India’s second largest private port operator, JSW Infra’s IPO to open on September 25

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India’s second largest private port operator, JSW Infra’s IPO to open on September 25
Source: IANS
  • JSW Infra has fixed a price band of ₹113-119 per equity share for its maiden public issue.
  • The IPO is entirely a fresh issue worth ₹2,800 crore, where promoters will not sell their shares.
  • Investors can bid for a minimum of 126 equity shares and in multiples of 126 thereafter.
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JSW Infrastructure will open its initial public offer (IPO) on September 25 and close on September 27. It has fixed a price band of ₹113-119 per equity share.

The Sajjan Jindal-led steel-to-power group is unlocking value from its ports business after a gap of 13 years. Its power business, JSW Energy, went public in 2010.

JSW Infra is India’s second largest private port operator after Adani Ports & SEZ. In a rare move, the public issue is entirely a fresh issue worth ₹2,800 crore, where promoters will not sell their shares.

With the IPO proceeds, the company intends to prepay or repay ₹880 crore of its outstanding borrowings; finance capital expenditure requirements amounting to ₹865.75 cr for an LPG Terminal Project. It intends to use the rest to set-up an electric sub-station, purchase and install a dredger and expand at Mangalore Container Terminal besides general corporate purposes.

Investors can bid for a minimum of 126 equity shares and in multiples of 126 thereafter.

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The issue is being managed by eight investment banks — JM Financial, Axis Capital, Credit Suisse Securities (India), DAM Capital Advisors, HSBC Securities and Capital Markets (India), ICICI Securities, Kotak Mahindra Capital, and SBI Capital Markets are the book running lead managers. KFin Technologies is the registrar to the Issue.

The shares are proposed to be listed on BSE and NSE.

Nine ports in India, 2 abroad

The company expanded from one port in Mormugao in 2002 to nine ports as of June, 2023. Its ports are present in Maharashtra, Goa, Karnataka on the west coast, and Odisha and Tamil Nadu on the east coast.

It also operates two port terminals under operations & maintenance agreements in Fujairah Terminal and Dibba Port in the UAE. It also plans to expand its operations through brownfield and greenfield projects.

It also has a third party cargo business in India and witnessed a compounded annual growth rate of 65% between FY21 to FY23.
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Financials & risk factors

The company’s revenues and profits have been steadily growing for the last three years as detailed below. Its total debt as of June 2034 is at ₹4,228 crore.

ParticularsFY23FY22FY21
Revenue from operations₹3,194 crore₹2,273 crore₹1,603 crore
Net profit₹810.9 crore₹425.9 crore₹392.6 crore

Source: RHP

Apart from operating in a capital-intensive industry and reliance on top five customers – two of whom are related parties; the company cited reliance on concession and license agreements from government and quasi-governmental organizations — as its risk factors.

It may not have marketable titles over some of the land it occupies. “We also occupy certain land on a leasehold basis, including the land on which we propose to set up the terminal for handling LPG products, by utilizing the net proceeds. In addition, we use our registered and corporate office on a co-sharing basis with other members of the JSW Group,” it said adding a failure to renew existing arrangements may have a material effect on its business.
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Its business is subject to extensive environmental and other related regulations and policies. The environmental clearance for capacity enhancement issued to its subsidiary, South West Port Limited has been challenged before the National Green Tribunal and is subject to the outcome of certain other litigations.

The company has six tax proceedings against it, which amounts to ₹28.2 crore. One tax and one regulatory proceedings are pending against its directors amounting to ₹311 crore. Its promoters also have one pending tax proceedings amounting to ₹302 crore.

Its subsidiaries have undertaken one criminal proceeding and six material proceedings amounting to ₹17.2 crore. One criminal, 22 tax and two regulatory proceedings and five material proceedings against its subsidiaries are ongoing amounting to ₹175.9 crore.
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