Adani Ports shares jump 3% on plan to buyback debt securities

Adani Ports and Special Economic Zone (APSEZ), one of the country’s leading port and logistics companies, remained on focus on Thursday after the Adani Group company unveiled a plan to partially buyback its debt securities, subject to market conditions. The board of the company will meet on April 22 to consider partial buyback of its rupee or U.S. dollar denominated bonds in the current financial year, APSEZ said in an exchange filing on Wednesday. The company, however, did not disclose the size of the buyback.

“A meeting of the Board of Directors of Adani Ports and Special Economic Zone Limited is scheduled on Saturday, April 22, 2023, to consider first and a partial buyback of certain of its debt securities, either denominated in INR or USD, in this financial year, subject to market conditions,” it said in a BSE filing.

Reacting to the news, APSEZ shares opened 0.4% lower at ₹661.30 against the previous closing price of ₹658.45 on the BSE. However, the stock soon gained momentum and rose 3% to hit a high of ₹678.40, while the market capitalisation rose to ₹1.44 lakh crore. There was a surge in volume as 3.7 lakh shares changed hands over the counter on the BSE in the first two hours of trades so far as compared to two week average volume of 2.99 lakh stocks.

Adani Ports share currently trades 31% lower than its 52-week high of ₹987.90 touched on September 20, 2022, while it rebounded 71% from its 52-week low of ₹394.95 touched on February 3, 2023, amid broad-based sell-off across Adani group stocks following a report by the U.S.-based short-seller Hindenburg Research.

In the last one year, APSEZ shares have delivered a negative return of 19%, whereas it lost 18% in the past six months. In the calendar year 2023, the stock has fallen nearly 19%, while it gave flat returns in the last one month. The stock gained over 2% in a week.

Meanwhile, other nine listed entities of Gautam Adani-led conglomerate were trading mixed, with Adani Green, Adani Wilmar, and Ambuja Cements trading marginally higher. On the other hand, Adani Enterprises, the flagship of Adani Group, was trading marginally lower along with other peers such as Adani Power, Adani Total Gas, Adani Transmission, and NDTV.

In February this year, Adani Ports paid ₹1,500 crore loan, including ₹1,000 crore to SBI Mutual Fund and ₹500 crore to Aditya Birla Sun Life Mutual Fund, and promised to repay more as part of the group strategy to improve its credit profile, which may ease investors' concerns about the conglomerate’s debt levels and repayment capabilities.

Earlier this month, APSEZ in a regulatory filing said that it clocked a 9% year-on-year (YoY) growth in its cargo volumes at 339 MT (million tonnes) for the fiscal year ended on March 31, 2023. This was the largest ever cargo volume ever recorded by the company. In March, the company registered a 9.5% YoY growth by handling 32 million tonnes of cargo volumes. For the first time since July 2022, the volumes crossed the 30 million tonne mark.

The overall container volumes handled by Adani Ports in India jumped 5% YoY to approximately 8.6 MTUs (million twenty-foot equivalent units), including approximately 6.6 MTUs at Mundra Port alone. Mundra Port handled a total cargo of 155 million tonnes in FY23. The container rakes handled during the year surged 24% YoY, thus achieving a new milestone by crossing 5,00,000 TEUs, while the bulk cargo transported exceeded 14 million tonnes, implying 62% Y-o-Y jump.

According to the company, Mundra Port handled the deepest container vessel – MSC Washington with an arrival draft of 17.0 meters – ever handled by any Indian port, and the largest vessel, MSC Fatma, with a vessel length of 366 m and carrying capacity of 15,194 TEUs. The port also docked its first LNG-fueled vessel, Aframax Crude Oil Tanker, at its SPM facility. The draft is 14 meters long with a total displacement of 1,26,810 MT.