Chennai Port Authority has granted in-principle approval to divest a stake in its wholly owned subsidiary Kamarajar Port Ltd through an Initial Public Offering (IPO), with the size of the issue to be determined based on valuation and price band, sources said.
The decision was taken at a board meeting held on March 6. As part of the proposed IPO plan, the board has also directed Kamarajar Port Ltd to issue bonus shares to Chennai Port Authority from its reserves and surplus, estimated to exceed ₹3,000 crore by the end of the current fiscal. The move is aimed at protecting the interests of the parent authority, which currently holds 100% equity in the port company.
Kamarajar Port Ltd had reserves and surplus of ₹2,759.95 crore as of March 31, 2025, which is expected to rise further. The issuance of bonus shares will require an increase in the company’s authorised share capital, currently at ₹500 crore, with a paid-up capital of ₹300 crore fully held by Chennai Port Authority.
The board noted that Kamarajar Port Ltd does not require immediate resource mobilisation for its growth plans, given its strong reserves and manageable capital expenditure needs. The surplus funds, therefore, are proposed to be passed on to the parent authority through bonus shares.
Proceeds from the IPO will be utilised by Chennai Port Authority to repay ₹843 crore loan taken from State Bank of India for acquiring the Government’s 67% stake in Kamarajar Port Ltd in 2020. The funds will also be used to bridge the pension fund deficit of the port authority, currently estimated at ₹2,582 crore.
The IPO size will be limited to meeting these financial obligations. The board has also indicated that Kamarajar Port Ltd may explore follow-on public offers in the future to raise funds for expansion, subject to approvals.
Earlier, the Ministry of Ports, Shipping and Waterways had granted in-principle approval for the IPO, following which the proposal was endorsed by the board of Kamarajar Port Ltd and sent to Chennai Port Authority for ratification.
Kamarajar Port Ltd, located near Chennai, is India’s only state-owned port operating under the Companies Act. Once listed, it will become the first such port to go public, joining listed peers such as Adani Ports and Special Economic Zone Ltd, JSW Infrastructure Ltd, and Gujarat Pipavav Port Ltd.