Is the Israel-Iran War a Billion-Dollar Threat to Adani Ports & SEZ?

The world is once again on the brink. With the war in Ukraine still raging and unrest simmering across the Middle East, a new conflict has plunged global geopolitics into deeper uncertainty.

Just days ago, tensions between India and Pakistan flared dangerously after a brutal terror attack in Pahalgam left 26 people dead. India swiftly launched Operation Sindoor, targeting terror camps across the border.

For a brief moment, there were serious fears that India and Pakistan, both nuclear-armed countries, might go to war. But both sides agreed to a ceasefire, which eased tensions.

But the fragile calm in South Asia has been overshadowed by a far more explosive conflict unfolding in the Middle East. On 13 June 2025, Israel launched a long-anticipated military operation against Iran, targeting key military and nuclear assets.

Since then, the Israel-Iran conflict has entered its fourth day, with no signs of de-escalation. Overnight missile exchanges have intensified, with Iran striking an Israeli oil refinery and crippling parts of its power grid.

In this geopolitical storm, Adani Ports and Special Economic Zone (APSEZ) has emerged as a company of keen interest on Dalal Street.

About Adani Ports and Special Economic Zone

Adani Ports and Special Economic Zone (APSEZ) is the largest commercial ports operator in India accounting for nearly one-fourth of the cargo movement in the country.

It has a presence across 13 domestic ports in seven maritime states of Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh, Tamil Nadu, and Odisha.

Through its subsidiary Adani Logistics, APSEZ operates three logistics parks located at Patli in Haryana, Kila-Raipur in Punjab, and Kishangarh in Rajasthan.

The company's is engaged in developing, operating and maintaining ports, ports-related infrastructure development, and the development of infrastructure at special economic zones.

On 16 June 2025, shares of Adani Ports and Special Economic Zone were in focus, amid ongoing conflict between Israel and Iran. Some reports suggested that the conflict between the two countries caused damage to Haifa Port in Israel.

However, Jugeshinder Robbie Singh, the Adani Group CFO, refuted the reports and said the damage reports were false. News agency PTI on Sunday reported that the the group's port is unaffected.

Late on Saturday night, tensions in the Middle East escalated further as Iran fired missiles at Israel's Haifa port and a nearby oil refinery. Debris from the attack reportedly landed in the chemical terminal of the port, while other projectiles hit the oil refinery.

While the incident raised immediate concerns, especially for Adani Group's operations in the region, media reports state the Adani-operated section of the Haifa Port was not impacted.

Despite the tense situation, it's business as usual at the port for now. As per reports, eight ships remained docked and cargo handling continued smoothly. Operations stayed on track, with no damage reported to infrastructure or logistics.

For now, Adani's key international port remains safe-even as the region braces for what comes next.

Adani Ports' Stake in Israel's Haifa Port

In 2023, the Adani Group made a high-profile international expansion by acquiring a 70% stake in Israel's Haifa Port for US$ 1.2 billion (bn), in partnership with Israel's Gadot Group, which holds the remaining 30%. The joint venture is set to operate the strategic port until 2054.

Haifa serves as a vital maritime gateway for Israel, handling more than 30% of the country's imports. While it contributes nearly 5% to Adani Ports and SEZ's revenue, it accounts for less than 2% of the total cargo volume managed by the company.

APSEZ, which handles around 10.57 million tonnes of cargo overall, has always positioned Haifa as a long-term strategic asset rather than a volume play.

However, the recent escalation in the Israel-Iran conflict has cast a shadow over the investment. The fear is that ongoing hostilities could delay cargo movements at Haifa and potentially disrupt global shipping routes.

The impact was already visible in the market on Friday. Shares of Adani Ports-one of the group's most profitable businesses dropped more than 3% intraday to Rs 1,396 before recovering slightly to close at Rs 1,405.25, a 2.71% decline.

While Haifa may represent a small portion of the group's operations, the geopolitical risk it carries now looms large.

What If Adani's Haifa Port Takes a Hit?

At the moment, Adani's Haifa Port is still up and running, with cargo ships docked and operations going on as usual. But there's a growing sense of unease.

What happens if things take a turn for the worse?

If the port were to suffer serious damage, the impact on Adani Ports could be significant. Early estimates suggest losses could range between US$ 1.9 bn and US$ 2.9 bn.

That includes the original US$ 840 million (m) poured into the deal, around US$ 50-100 m in annual revenue, and a potential hit of $1-2 bn in market value.

The longer the conflict continues, the more uncertain the returns on Adani's overseas bet become, raising the question of whether this bold global expansion will deliver long-term gains or turn into an expensive mistake.

Scaling Up Vizhinjam

APSEZ is set to invest Rs 130 bn to expand the Vizhinjam International Deepwater Seaport in Kerala's Thiruvananthapuram.

This next phase of growth, fully self-funded, comes on the back of successful trial runs and growing demand.

The port is already operating at 90% capacity, having handled 280 ships and 6.2 lakh TEUs since trial operations began in June last year.

With an initial Rs 70 bn already invested, the port's expansion is aimed at keeping up with rising transhipment traffic and unlocking its full potential.

3x Global Operations by 2030

Looking overseas, APSEZ is laying out bold plans to triple its international operations by 2029-30.

With major investments in Israel, Tanzania, and Sri Lanka, the company is aiming to handle 140-150 million metric tonnes (MMT) of cargo globally by the end of the decade. Domestic volumes are also expected to grow steadily, with capacity projected to reach 820-850 MMT.

To fuel this ambition, APSEZ is doubling down on key global assets, including Israel's Haifa Port, the under-construction port in Tanzania, and Colombo West International Terminal in Sri Lanka.

Conclusion

Indian port industry will grow at the rate of 4-7% over the next five years, supported by rising imports, a decline in freight costs, and the normalisation of global supply chains, according to a report by Motilal Oswal.

Along with its expansion plans, Adani Ports' is set to benefit from the growth of the industry as well.

But with the ongoing conflict in the Middle East and uncertainties surrounding its Haifa port investment, all eyes are on how global impact the company.

It's important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance.

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