Adani Ports Evaluates 20 Global Assets, Rules Out UK's AB Ports Over Returns

Adani Ports and Special Economic Zone (APSEZ) is currently evaluating 20 maritime assets globally for potential acquisitions, maintaining a focus on developed markets. However, the company has ruled out pursuing UK port operator Associated British Ports (AB Ports) after the asset failed to meet its return-on-capital expectations.

Speaking during the company’s earnings call, APSEZ Chief Executive Officer Ashwani Gupta stated that while AB Ports was evaluated, it did not fit the company's financial criteria. He emphasized that the firm aims to avoid acquisitions for the sake of expansion alone, seeking deals that deliver returns matching or exceeding current levels at APSEZ.

The company is continuing feasibility studies across multiple countries, including an assessment process in Oman. No investment decisions have been finalized for the 20 assets currently under review. APSEZ's international acquisition strategy centers on identifying cargo mix and potential returns prior to capital commitment. Containers remain the primary focus, alongside liquid terminals as ports increasingly serve as energy transition gateways.

According to Gupta, APSEZ handles over 140 types of liquid cargo and evaluates opportunities from a commodity perspective before assessing the underlying asset and return profile.

Alongside its international evaluations, APSEZ is increasing investments within India. The company has raised its FY27 capital expenditure guidance to ₹15,000-17,000 crore, up from the previous range of ₹12,000-14,000 crore. This revision represents a ₹3,000 crore increase at both ends of the range. During the first half of FY27, the company reported a capital expenditure of ₹10,521 crore.

Gupta clarified that the higher investment guidance is driven by accelerated domestic projects and excludes any international capital expenditure, even for organic expansion. Ports earmarked for accelerated investment include Mundra, Dhamra, Hazira, and Vizhinjam.

Capacity utilization at Mundra averaged nearly 92 percent in the first two quarters of the fiscal year, with certain terminals operating above 100 percent. Based on these utilization rates and Indian economic growth fundamentals, the company is accelerating domestic investments, including the launch of CT-5 at Mundra in the coming weeks.

Reflecting these projections, APSEZ also upgraded its FY27 revenue guidance to ₹44,000-46,000 crore and its earnings before interest, taxes, and amortisation (EBITA) guidance to ₹26,000-27,000 crore, raising both metrics by ₹1,000 crore.

"Adani Ports' decision to walk away from the AB Ports acquisition demonstrates financial discipline over mere international expansion. By refusing to compromise on return-on-capital expectations, the management is signaling prudent capital allocation. At the same time, upgrading domestic capital expenditure and revenue guidance reflects strong confidence in India's macroeconomic fundamentals and high utilization rates across key domestic ports like Mundra." — Dr. Shishir Gupta, Founder & CEO, StartupLanes