NEW DELHI: Adani Ports and Special Economic Zone Ltd (APSEZ) is acquiring Oiltanking India GmbH’s 49.38% equity stake in Indian Oiltanking Ltd (IOTL), one of India’s largest developer and operator of liquid storage facilities, for Rs 1,050 crore.
This agreement also includes acquisition of an additional 10% equity stake in IOT Utkal Energy Services, a 71.57% subsidiary of IOTL. With this acquisition, APSEZ’s oil storage capacity jumps 200% to 3.6 Mn KL, making Adanis India’s largest third-party liquid storage company.
“This ties well with our ambition to become the largest transport utility globally,” said Karan Adani, CEO and whole-time director of APSEZ. “This stake purchase is also well aligned with our strategy of diversifying the cargo mix with focus on products and services having higher realisation and margins. The deal will further strengthen our strategic partnership with IOCL, a key stakeholder and India’s largest refiner and customer of oil storage tanks.”
As per a regulatory filing by the APSEZ, IOTL has built a network of six terminals across five states with a total capacity of 2.4 Mn KL (owned capacity of 0.5 Mn KL and BOOT capacity of 1.9 Mn KL) for storage of crude and finished petroleum products in the past 26 years.
The Adani firm said IOTL is on a growth spree given increasing demand for oil products in the country. It recently signed a 25-year BOOT contract with Numaligarh Refinery for construction, operation, and maintenance of 0.6 Mn KL crude storage tanks at the Paradip Port. Besides, the company is also negotiating on various other large projects, both at existing facilities and new locations.
“Majority of IOTL’s tank capacity is contracted by reputed PSUs and oil majors. With nearly 80% of IOTL’s capacity under ‘Take-or-Pay’ contract, there is a good visibility on the future cash flows of the company,” said APSEZ. In FY22, IOTL’s revenue and EBITDA were Rs 526 crore and Rs 357 crore, respectively.