Adani Ports and Special Economic Zone Limited (‘Adani Ports’ or ‘the Amalgamated Company 1’ or ‘the Transferor Company’) is a company incorporated under the Companies Act, 1956, in the state of Ahmedabad on May 26, 1998 vide corporate identification number as L63090GJ1998PLC034182 having its registered office situated at Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S. G. Highway, Khodiyar, Ahmedabad 382421. Adani Ports is India’s largest multi-port operator and developer with presence in various parts of India. It is a developer of a multi-product Special Economic Zone at Mundra, Gujarat. It possesses 2 business undertakings, viz. (i) Mundra Rail Business Undertaking; (ii) the Other Business Undertaking. The equity shares of Adani Ports are listed on the Indian stock exchange(s) viz. The National Stock Exchange of India Limited and the Bombay Stock Exchange. Further the secured non-convertible debentures and commercial papers issued by Adani Ports are listed on the Wholesale Debt Market segment of BSE Limited. Further, unsecured senior notes issued by Adani Ports are listed on the Singapore Exchange Securities Trading Limited. Also, some of the unsecured senior notes issued by Adani Ports are listed on the India International Exchange (IFSC) Limited.
Adani Tracks Management Services Private Limited (‘Adani Tracks’ or ‘the Amalgamating Company 2 ’) is a company incorporated under the Companies Act, 2013, in the state of Ahmedabad on July 31, 2019 vide corporate identification number as U45202GJ2019PTC109348 having its registered office situated at Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S. G. Highway, Khodiyar, Ahmedabad 382421. Adani Tracks has been incorporated with an object to carry on the business of development, establishment, construction, repairing, operations, maintenance leasing, consultancy and management and / or other services of any type in connection with the setting up railway tracks, railway sidings and management of railway projects. Adani Tracks is a wholly owned subsidiary of Adani Ports.
Brahmi Tracks Management Services Private Limited (‘Brahmi Tracks’ or ‘the Amalgamating Company 1’) is a company incorporated under the Companies Act, 2013, in the state of Ahmedabad on November 7, 2019 vide corporate identification number as U35100GJ2019PTC110704 having its registered office situated at Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S. G. Highway, Khodiyar, Ahmedabad 382421. Brahmi Tracks has been incorporated with an object to carry on the business of development, establishment, construction, repairing, operations, maintenance leasing, consultancy and management and / or other services of any type in connection with the setting up railway tracks, railway sidings and management of railway projects. Brahmi Tracks is a wholly owned subsidiary of Adani Rail Infra Private Limited and also Brahmi is holding entire share capital of Sarguja Rail.
Sarguja Rail Corridor Private Limited (‘Sarguja Rail’ or ‘the Amalgamated Company 2’ or ‘the Transferee Company’) is a company incorporated under the Companies Act, 1956, in the state of Ahmedabad on May 5, 2010 vide corporate identification number as U60200GJ2010PTC115649 having its registered office situated at Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S. G. Highway, Khodiyar, Ahmedabad 382421. Sarguja Rail has, inter alia, developed, operates and maintains 70 kms of a private railway siding from Parsa East & Kanta Basan coal blocks to the nearest Indian railway line i.e. Surajpur Road railway station, located in the northern central part of Hasdeo Arand Coalfield in Sarguja district of Chhasttisgarh. Brahmi Tracks holds 100% share capital of Sarguja Rail.
Current structure of the Adani Group is as under:
Management of the Adani Group along with its group Companies has decided to restructure business and shareholding of the group as under:
Transaction 1: Amalgamation of Brahmi Tracks with and into Adani Ports;
Transaction 2: Amalgamation of Adani Tracks with and into Sarguja Rail;
Transaction 3: Transfer of Divestment Business Undertaking of Adani Ports and vesting into Sarguja Rail as a going concern on a slump sale basis for lumpsum consideration
Restructuring of the group can be depicted as under:
Key features of the above transactions:
Key features | Transaction 1: Amalgamation | Transaction 2: Amalgamation | Transaction 3: Slump sale |
Appointed Date | April 1, 2021 | April 2, 2021 | April 2, 2021 |
Effective Date | Date of filling of certified copy of approving authority being NCLT with ROC | Date of filling of certified copy of approving authority being NCLT with ROC, immediately after effectiveness of Transaction 1 | Date of filling of certified copy of approving authority being NCLT with ROC, immediately after effectiveness of Transaction 2 |
Jurisdictional Authority(ies) | Securities and Exchange Board of India; BSE Limited; National Stock Exchange of India Limited; National Company Law Tribunal, Ahmedabad Bench; Registrar of Companies, Gujarat; Regional Director, Gujarat | ||
Consideration | Adani Ports to issue 100 shares to the shareholders of Brahmi Tracks for 708 shares held in Brahmi Tracks | Sarguja Rail to issue 100 shares to the shareholders of Adani Tracks for 2522 shares held in Adani Tracks | Lump sum consideration of INR 188.65 crores to be payable by Sarguja to Adani Ports |
Accounting Treatment | In the books of the Adani Ports –
| In the books of the Sarguja Rail –
| In the books of Sarguja Rail and Adani Ports – Pooling of interest method |
Taxation | Tax neutral transaction | Tax neutral transaction | As per Note 1. |
Note 1: Considering slump sale is made in Sarguja after it becoming wholly owned subsidiary of Adani Ports pursuant to Transaction 1, transfer of divestment business undertaking of Adani Ports into Sarguja can be claimed as exempt under section 47(iv) of the Income Tax Act, 1961. However, one can argue that divestment business undertaking is not akin to capital asset. In such a scenario, as per section 50B of the Income Tax Act, 1961, excess of consideration over and above tax net-worth of the divestment business undertaking would be taxable in the hands of Adani Ports as capital gains.
Pre and Post shareholding patterns of the group companies, pursuant to effectiveness of the Scheme:
Name of the Company | Pre-Scheme Shareholding | Post-Scheme Shareholding | ||
% Promoter Shareholding | % Public Shareholding | % Promoter Shareholding | % Public Shareholding | |
Promoter Holding Companies | ||||
Adani Ports and Special Economic Zone Limited | 63.43% | 36.57% | 64.65% | 35.35% |
Adani Tracks Management Services Private Limited | 100% | – | NA, since amalgamated | |
Brahmi Tracks Management Services Private Limited | 100% | – | NA, since amalgamated | |
Sarguja Rail Corridor Private Limited | 100% | – | 100% | – |
Resultant structure post approval of the Scheme is as under:
Purpose of group restructuring:
- Over the years, there has been growth in the logistic sector. The Government of India has also come out with various private participation schemes to efficiently meet the increasing demand in the logistics sector. With dedicated freight corridor implementation, the rail share is expected to increase meaningfully. Thus, there is a significant opportunity in developing the rail assets considering the growth demand and infrastructure build requirement.
- It is the objectives of Adani Ports to (i) to consolidate the rail asset under one entity which will diligently work for the development, maintenance and operation of existing and new railway lines across the country; (ii) tap private partnership opportunity for developing the first mile – last mile connectivity and increasing the network capacity for rail transport; and (iii) create center for excellence to bring best practices, operational efficiency, technology integration and common skill set.
- Through the scheme, following benefits are anticipated,
- Consolidation of the rail business, productive utilization of combined resources, operational and administrative efficiencies, economies of scale, reduction in overheads and other expenses, reduction in the multiplicity of legal and regulatory compliances and consequential creation of greater value for shareholders and all other stakeholders;
- Track footprints of Sarguja will supplement to Adani Ports strategy of providing end to end logistics for hinterland-to-hinterland cargo movement;
- Availability of expanded business pre-qualifications, increased net worth to enable to bid for larger and more complex rail infrastructure projects and provide better access to the funds for growth opportunity; and
- Benefits from the complimentary skills of the combines management team, which in turn would enhance the overall corporate capability, provide focused strategic leadership and facilitate better supervision of the business.
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