Krishnapatnam Port Company Limited

Nature of the business

Krishnapatnam Port Company Limited (“Krishnapatnam Port”) is a natural, deep water port on India’s East coast, located in Andhra Pradesh. It operates the port on a “landlord port” model, under a 30-year concession agreement (extendable to 50 years) with the Andhra Pradesh state government, signed in September 2004. The port is capable of handling four types of cargo: iron ore, coal, general cargo and container traffic.

Investment rationale

The port sector in India is attractive, with strong forecast growth driven by India’s rapidly expanding international trade and current port capacity constraints.

Krishnapatnam Port is located close to the primary hinterland of its base cargo of iron ore and coal, providing high visibility of throughput and revenues.

The port is an all weather port with best-in-class infrastructure. Its competitive advantages include a deep draft, high levels of mechanisation, a wide turning radius, a large land area (c. 6,000 acres) and good rail and road connectivity.

Krishnapatnam Port is classified as a minor port and as such has the flexibility to set tariffs based on market dynamics. By contrast, tariffs at major ports are controlled by the government.

Finally, the business is backed by a strong promoter with a well established track record, managed by an experienced and capable team with a good relationship with 3i.