JSW Infrastructure gears up for ₹2,800-crore IPO, broadens focus on third-party businesses

JSW Infrastructure, the ports business of JSW Group, is set to launch its initial public offering (IPO) on Monday, September 25. The company, India's second-largest commercial port, has priced the IPO in a band of ₹113-119 ($1 = ₹83.05) per share and aims to raise ₹2,800 crore ($372 million), as announced by Arun Maheshwari, joint managing director and CEO.

The Mumbai-based firm is shifting its focus towards third-party businesses while maintaining robust volumes from its group companies. After being a captive player for the JSW Group for 15 years, JSW Infrastructure has increased its attention on external clients. Maheshwari stated that the company plans to continue this strategy and expand into more containers, liquid and gas sectors through a mix of bidding terminals in government ports and greenfield expansions.

JSW Infrastructure's business composition has evolved over time, with third-party cargo now accounting for 37% of its operations compared to just 6% in 2019. Maheshwari expressed that any port company requires an anchor customer to build its assets and that ideally they would like to achieve a 50:50 ratio between group companies and third parties.

The proceeds from the IPO will be allocated towards various purposes. A sum of ₹1,200 crore will be invested in expansions while about ₹900 crore will be used to repay loans. The remaining ₹700 crores are earmarked for general corporate purposes.

JSW Infrastructure was incorporated in 2006 and provides maritime-related services such as cargo handling, storage solutions and logistics services. It develops and operates ports and port terminals under long-term concessions ranging between 30-50 years. The firm handles various types of cargo including dry bulk, break bulk, liquid bulk, gases and containers.

The company has a presence across India with ports located in Maharashtra and port terminals across the industrial regions of Goa and Karnataka on the west coast, and Odisha and Tamil Nadu on the east coast. Internationally, JSW Infrastructure operates two terminals at Fujairah and Dibba in the UAE.

For the financial year ending March 31, 2023, the company reported a net profit of ₹749.51 crore with a revenue from operations of ₹3,372.85 crore. This marks an increase from the previous fiscal year when it posted a net profit of ₹330.44 crore with a revenue of ₹2,378.74 crore.

The IPO is entirely a fresh issue with 75% of the net offer reserved for qualified institutional bidders (QIBs), non-institutional investors (NIIs) getting 15% of the allocation, and the remaining 10% going to retail investors. The bidding process will conclude on Wednesday, September 27.

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