JSW Infrastructure IPO Details

JSW Infrastructure Limited provides maritime-related services including cargo handling, storage solutions and logistics services. The company develop and operates ports and port terminals under Port Concessions. JSW Infrastructure Limited is part of the JSW Group. JSW Infrastructure is the 2nd largest commercial port operator in the country in terms of cargo handling capacity in Fiscal 2022.

OBJECTS OF THE ISSUE

• Payment of borrowings.
• Financing capital expenditure requirements. General corporate purposes.

Sajjan Jindal

Chairman and Non-Executive Director of the Company. He is the vice chairman of the World Steel Association and is also on the board of directors of JSW Energy Limited. He has over 36 years of experience in the manufacturing and steel industry.

Nirmal Kumar Jain

Vice Chairman and Independent Director of the Company. He joined Jindal Iron & Steel Company Limited in 1992 as general manager – finance. He has over 21 years of experience in the financial services sector.

Arun Sitaram Maheshwari

Joint Managing Director and Chief Executive Officer. He has previously been associated with Jindal Strips Limited, Jindal Iron & Steel Company Limited and Jindal Vijaynagar Steel Limited. He has over 30 years of experience in the areas of marketing, import (raw materials), corporate strategy and infrastructure.

Lalit Chandanmal Singhvi

Whole Time Director and Chief Financial Officer of the Company.He has over 21 years of experience in management and finance. He has been associated with our Company since January 15, 2015 as senior vice president – finance and commercial.

Kantilal Narandas Patel

Non-Executive Director of the Company. He has over 28 years of experience in the financial services sector and the steel industry. He was previously associated with JSW Holdings Limited as joint managing director and chief executive officer.

COMPANY PROFILE

• JSW Infrastructure’s operations have expanded from one Port Concession at Mormugao, Goa which was acquired by the JSW Group in 2002 and commenced operations in 2004, to nine Port Concessions as of June 30, 2023 across India.
• It is the fastest-growing port-related infrastructure company in terms of growth in installed cargo handling capacity and cargo volumes handled from Fiscal 2021 to Fiscal 2023.
• 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 west coast, and Odisha and Tamil Nadu on the east coast. The company’s international presence includes 2 terminals at Fujairah and Dibba in the UAE
• The company’s ports and port terminals typically have long concession periods ranging between 30 to 50 years, providing long-term visibility of revenue streams.

COMPETITIVE STRENGTHS

• Fastest growing port-related infrastructure company and second largest commercial port operator in India.
• Strategically located assets at close proximity to JSW Group Customers (Related Parties) and industrial clusters supported by a multi-modal evacuation infrastructure.
• Strong financial metrics with a growing margin profile, return metrics, and growth. Diversified operations in terms of cargo profile, geography, and assets.
• Demonstrated project development, execution, and operational capabilities.
• Benefit from the strong corporate lineage of the JSW Group and a qualified and experienced management team.

KEY STRATEGIES

• Continue to pursue greenfield and brownfield expansions with a focus on Non-Major Ports Pursue acquisition opportunities in similar businesses.
• Increasing third-party customer base.
• Pursue opportunities in synergistic businesses to increase revenue diversification. Focus on building environment friendly and sustainable operations along with growth.

KEY CONCERNS

• A substantial portion of the volume of cargo handled by the company is dependent on a few types of cargo.
• It derives a substantial portion of its revenue from its top five customers Certain of its Subsidiaries have incurred losses in the past.
• It operates in a capital-intensive industry and its current and future expansion plans may require significant capital.
• The company's business operations are subject to a wide range of environmental and other regulations, and any changes to these regulations could increase the company's costs.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

As a division of the JSW Group, JSW Infrastructure offers logistical, cargo handling, and other maritime-related services. The second-largest commercial port operator in India, the corporation has the fastest rate of growth in the infrastructure associated with ports.

The business's financial performance is quite strong, and both its sales and net worth are increasing. The ratio of debt to equity is 0.54, which is quite favorable. The issue size is about 2800 crore, and the IPO is full of fresh issues. last but not least, coming to the IPO valuation the issue is priced at a P/E valuation of about 28x, and EV/EBITDA is 15.17 which looks reasonable.

We will therefore subscribe to this IPO for listing benefits and for long terms due to valuation and current market sentiments.

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