New Delhi: JSW Infrastructure Limited, a subsidiary of the JSW Group, has filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) to raise approximately Rs 2,800 crore. The entire IPO will consist of a pure fresh issue of shares. The public issue is expected to generate Rs 880 crore, which will be invested in the company’s subsidiaries, JSW Dharamtar Port Pvt Ltd and JSW Jaigarh Port Ltd, to repay their debts.
JSW Dharamtar Port had a total debt of Rs 4,303.90 crore as of December 2022. A portion of the proceeds will also be used to finance the proposed expansion and upgrade of JSW Jaigarh Port Ltd. The LPG Terminal project will receive Rs 868.03 crore, an electric substation will be set up with Rs 59.40 crore, and a dredger will be purchased and installed with Rs 102.58 crore. JSW Infrastructure will also invest Rs 151.63 crore in its subsidiary, JSW Mangalore Container Terminal Pvt Ltd, to finance its capital expenditure requirements.
JSW Infrastructure provides a range of maritime services, including cargo handling, storage solutions, logistics services, and other value-added services to its clients. The company is expanding to become a comprehensive logistics solutions provider and develops and manages ports and port terminals under Port Concession agreements. These agreements have long periods, typically lasting between 30 to 50 years, which provide the company with a long-term outlook on revenue streams.
As of December 2022, JSW Infrastructure handles nine port concessions in India, with a cargo handling capacity of 153.43 MTA, while the cargo volume it handled was 61.96 MMT. Net debt as of December 2022 was Rs 2,875.31 crore while operating cash flow stood at Rs 1,095.27 crore. In FY22, revenue from operations was Rs 2,273.06 crore, compared to Rs 1,603.57 crore in the previous year. Net profit for the year was Rs 330.44 crore versus Rs 284.62 crore in the previous year. The EBITDA margin for the year was 51.08 per cent, compared to 53.10 per cent in the previous year.
JM Financial, Axis Capital, Credit Suisse, Dam Capital Advisors, HSBC, ICICI Securities, Kotak Mahindra Capital, and SBI Capital Markets are the lead managers for the IPO.
JSW Infrastructure, as a member of the JSW Group, has benefited from receiving initial cargo from its Anchor Customers, which helped to expedite the ramp-up of its assets and improve the utilization of its capacities. The company expects to continue to benefit from the growth of various businesses within the JSW Group. JSW Steel aims to increase its installed capacity from 27.7 MTPA in Fiscal 2023 to up to 37.00 MTPA in Fiscal 2025, while JSW Energy aims to achieve up to 10 GW in Fiscal 2025 from 4.8 GW in Fiscal 2023. JSW Infrastructure expects these expansions to increase cargo volumes across its current assets and provide a foundation for future growth at new locations.
In summary, the upcoming IPO of JSW Infrastructure will help the company raise capital to pay off debt and fund its expansion plans. The company’s affiliation with the JSW Group and its strong performance in FY22 suggest a promising future for the firm.
