JSW Infrastructure IPO entails to raise ₹2,800 crore and comprises entirely of a fresh issue of shares. The company promoted by Sajjan Jindal and the Sajjan Jindal Family Trust, SW Infrastructure Ltd is the fastest growing port-related infrastructure company and the second largest commercial port operator in India; measured in terms of cargo handling capacity.
| IPO opens | Sep 25, 2023 |
| IPO Closes | Sep 27, 2023 |
| IPO Size (Rs.) | ₹ 2,800 Cr |
| IPO Size (shares) | 235,294,117 Shares |
| Breakup | entirely fresh issue |
| Face Value: | ₹ 2/- |
| IPO Price in Rs : | ₹ 113 – 119 |
| Minimum Lot | 126 Shares |
| Anchor & QIB Quota | 75% |
| NII Quota | 15% |
| Retail Quota | 10% |
| Lead Manager | JM Financial, Credit Suisse, DAM Capital, HSBC Securities, ICICI Securities, Kotak Mahindra Capital, SBI Capital Markets |
| Registrar | KFin Technologies Ltd |
About JSW Infrastructure IPO:
- The Company was originally incorporated as ‘JSW Infrastructure & Logistics Limited’ on April 21, 2006.
- JSW Infrastructure operates 9 Port Concessions in India with an installed cargo handling capacity of 158.43 MTPA. The company’s cargo handling capacity in India has grown at an impressive CAGR of 15.27% over the last 3 years.
- Starting with one Port Concession at Mormugao in Goa that was acquired by the JSW Group in 2002, and thereafter commenced operations in 2004, it now has a basket of nine Port Concessions as of December 31, 2022.
- It operates and manages the ports and port terminals under nine concession and license agreements, and lease deeds with state maritime boards and/or major port trusts/authorities in India and under two O&M agreements in the UAE.
- JSW Infrastructure also has liquid storage tanks at their Jaigarh Port to store molasses and edible oil that are provided to customers under long-term rental arrangements.
- .In term of cargo capacity, Jaigarh Port was the largest capacity, followed by Dharamtar Port , Paradip Coal Exports Terminal, Paradip Iron Ore Terminal , South West Port Terminal Ennore Coal Terminal and New Mangalore Coal Terminal.
- The company provides port services for various types of cargo, including dry & liquid bulk, break-bulk container and other general cargo. Majority of cargo handled comprised of dry bulk cargo.
- Sajjan Jindal Family Trust holds 90.91-percent shareholding in port-related infrastructure company. However, the JSW Infrastructure Employees Welfare Trust, JSL, and Siddeshwari Tradex hold 9.08 percent of the shares in the firm.
Financials: JSW Infrastructure IPO
| Particulars / Rs. Cr. | 2023 (03) | 2022 (03) | 2023 (12) | 2022 (12) | 2021 (12) |
| Revenue from Operations | 878.1 | 819.7 | 3,194.74 | 2,273.06 | 1,603.57 |
| Revenue Growth (%) | 7.12% | – | 40.55% | 41.75% | – |
| EBITDA | 491.48 | 472.41 | 1,798.30 | 1,215.11 | 891.13 |
| EBITDA Margin (%) | 53.52% | 54.86% | 53.32% | 51.08% | 53.10% |
| Profit before Tax | 412.49 | 240.9 | 810.99 | 425.98 | 392.62 |
| Net Profit | 322.2 | 192.55 | 749.51 | 330.44 | 284.62 |
| Net Profit Margin (%) | 35.09% | 22.36% | 22.22% | 13.89% | 16.96% |
| Share Capital | 359.58 | 59.93 | 359.58 | 59.93 | 59.93 |
| Reserves | 3,946.51 | 3,353.68 | 3,635.05 | 3,212.19 | 2,831.24 |
| Net Worth as stated# | 4,306.09 | 3,413.61 | 3,994.63 | 3,272.12 | 2,891.17 |
| EPS – Basic (₹) | 1.78 | 1.06 | 4.12 | 1.82 | 1.62 |
| EPS – Diluted (₹) | 1.73^ | 1.05 | 4.01 | 1.81 | 1.62 |
| RONW (%) | 7.56% | 5.66% | 18.80% | 10.21% | 10.29% |
| Net Asset Value (₹) | 23.62 | 18.65 | 21.88 | 17.87 | 15.75 |
| ROCE (%) | 5.68% | 4.98% | 19.49% | 10.88% | 8.15% |
| Post issue Share Capital | 420 | ||||
| FV | 2 | ||||
| IPO price | 119 | ||||
| EPS Fy23 | 3.6 | ||||
| PE Fy23 | 33.3 | ||||
| EPS Fy24(ann) | 6.1 | ||||
| PE Fy24(ann) | 19.4 | ||||
| Market cap in Lacs | 24,990.0 | ||||
| Market Cap/sales | 7.8 |
Anchor: JSW Infrastructure IPO
JSW Infrastructure Limited raised ₹1,260 crore from 65 anchor investors, a day ahead of its IPO. 11 mutual funds have applied through a total of 28 schemes for the equity shares. Global marquee investors like Government of Singapore, Monetary Authority of Singapore, Morgan Stanley, Fullerton, HSBC Trustee, TA Global, The Master Trust Bank of Japan, Cohesion MK Best Ideas, Goldman Sachs, Theleme India Master Fund, BNP Paribas Arbitrage – ODI, and Principal Global participated in the anchor book. Domestic investors included Sunil Singhania-owned Abakkus, LIC Mutual Fund, SBI MF, ICICI Pru MF, HDFC Mutual Fund, Nippon Life India, Aditya Birla Sun Life Trustee, SBI Life Insurance Company, Sundaram Mutual Fund, UTI Mutual Fund, Tata Mutual Fund, Max Life Insurance Company, Bajaj Allianz Life Insurance Company, SBI General Insurance Company etc.
JSW Infrastructure IPO: Salient Points
- In last 9 fiscals, from Fiscal 2013 till Fiscal 2022, exports have grown with a compound annual growth rate (“CAGR”) of 7.6% and imports with a CAGR of 6.2% in value terms. Fiscal 2023 has registered a year-on-year growth of 16% in exports with a total value of Rs 36 trillion whereas imports registered a year-on-year growth of 24% with total value of Rs 57 trillion.
- Over Fiscal 2024 to Fiscal 2028, traffic at major ports is expected to be in the range of 3-6%, therefore maintaining a steady pace of growth.
- Over Fiscals 2024 to Fiscal 2028, CRISIL expects non-major ports to grow at 3-6%.
- The ports operated by JSW Infrastructure Ltd have fairly long concession periods ranging between 30 years to 50 years. This provides good visibility in terms of revenues.
- The company’s cargo handling capacity in India has grown at an impressive CAGR of 15.27% over the last 3 years.In FY23, JSW Infrastructure recorded profit growth of 126% on yoy to ₹749 crore, while revenue increased by 40 % to ₹3,194 crore during the same period
- Coal and iron ore make up about 85% of JSWIL’s cargo volume, while JSW Steel Limited contributes more than 50% of cargo volumes.
- Net Proceeds are proposed to be utilised towards the following objects:
- The company plans to use a part of of its net proceeds to reduce debt, which is positive to its already robust financial profile.
- A substantial portion of the total volume of cargo handled by it comprises coal and iron ore. Coal comprises of (i) thermal coal; and (ii) other than thermal coal (which includes coking coal, steam coal and others). The table below sets forth a break-down of total cargo volumes handled in India by type of cargo, for the periods indicated:
- Coal and iron ore make up about 85% of JSWIL’s cargo volume, while JSW Steel Limited contributes more than 50% of cargo volumes.
- Coal traffic would moderate over the medium term as thermal coal imports are expected to slow down with steady increase in production by Coal India Limited.
- The company has a diversified presence across India with Non-Major Ports located in Maharashtra and port terminals located at Major Ports across the industrial regions of Goa and Karnataka on the western coast, and Odisha and Tamil Nadu on the east.
- Company Port Concessions are also located in close proximity to its JSW Group Customers and are well connected to cargo origination and consumption points. This enables them to serve the industrial hinterlands of Maharashtra, Goa, Karnataka, Tamil Nadu, Andhra Pradesh and Telangana, and mineral rich belts of Chhattisgarh, Jharkhand, and Odisha, making their ports a preferred option for their customers.
- The company intends to pursue synergistic businesses such as development of container terminals, liquid storage terminals, container freight stations (“CFS”), multi-modal logistics parks (“MMLP”) and inland container depots (“ICD”) to enable them to provide end-to-end logistics solutions to their customers. They intend to develop or acquire new container terminals to handle container vessels to cater to the global trend of increase in containerized cargo.
- It is also seeking to enter the CFS/ MMLP/ ICD segments of the maritime infrastructure business to support container ports/ terminals and provide end-to-end logistic solutions.
- The company is part of the JSW Group, a multinational conglomerate with an international portfolio of diversified assets across various sectors, including steel, energy, infrastructure, cement, paints, venture capital and sports. Being a member of JSW Group, they received initial push up in cargo from their JSW Group Customers which facilitated fast ramping up of their assets and also better utilization of port capacities. One can expect JSW Infrastructure to continue to benefit from the growth of various businesses within the JSW Group in addition to other clients.
- This is an issue from JSW group after a gap of 13 years. JSW Infrastructure Limited will be the third company of from JSW Group to get listed on the bourses. The listed ones include JSW Steel and JSW Energy.
- Subsidiary, SWPL is currently the subject of a public interest litigation that is petitioning for closure of coal/ coke handling operations at the Mormugao Port in Goa due to the pollution caused by handling of coal/ coke at the port.
- As of the date of RHP, international credit rating services such as Moody’s and Fitch Ratings have assigned a “Ba2 / Positive” Corporate Family Rating and “BB+/ Stable”, respectively, to Company sustainability-linked bond, and Company short-term facility was rated “A1+” by CARE.
- JSW Infrastructure IPO is coming at a PE ratio of 33x (fy23 earnings) and 19x (Fy24 annualized based on Q1FY24)
- JSW Infrastructure IPO is priced at a P/BV of 5.04 based on its NAV of Rs. 23.62.
- Listed Peer Adani Ports & Special Economic Zone Ltd ,is trading at P/E of 24.2x.
- I intend to apply in JSW Infrastructure IPO. Though premium commanded is not high and issue is large one, In my opinion it is a case of not to be missed IPO.
- GMP as reported on social media is around Rs. 17.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.