Private equity firms KKR, Blackstone and Aion Capital are among the 10 entities that have envisaged interest in Dighi Port, the first port to land up in the National Companies Law Tribunal (NCLT) under the insolvency law, media reports.
The three firms bid in partnership with the local players, sources told the paper. “The bid condition stated that parties should have prior experience in the sector. The three PE players are just sleeping partners of consortiums. One of the PE firms is bidding with Euroports, one of the largest and most diversified port operators in Europe,” a source told the media.
The firms have been very aggressive in their bidding processes, the report said, adding that their bids are 42-48 percent higher compared to those by other core industry players.
PE firms like Ascent Capital Advisors, Standard Chartered Private Equity and 3i Group have invested in other Indian ports like Karaikal and Krishnapatnam during FY07-09. They exited India’s port sector between FY15 and FY16.
Port traffic is expected to grow 3-5 percent in FY20 and the scope for PE participation is very limited, according to Hetal Gandhi, Director at CRISIL Research. “However, port specific dynamics such as region, commodity mix, traffic demand among others determine the prospects of PE investments,” she added.
Others bidding for Dighi Port are JSW Infrastructure, Adani Ports and South Korean firm Posco with Jawaharlal Nehru Port Trust. They sent their expressions for the port on September 21 and the bids will be opened on October 10.
Dighi Port owes nearly Rs 1,600 crore to lenders, led by Bank of India. Balaji Infra Projects owns 51.01 percent stake in the port; IL&FS, which is also one of the lenders, owns 39.37 percent and Tara India Fund III holds 5.46 percent. CARE Ratings ranked the port as ‘default’ in April last year.
The port, located in Raigad, Maharashtra, is spread over 1,600 acres and has an oil tank farm. It has been developed by Balaji Infra under a 50-year concession agreement with the state’s maritime board. Of its 30 million tonne capacity, only two million tonne has been utilised.
It is considered a good investment opportunity as it is a part of the Delhi-Mumbai Industrial Corridor and National Investment & Manufacturing Zone. However, due to poor road connectivity, it has not been utilised over the years, sources told the paper.