OVERVIEW:

• Adani Ports and Special Economic Zone Ltd (APSEZ) has proposed a significant investment of Rs.1,689 crore for the establishment of Poseidon Leasing IFSC Ltd, a step down subsidiary company, to operate within the GIFT SEZ.

• This strategic move marks their venture into ship leasing activities, encompassing both operating and financial leases of ships, ocean going vessels and related components

ABOUT POSEIDON LEASING IFSC LTD:

• Poseidon Leasing IFSC Ltd has been set up under the umbrella of another APSEZ subsidiary ,Shanti Sagar International Dredging Ltd (SSIDL), which will hold full ownership of Poseidon.

• It will primarily focus on ship leasing activities, including operating leases or financial leases of ship, ocean going vessels, and related components.

• The newly formed entity will boast an authorized and paid up capital of Rs. 2 crore, divided into Rs.25,00,000 equity shares of Rs. 10 each.

• The company’s board of directors is yet to be finalised, with three directorial positions proposed for appointment.

WHY GIFT CITY?

• The decision to venture into ship leasing at GIFT City comes amidst Adani’s active expansion of its network of ports and terminals across India.

• The establishment of Poseidon Leasing IFSC is expected to further consolidate Adani’s presence in the maritime domain, leveraging the incentives and exemptions provided by the GIFT SEZ.

• Establishing a ship leasing entity within GIFT City holds strategic significance as it enables Indian Firms to conduct transactions in foreign currency, thus attracting companies that previously operated overseas due to regulatory and tax consideration.

• The decision to set up ship leasing operations at GIFT City aligns with the broader trend of Indian entities seeking regulatory clarity and tax incentives domestically, rather than opting for offshore location like Dubai or Singapore.

TAX BENEFITS IN GIFT CITY:

• GIFT City offers various tax breaks including income tax waivers for up to 10 consecutive y ears within the first 15 years of operation.

• Along with exemptions on input GST for services procured from Indian or non resident vendors .

CONCLUSION:

• The move by Adani Ports to invest in ship leasing reflects a broader trend of Indian companies exploring opportunities within GIFT City,

• It is aiming to capitalise on the growing demand for maritime services and leverage the benefits offered by the IFSC ecosystem.

• With an estimate $75 billion spent annually on seaborne freight to foreign shipping companies and a global charter hire market valued at $100 billion, the emergence of GIFT City as a hub for ship leasing activities promises significant opportunities for Indian companies to capitalized on the growing maritime sector while benefiting from favourable regulatory and tax frameworks.

• Reliance Industries has also ventured into the ship leasing domain at GIFT City with a substantial investment totaling Rs. 22,033 crore.