Gujarat Pipavav gives up early gains as APM Terminals looks to offload stake

NEW DELHI: Shares of Gujarat Pipavav gave up early gains to settle lower on Thursday amid reports that APM Terminals, the manager and operator and a controlling shareholder of Gujarat Pipavav Ports ( GPPL), was looking to exit its 12-year flagship investment.

The scrip rose nearly 4 per cent and touched its intraday high of Rs 150. But the scrip eventually closed the day at Rs 143.75, down 0.42 per cent.

According to reports, the company has mandated HSBC to run a formal sale process and find a new buyer as it no longer fits into the company’s core global business strategy.

APM owned 43.1 per cent of GPPL and as per Tuesday’s market capitalisation, valued at Rs 2,985 crore.

As per rules, the potential buyer will need to make a mandatory open offer to minority shareholders for an additional 26 per cent stake.

Refusing to comment on what he termed as “market rumours and speculation”, a company spokesperson told ET, “APM Terminal’s strategy is to continuously review and optimise its existing global portfolio as well as explore new investment opportunities. We are always looking at opportunities to grow the business and improve shareholder value."

A spokesperson for Gujarat Pipavav declined to comment.

The company reported a 33 per cent increase in net profit for the January-March quarter at Rs 66 crore over last year.

In FY17, the company posted a net profit of Rs 250 crore on revenue of Rs 683.10 crore. Total revenues grew 8 per cent to Rs 174.6 crore while Ebitda ( earnings before interest, tax, depreciation and amortisation) rose 16 per cent to Rs 114.7 crore.