JSW Infrastructure – About the Company

JSW Infrastructure is providing a wide range of maritime services that includes cargo storage, handling, logistics services, and other value-added services to its clients. As per the CRISIL Report, JSW Infrastructure is the second largest commercial port operator in India in terms of cargo handling capacity and fastest growing in terms of installed cargo handling capacity and cargo volumes handled between fiscal 2020 and fiscal 2022.

JSW Infrastructure is a part of the Sajjan Jindal-ledJSW Group, a multinational conglomerate with an international portfolio of well-diversified assets across different sectors, including energy, steel, infrastructure, cement, etc. Initially, from one port Concession at Mormugao, Goa acquired by the JSW Group in 2002 and started operations in 2004, JSW Infrastructure became a nine Port concession as of December 31, 2022, throughout the India, making it a well-diversified maritime port company.

As of December 2022, JSW Infrastructure while handling the nine port concessions in India, handled a cargo volume of 61.96 MMTwith a cargo handling capacity of 153.43 MTA. Apart from having operations in India, it is also operating two port terminals under O&M agreements for a cargo handling capability of 41 MTPA in the UAE. The company operates all the ports with agreements of between 30 to 50 years which ensures long-term revenue visibility for the company.

To expand its business operations and increase the installed capacity of its cargo handling and other business offerings, JSW Infrastructure is looking to raise funds through the IPO with the entire issue will be a pure fresh issue to raise fund around Rs 2800 crore.

JSW Infrastructure IPO Objectives

The main objective of JSW Infrastructure IPO is to expand the capacity of its port for cargo handling and paying debts. Out of the total fund raised through public issues, Rs 880 crore will be used to invest in its arm JSW Dharamtar Port Pvt Ltd and JSW Jaigarh Port Ltd for repayment of their debt.JSW Dharamtar Port has debt of total amounting Rs 4303.90 crore.

Further, the part of fund will be used to finance the capital expenditure requirement for the proposed expansion and upgrade of its arm JSW Jaigarh Port Ltd. Out of the total fund, Rs 868.03 crorewill be used for the LPG Terminal project, Rs 59.40 croreto set up an electric substation, Rs 102.58 crore will be utilized for the acquiring and installing of dredger.

And furthermore, to meet the capital expenditure requirement of its arm JSW Mangalore Container Terminal Pvt Ltd, it will useRs 151.63 crore. Finally, the remaining amount of the IPO fund will be used for general corporate purposes.

JSW Infrastructure IPO Details:

JSW Infrastructure IPO Issue Price & Size

The issue price of JSW Infrastructure IPO will be in the range of Rs. 113 to Rs. 119 Per Share. The issue size of the JSW Infrastructure IPO will be around Rs 2,800 crore. And the entire issue size of IPO will be a pure fresh issue and the fund will be used to fund the capital expenditure requirement and repay outstanding borrowings of its wholly owned subsidiaries, and for remaining for the general corporate purposes.

JSW Infrastructure IPO Launch Date

JSW Infrastructure IPO launch date has been announced and the issue will be open for subscription from September 25, 2023, and will close on September 27, 2023. The minimum application while applying for this IPO is 126 shares and thereafter in the multiple of the same.

JSW Infrastructure Financial Statements:

JSW Infrastructure Financial Performance

In the last three to four years from FY20 to the first nine months of FY23,JSW Infrastructure has registered a CAGR growth of more than 25% in revenue. The sales of the company were 1143.15 crore in FY20 and increased to Rs 22.79.44 crore in the nine months of FY23.

Though, the operating expenses of the company also surged at CAGR of 34.40% during the same period which dented the EBITDA margin of the company bringing it down from 62.41% to 55.65%. However, the EBITDA of JSW Infrastructure registered a CAGR growth of 19.40% for the same period.

The Profit After Tax (PAT) of the company stood at Rs 447.24 crore in 9 months of FY23 from Rs 196.33 crore in FY20. The PAT has grown at a CAGR of 18.90% for the same period, while the PAT margin has improved from 17.19% to 19.62% during the same period. Compare to revenue, the PAT growth was less due to high-interest costs that rose from Rs 277.46 crore to Rs 459.81 crore.

JSW Infrastructure IPO Promoters & Shareholding of the Company

Sajjan Jindal and Sajjan Jindal Family Trust are the promoters of the company holding around 92% of the shares in the company. Other shareholders are as follows:

Why Invest in JSW Infrastructure IPO?

JSW Infrastructure is no doubt part of a well-diversified multinational conglomerate the Sajjan Jindal-led JSW Group. Backed by strong management and encouraging financial growth, JSW Infrastructure can be a good option while investing in IPOs.

In the context of the same, we have covered a few points on why should you invest in the JSW Infrastructure IPO with the strength that will drive the growth of the company in the future and risk factors the JSW Infrastructure can face while operating its business.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Strengths:

• As per the CRISIL report, in FY24, over fiscal 2023-2028 the growth of container traffic is likely to grow by 5-8%. In the medium term, low container traffic per capita in India and containerization's inherent benefits like cost-effectiveness will drive the growth of container traffic.
• The report also says, between FY23 and FY27, non-major ports are expected to enhance 100-130 million tonnes of capacity. The container segment is expected to dominate in terms of tonnage and JSW Infrastructure is the second-largest commercial port operator in India.
• The company develops and operates ports and port terminals under Port Concessions. It's ports and port terminals enjoy long concession periods ranging from 30 to 50 years, offering it a long-term outlook on revenue streams.
• At the end of Dec 2022, the capacity-weighted average balance concession period of JSW Infrastructure at operational ports and terminals is about 25 years. Out of which Jaigarh Port, one of its largest assets, operating with a balance concession period of 35 years.
• Being a part of an infra & energy diversified conglomerate, JSW Infrastructure is likely to get benefit from the growth of various businesses within the JSW Group. Like JSW Steel is looking to expand its installed capacity from 27.7 MTPA in Fiscal 2023 to 37.00 MTPA in Fiscal 2025.
• Likewise, JSW Energy is also looking to enhance the capacity up to 10 GW in Fiscal 2025 from 4.8 GW in Fiscal 2023. With such expansions from its group companies, the growth of cargo volumes across its current assets is also likely to grow which will offer a foundation for future growth at new locations for the JSW Infrastructure.
• JSW Group is a multinational conglomerate with well-diversified assets across several sectors including energy, infrastructure, steel, cement, paints, venture capital, and sports. And being a part of the JSW Group, JSW Infrastructure has benefited from getting the cargo supply from its Anchor Customers, which helps it to accelerate the expansion of its assets and improve capacity utilization.
• At the financial end, the revenue growth of JSW Infrastructure is quite impressive. In the last three years, it has registered a CAGR growth of 25.70% in revenue, while the Net Profit of the company grew by 18.9% for the same period.
• However, the operating profit margin of the company was slightly down from 62.41% in FY20 to 55.65% in FY23, but the net profit margin of the company improved from 17.19% to 19.62% for the same period. And it will also improve due to low-interest costs after reducing the debt y IPO.

Risks:

• A considerable portion of the volume of cargo handled by the company is mainly dependent on a few types of cargo, and any kind of reduction in the same can also affect the earnings of the company.
• The major portion (around 55.8% in 9MFY22) of the revenue of JSW Infrastructure comes from the top five customers. If any of the customers start dealing with other competitors, the revenue of the company will be also get affected.
• JSW Infrastructure Limited operates and manages, all its port terminals through different concessions and license agreements or under the lease deeds. And to operate such ports it is also required to obtain the consent of the various government authorities like environmental clearance.
• JSW Infrastructure operates in a highly capital-intensive industry that requires a huge amount of capital expenditure for its future growth plan. Unable to raise the fund for its new projects or any kind of unfavourable condition to run its business will adversely affect its revenue and profit growth.
• The projects for cargo handling and port terminals are awarded through the tender and competitive bidding process. Apart from various factors, the pricing of the bidding is one the most concerning factor in a highly competitive environment.
• JSW Infrastructure is utilizing its capacity of around 55.5% as of 9MFY22. And incapability to maintain or further increase its current capacity utilisation can also affect the business of the company.
• Being a capital-intensive industry, as on Dec 2022, the company, JSW Infrastructure has a net debt of ₹2,875 crore that is already eating the bottom line margins of the company. Any kind of increase in debt due to capital expenditure can further affect the net profit margins of the company.

JSW Infrastructure IPO Grey Market Premium

According to market analysts, the grey market premium of JSW Infrastructure IPO is hovering around Rs.18 today which means the stock of JSW infrastructure IPO is in demand and is likely to list at premium.

GMP is the grey market price of unlisted shares offered in an IPO, and it may fluctuate as per the increasing demand for more shares through the bidding process in the IPO. However, it is not necessary the GMP is the true price and share will list with the same premium, it is an off-market speculation by the traders and their sentiments towards any stock.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

JSW Infrastructure IPO Review & Analysis

JSW Infrastructure is a part of one of the leading multinational conglomerates JSW Group. The management and operational structure of the company is quite impressive in terms of aggrieve expansion plans and revenue growth.

Over the past years, the company has registered strong financial growth. It enjoys around 55% operating margin which is quite impressive, though the net profit trails around 19% that is because of the high-interest cost paid against the loan borrowed by the company. However, JSW Infrastructure will use the fund raised through IPO for reducing these high-cost debts.

The repayment of loans and reduction of debt will also reduce its interest cost which is denting its bottom-line profit margins. And the company will also use part of the IPO fund for the capacity expansion and growth of the company making the further scope of more revenue and earnings making the JSW Infrastructure an attractive investment option.

On the valuation front, using the Net Asset Value (NAV) of Rs 23.62 as of June 30, 2023, the IPO is priced with the P/BV of ratio of 5.04 times. However, post-IPO the P/BV ratio will be 3.43, as the NAV will be increased to Rs 34.66 per share. While considering the annualized Q1FY24 earnings of the company, the post-IPO fully diluted EPS of the company will be around Rs 6, translating the PE ratio of 19.38 taking the upper issue price band of the IPO. Whereas its nearest listed competitor Adani Ports and SEZ Limited is trading at a PE Ratio of 28, making the JSW Infrastructure IPO issue price fairly priced. Hence, considering the reasonable valuation you can apply for the JSW Infrastructure IPO.

Whatever, JSW Infrastructure IPO is a financially sound company with strong management and promoters. You can invest in its shares with a long-term perspective and will enjoy the significant gain over the next few years making your portfolio a profitable journey.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

How to Apply for JSW Infrastructure IPO?

Just like other companies' IPO, applying for the JSW Infrastructure IPO is very easy if you choose the right platform. Moneysukh offers one-stop trading and investing solutions for IPO, equity, commodity and currency with the one-click facility to apply for an IPO online.

So, just open the trading account and demat account with Moneysukh, and enjoy unlimited trading or investing at nominal brokerage pricing. And if you already have a trading and demat account with Moneysukh, just follow the step given below to apply for the JSW Infrastructure IPO.

Steps to Apply for JSW Infrastructure IPO:

Step 1:As soon as JSW Infrastructure IPO opens for online bidding, you can apply.

Step 2:Just browse the trade.moneysukh.com and log in using your User ID & password.

Step 3:You can find here the IPO section and select the JSW Infrastructure IPO.

Step 4: Now you need to fill in other details such as price, quantity, and so on.

Note: While applying in any IPO, always bid at the cutoff price before submitting your application. 

Step 5:Finally complete the payment process and submit your IPO application successfully.

How to Check JSW Infrastructure IPO Allotment Status?

The IPO allotment process starts a few days after the IPO bidding process closes. As per the number of times, the IPO is subscribed, the allotment procedure is decided by the company and merchant bankers or banks dealing with the IPO launch procedure.

If the IPO is oversubscribed many times, then there is less chance of allotment in the IPO due to the limited number of shares issued by the company. If you have not been allotted any share of the company, your IPO application money will be refunded to your bank account. However, luckily if you have been allotted the shares of JSW Infrastructure you can check the allotment status through various online platforms including the Moneysukh website.

Read Here: How to check IPO allotment status on NSE, BSE through Moneysukh