Adani Ports’ latest deal revives old controversies—markets aren’t impressed
On Thursday, the Gautam Adani-promoted company said it would acquire Abbot Point Port Holdings Pte Ltd, the parent of North Queensland Export Terminal (NQXT), for AUD 3.98 billion (approximately ₹21,783.33 crore). The seller? Carmichael Rail and Port Singapore Holdings Pte Ltd—a Singapore-based entity controlled by the Adani family.
The deal will be funded by issuing 143.8 million equity shares, effectively transferring ownership of the Australian coal terminal back to Adani Ports from its promoters after more than a decade.
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While the acquisition promises to strengthen Adani Ports’ global footprint and push it closer to its 2030 cargo target, the transaction has raised sharp questions about governance, growth prospects, and environmental liabilities. Investors appear cautious: the stock is down 1.4% since the announcement, slipping as much as 4% intraday on Monday—the steepest two-day drop in two weeks.
The deal still awaits key approvals, including from minority shareholders, the Reserve Bank of India, and Australia’s Foreign Investment Review Board. But it’s already under the microscope for several reasons—chief among them, the nature of the asset being acquired.
NQXT is located within the Great Barrier Reef World Heritage Area and has long been a flashpoint for environmental groups and ESG-conscious investors. The terminal struggled to attract outside funding and needed the Adani family to step in and repay $500 million to bondholders in late 2022. It also lost a major access fee lawsuit in 2020, with the Queensland Supreme Court ordering over $100 million in damages to four companies, according to news reports.
Moreover, the fact that this is a related-party deal raises concerns about potential over- or under-valuation and alignment with minority shareholders’ interests.
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Valuation without growth?
From a valuation perspective, the numbers are puzzling.
NQXT was valued at 17x EV/Ebitda in FY13, when Adani Ports sold it to its promoter group. The FY25 estimate? Still 17x, according to the company’s presentation.
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In an 18 April note, Nuvama Institutional Equities, which has retained its buy rating on the Adani Ports stock, said the AUD 3.98 billion valuation (enterprise value, including AUD 819 million in net debt) is in line with that earlier deal, and comes at a discount to recent regional transactions, which have ranged at18–25x EV/Ebitda.
“So, at 17 times for an asset that’s seen virtually no growth, where is the future growth supposed to come from?” asked an analyst at a brokerage, requesting anonymity.
Some brokerages argue that growth will stem not from volumes but from pricing power.
NQXT has 40 million tonnes of contracted volume, and revenue is expected to reach AUD 349 million with an Ebitda margin of 65% in FY25, pointed out a report by Elara Capital dated 20 April.
“In the next four years, Ebitda is targeted to double to AUD 400 million, led by a rise in contracted capacity to 50 million tonnes via customer addition, contract renewals at higher price and group synergy,” said analyst Ankita Shah in the report.
Owning the terminal outright improves the economics, too.
According to Elara’s Shah, the shift from a 10% O&M margin to a 90% operating margin could drive substantial profit gains. With no major capex expected until 2030, the deal could also boost return on capital employed—though high depreciation costs may keep net profit gains modest in the near term.
Still, the funding structure remains a key question. The issuance of 143.8 million new shares implies a meaningful equity dilution. Nuvama estimates a 2% earnings per share dilution in FY26, but expects profits to recover from the second year onward as synergies kick in.
Strategically, the asset is important. NQXT sits close to the Bowen and Galilee coal basins and offers Adani Ports a stronger foothold in Asia-facing trade corridors.
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Motilal Oswal Financial Services, which has a buy rating on the stock, said in an 18 April note that the deal strengthens the company’s global footprint. The brokerage will update its growth forecasts once the acquisition closes.
But as the market reaction shows, scale isn’t everything. At a time when Adani Ports is trying to project global credibility and capital discipline, this deal revives old governance concerns—and those may take longer to shake off than a one-day bounce in the stock.
