JSW Infra IPO to Raise 2,800 Cr., Capacity Expansion Planned from Proceeds
JSW Infrastructure Ltd., a part of JSW Group, the Indian multinational conglomerate, has opened its Initial Public Offering (IPO) on 25th September 2023. The company expects to raise about Rs. 2,800 crore from the IPO, bulk of which has been earmarked for various expansion projects by the firm.
Brief Background of JSW Infrastructure Ltd.
JSW Infrastructure Ltd. was incorporated in 2006. The company provides services such as cargo handling, logistics, and storage services. JSW Infra operates 9 port concessions in India with a cumulative cargo handling capacity of 158.43 Million Metric Tonne Per Annum (MMTPA). Concession periods for these ports are long term, ranging from 30 years to 50 years. Apart from the ports in India, the company provides Operations and Maintenance (O&M) services for two ports in the UAE, which have a cumulative cargo handling capacity of 41 MMTPA.
The company reported a top line of Rs. 3,195 crore and a Profit After Tax (PAT) of Rs. 749.5 crore. for the 2022-23 financial year. Considering the period from FY-21 to FY-23, the company’s top line grew at an impressive Compound Annual Growth Rate (CAGR) of 41.15%, while JSW Infra’s PAT grew at a CAGR of 62.28% for the same period. The company’s major competitor in India is Adani Ports and Special Economic Zone.
IPO Offered in the Rs. 113-119 Price Band, JSW Infra to be Listed on NSE & BSE
JSW Infra’s IPO will be offered in the price band of Rs. 113 to Rs. 119, and it will stay open to potential investors from 25th September 2023 to 27th September 2023. JSW Infra’s IPO is a fresh issue of 23.53 crore shares, which have a face value of Rs. 2 per share. The minimum lot size for this IPO has been set as 126 shares, translating to a minimum investment of Rs. 14,994 for willing investors.
In the company’s IPO, 75% of the issued shares with a value of Rs. 2,100 crore are reserved for Qualified Institutional Buyers (QIBs). Out of these shares for QIBs, 60% are meant for anchor investors. Bidding for anchor investors was opened on 22nd September 2023, and about 10.59 crore shares were made available for them to bid for. Therefore, JSW Infra will raise about Rs. 1,260 crore from anchor investors which include Shamyak Investment Pvt. Ltd., Government of Singapore, SBI Contra Fund, HDFC Mutual Fund – HDFC Multi Cap Fund, and more.
Further, 15% of the IPO offering, translating to Rs. 420 crore worth of shares are for High Net-worth Individuals (HNI). The remaining 10% of the offered shares with a value of Rs. 280 crore are open to retail investors.
JSW Infra will be listed on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). The tentative listing date of JSW Infra on the stock exchanges is 6th October 2023.
JSW to Earmark Rs. 1,200 Cr. of the Raised Funds for CapEx
Speaking about the company’s utilisation of funds from its upcoming IPO, Mr. Arun Maheswari, joint MD and CEO of JSW Infrastructure Ltd. said, “Out of ₹2,800 crore, around ₹1,200 crore will go for capex. Around ₹900 crore will go for repayment of debt and balance ₹700 crore would be for general corporate purpose”.
JSW Infra to Develop 2 MMTPA LPG Terminal, Install Dredger at Jaigarh Port
JSW Infra’s CapEx will be directed towards several projects. At the company’s Jaigarh port, JSW will invest Rs. 865.75 crore for development of a 2 Million Metric Tonne Per Annum (MMTPA) LPG terminal through its subsidiary, JSW Jaigarh Port Ltd. This project entails construction of storage terminals, connecting pipe corridor along with auxiliary structures. The aforementioned storage terminals will comprise two cryogenic tanks each of 23,000 Tonne capacity. In FY-24, the company plans to invest Rs. 172 crore in this project, while Rs. 435.02 crore and Rs. 258.73 crore will be invested in this project during FY-25 and FY-26 respectively.
Further, purchase and installation of a dredger for Rs. 103.88 crore, and the establishment of an electric substation at a cost of about Rs. 59.4 crore for the Jaigarh port has been planned from the proceeds of JSW Infra’s IPO.
JSW Infra to also Expand its Mangalore Container Terminal
Apart from the aforementioned investment at Jaigarh port, the company will invest Rs. 151.04 crore for the proposed expansion of the company’s Mangalore Container Terminal, capacity of which currently stands at 4.2 MMTPA. JSW Infra’s concession agreement allows a maximum cargo handling capacity of 6.02 MMTPA. This investment will be done through JSW Mangalore Container Terminal Pvt. Ltd., a subsidiary of JSW Infra. Work on this expansion project started in September 2023, and is currently underway.
Investment in these projects will be made in the course of the coming two years.