JSW Infrastructure IPO: JSW Infrastructure IPO opens for public subscription and will close on Wednesday, September 27, 2023. The bidding for anchor investors concluded on Friday, September 22, 2023, wherein the company collected Rs 1,260 crore. The price band for its public issue at Rs 113-119 per equity share of face value of Rs 2 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 2,800 crore from the IPO.
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The IPO comprises a fresh issue of 235,294,118 shares aggregating up to Rs 2,800 Crore. The lot size of the JSW Infrastructure IPO is 126 shares. The company intends to use the net proceeds from the IPO for prepayment or repayment, in full or in part, of all or a portion of certain outstanding borrowings through investment in the wholly owned subsidiaries, JSW Dharamtar Port Private and JSW Jaigarh Port, to finance capital expenditure requirements through investment in the wholly owned subsidiary, JSW Jaigarh Port, for proposed expansion and upgrade works at Jaigarh Port, i.e., i) expansion of the LPG terminal (LPG Terminal Project); ii) setting up an electric sub-station; and iii) purchase and installation of dredger. And also for financing capital expenditure requirements through investment in the wholly owned subsidiary, JSW Mangalore Container Terminal Private Limited, for the proposed expansion at Mangalore Container Terminal (Mangalore Container Project) and general corporate purposes.
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JSW Infra is the 2nd largest commercial port operator in India, handling 92.8mn MT in FY23 (43% CAGR over FY21-23). 63% of volumes is derived from JSW Group customers while the balance 37% is from 3rd party customers which it plans to further increase to achieve a balanced customer base. The company’s EBITDA rose at 31% CAGR (FY20-1QFY24) driven by volume growth. Royalty/T (1QFY24) was 3x of FY20. EBITDA/T dipped 10% over FY20-1QFY24. ROCE rose to 21.9% (1QFY24) from 7.9% (FY20) driven by doubling in capacity utilisation and start of operations of all port assets.
Should you apply for the JSW Infrastructure IPO?
Motilal Oswal Financial Services Recommends Subscribe: “We like JSW Infra given its dominant position among the port operators in India, along with its broad cargo profile and diversified geographical presence. The issue is valued at 19x 1QFY24 P/E on annualised and diluted basis, which looks attractive. We believe JSW infra could benefit from the government focus on port development, limited competition and strong parentage. Hence we recommend Subscribe.”
Mehta Equities recommends Subscribe: “Based on annualized FY24 earnings and fully diluted post-IPO paid-up capital, JSW Infra is asking price a P/E of 19x on the consolidated basis which seems the valuations are reasonably priced when compared to peers which are trading in the range of 28-30x. Given that JSW Infra is committed to expansion in India’s port and logistics infrastructure market by targeting 300 MTPA capacity across its ports and terminals by 2030e, we recommend investors ‘SUBSCRIBE FOR LONG TERM’ to JSW Infra IPO offer with a long-term perspective.”
Mehta Equities recommends Subscribe: “Given that JSW Infra is committed to expansion in India’s port and logistics infrastructure market by targeting 300 MTPA capacity across its ports and terminals by 2030e, we recommend investors ‘SUBSCRIBE FOR LONG TERM’ to JSW Infra IPO offer. We strongly believe that the JSW Infra IPO gives investors a long term opportunity to invest in the fastest-growing port-related infrastructure company and second largest port operator in terms of cargo handling in India. Being part of the reputable JSW Group, grants JSW Infra vital support and synergies with the group’s growing businesses. We think with the strong track record of profitability and growth, JSW Infra is well-positioned to benefit from the continued growth of the Indian economy.”
Marwadi Financial Services recommends Subscribe: “We assign ‘Subscribe’ rating to this IPO as the company is the fastest-growing port-related infrastructure company and the second largest commercial port operator in India. The company also benefits from a strong corporate lineage of the JSW Group along with strong financial metrics and growing margin profile, return metrics and growth. Also, it is available at a reasonable valuation as compared to its peers.”