management • Viability analysis • Operational phase Activity plan • Strategic value • Investment case • Equity & debt funding funding consistent development at project with asset life India’s Largest Longest Private HVDC Largest Single Location 648 MW Ultra Mega In FY20 issued seven Commercial Port Line in Asia Private Thermal IPP Solar Power Plant international bonds across the (at Mundra) (Mundra - Mohindergarh) (at Mundra) (at Kamuthi, TamilNadu) yield curve totalling~USD4Bn Constructed and Highest Margin Highest line High declared Commissioned in All listed entities maintain among Peers availability capacity of 89%1 nine months liquidity cover of 1.2x- 2x as a matter of policy. Performance 14% 47% 33% 31% 55% 20% March 2016 March 2020 PSU Pvt. Banks Bonds 1. FY20 data for commercial availability declared under long term power purchase agreements; 5 Company Profile APSEZ: A transport utility with string of ports and integrated logistics network String of Ports • Twelve Ports ~490 MMT of augmented capacity. • Setting benchmark in turnaround time across 66% 54% 67% industry. 92% FY15 8% Capacity 490 MMT FY20 33% • Single window service & excellence in operations resulting in world’s best port EBITDA margin ~70% 250 1600 223 13391400 Logistics Platform All India 200 1200 CAGR – 5% • Hinterland reach of >90% 972 150 139 1000 APSEZ • Achieving East and West Coast Parity 113 800 CAGR – 12% 101 • 100 84 Multi pronged growth in logistics business to amplify 600 Ex- Mundra end mile connectivity. Mundra CAGR 400 CAGR 50 5% • Embedded ESG Framework for securing value. 38% 12 200 0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Mundra APSEZ APSEZ ex-Mundra All India (IPA) Consistent gain market share and grew at 2.5x of market, led by Non-Mundra Ports CAGR of 38% 7 APSEZ : Largest private transport utility APSEZ – Dhamra Port PortsPorts One to twelve in One to ten in Import - Export - Steel twentytwenty years years Coking coal (HRC/CRC) 2x Port income String of Ports Ports of Prosperity 2x Port gate to Warehousing Warehousing SEZSEZ customer gate Warehousing 13k+* Ha of income ~10k+ Ha of land model intertwined Land Bank bank to customer’s supply chain. 2x Rail Rail - GPWIS income Rail - GPWIS Integrated Logistics (CTO to IWW & AFS an organic evolution) Customer – Tata Steel Plant An integrated approach through Ports, SEZ and Logistics creating a multiplier effect 8 * Includes both SEZ and non SEZ land APSEZ : Largest network of ports in India West Coast East Coast Capacity 327 MMT Capacity 163 MMT FY06 FY21 Dahej Moga Kanech 14 Port * Kilaraipur MMT 1 12 Kotkapura Dhamora Tuna Patli 14 Kannauj MMT Samastipur and Darbhanga Capacity Kishangarh 10 MMT 490 MMT Mundra Vidisha Katihar Harda MMT 264 Hoshangabad Satna Dahod Kolkata Ujjain Dewas Nagpur Dhamra FY07 FY21 Taloja Hazira 45 MMT Borivali 30 MMT Vizag Mundra - 6 MMT India’s Largest Logistics Park Commercial Krishnapatnam Container Terminals 1 Port by 64 MMT Bulk Terminals 5 Volume Multipurpose Ports Kattupalli Malur Silos MMT Mormugao 18 CFS/EXIM Yard 5 MMT Logistics Park Trains Coimbatore Ennore 6 60 MMT Logistics Park Vizhinjam 12 under construction 18 MMT Silos under construction 12 ports serving vast economic hinterland of the country 9 *Two port under construction (Vizhinjam & Myanmar) | Capacity excludes Myanmar APSEZ: Financial discipline and prudent policy creates value Capital Management 250 221 5 204 207 4.5 • Investment Grade rated since FY16 186 200 4.4 179 4 3.5 • Improve leverage ratio (from 4.4x to 2.9x) Net Debt (INR Bn) 150 3.4 3 Net Debt/EBITDA • Incremental earnings deployed for growth (EBIDTA 2.9 2.9 2.5 100 2.5 2 CAGR of 13% with constant Net Debt) 1.5 50 1 0.5 Absolute net debt Forex denominated long term debt 0 0 FY16 FY17 FY18 FY19 FY20 and FX debt obligation • Strategy based on underlying FX earnings consistent with net debt to EBITDA • FX revenue as a percentage of FX debt 3000 350% coming down 2.9x consistently continues to be stable 2.8x 2.7x 300% 2500 2,652 • Exponential increase in FX earnings to FX debt 250% service coverage 2000 2,163 2,129 1,888 1.5x1,978 200% 1500 FX Revenue 150% Total FX Debt 1000 100% FX Maturity Coverage Capital Allocation 0.7x 430 330 371 410 500 273 50% • New projects - Pre-tax project IRR of 16% 0 0% • ROCE to be higher than cost of capital FY16 FY17 FY18 FY19 FY20 Capital flow mirrors growth vision 10 Krishnapatnam port (KPCL) the transformative asset APSEZ : Krishnapatnam port – Location of the asset • Located on east coast of India in Nellore Visakhapatnam Port district of Andhra Pradesh. (~180 km Gangavaram Port north of the Chennai Port) Telangana • Largest private port on the east coast & Kakinada Port the 2nd largest private port in the country • BOST* Concession Model for 50 years Andhra • Nearby Ports : Pradesh • Chennai Port - 200 km Krishnapatnam Port • Kamarajar Port (Ennore) - 180 km • Kakinada Sea Port - 520 km • Gangavaram Port - 660 Km Kattupalli Port Kamarajar Port • Visakhapatnam Port - 665 km Chennai Port All weather deep water port, capable of handling cape size vessels. *BOST: Built operate share and transfer 12 APSEZ : Krishnapatnam port the value accretive acquisition Continuing APSEZ – 75% Promoter - 25% APSEZ trades @ EV / EBITDA KPCL multiple of ~17x Enterprise Value of INR 12,000 cr. and expected EBITDA for FY 21 to be KPCL acquisition around INR 1,200 cr. resulting in acquisition EV/ EBITDA multiple of 10x @ EV / EBITDA of 10x enhances Particulars Amount in Rs. cr. APSEZ’s value Enterprise value 12,000 Total debt 7,500 Total equity 4,500 APSEZ share (75%) 3,375 13 APSEZ : Krishnapatnam port - Infrastructure • Master plan has an approved capacity of 300 MMT pa. • Current capacity of 64 MMT pa. • Waterfront of 20 km. under the concession with deep draught of 18.5 meters • Port land of 3,064 acre developed out of 6,800 acre of available land • Adequate waterfront and land bank for future development to capture growth 14 APSEZ : KPCL - Salient features of concession Concession is for 30 years from COD with automatic extension of 2 blocks of 10 years each Concession started from March 2009 / March 2059 Year % of Gross Revenue March 2009 to February 2039 2.6% March 2040 to February 2049 5.2% March 2050 to February 2059 10.4% Higher of fair market value as determined by experts or the debt outstanding at the end of concession period Residual Concession Life of 39 years 15 APSEZ : Krishnapatnam port – Hinterland reach • Central & Southern Andhra Pradesh, Telangana and Eastern Karnataka • Port caters to thermal power, cement plants & edible oil refinery cluster • Attracts export commodities like Agri, cement, minerals, fish products (reefer), etc. through container cargo • Nearby Major Cities : • Chennai – 175 km • Hyderabad – 475 km • Bangalore – 390 Km • Visakhapatnam – 650 km 16 APSEZ : Krishnapatnam port - Inter and intra connectivity • Internal road network of 55 Kms • Connected by 25 kms long dedicated four-lane road with four lane NH-5 Chennai Kolkata corridor • Upgradation of the 4 lane to 6 lane road is in progress with ROW of 60 m 17 APSEZ : Krishnapatnam port - Inter and intra connectivity • Krishnapatnam Rail Co.