About the company
Commencing its operations in 2004, JSW Infrastructure Limited is one of the fastest growing port-related infrastructure companies in terms of growth in installed cargo handling capacity and cargo volumes handled during Fiscal 2021 to Fiscal 2023, and the second largest commercial port operator in India in terms of cargo handling capacity in Fiscal 2023 (Source: CRISIL Report).
It’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, making them a diversified maritime ports company.
The company provides maritime-related services including cargo handling, storage solutions, logistics services, and other value-added services, and is evolving into an end-to-end logistics solutions provider.
The company develops and operates ports and port terminals pursuant to Port Concessions. Their ports and port terminals typically have long concession periods ranging between 30 to 50 years, providing us with long-term visibility of revenue streams. As of June 30, 2023, the capacity-weighted average balance concession period of their operational ports and terminals is approximately 25 years with Jaigarh Port, one of our largest assets, having a balance concession period of 35 years.
It is part of the JSW Group, a multinational conglomerate with an international portfolio of diversified assets across various sectors, including steel, energy, infrastructure, cement, paints, venture capital, and sports.
Their installed cargo handling capacity in India grew at a CAGR of 15.27% from 119.23 MTPA as of March 31, 2021, to 158.43 MTPA as of March 31, 2023. During the same period, their cargo volumes handled in India grew at a CAGR of 42.76% from 45.55 MMT to 92.83 MMT.
About the industry:
Overview of the logistics sector in India:
As per a report by Niti Aayog in 2021, India’s logistics cost as a % of GDP stood at around 14% compared to 10- 11% for BRICS countries and 8-9% for developed countries. Going forward, the logistics cost as a % of GDP for India is expected to decline driven by initiatives such as the implementation of GST, investments towards road infrastructure, development of inland waterways and coastal shipping, and thrust towards dedicated freight corridors among others. The “Sagarmala” (port-led prosperity) initiative was rolled out in April 2016 by the GoI to reduce logistics costs for both domestic and export-import cargo with optimized infrastructure investment. The Sagarmala programme aims at enhancing India’s port capacity to over 3,300 MTPA by 2025. According to the Ministry of Shipping, this would include 2,219 MTPA of capacity at Major Ports and 1,132 MTPA at Non-Major Ports by 2024 - 2025. While the Government has announced and implemented several initiatives such as Gati Shakti Scheme, National Logistics Policy, and Bharatmala Pariyojana to improve the transportation infrastructure in the country, improvement in such infrastructure will involve major capital expenditure and policy and administrative focus.
Overview of ports in India:
The Indian economy occupies a commercially enviable location on the global map, straddling the Bay of Bengal, Indian Ocean, and Arabian Sea with a coastline of approximately 7,517 km. Ports in India handle 90% of the volume and 70% of the value of India’s external trade. The maritime route is used to import crude petroleum, iron ore, coal, and other critical goods. India also has an extensive network of inland waterways in the form of rivers, canals, backwaters, and creeks. The total length of national waterways is 20,275 km spread across 24 States in the country.
The Indian port sector is divided into two segments: major ports and non-major ports. As of December 2022, the Indian coastline is dotted with 12 major and nearly 217 non-major ports. Major ports are administered directly by the central government, whereas non-major ports fall under the jurisdiction of state governments.
Port traffic:
As per CRISIL MI&A estimates, port traffic is expected to grow by 3-6% in Fiscal 2024, after growing by 8.2% in Fiscal 2023. The growth in Fiscal 2023 was primarily driven by the robust growth in coal cargo traffic on the back of higher domestic demand due to increased power requirements in the country.
Over fiscal 2024 to Fiscal 2028, growth at Indian ports is expected to be at 3-6%. However, factors such as tapering growth in coal due to import substitution along with plateauing of iron ore exports and muted growth in the POL segment led by slower consumption in crude oil are expected to moderate cargo traffic over the long term.
Issue size:
The entire Rs. 2800 crore public offer of JSW Infrastructure Limited comprises of fresh equity issue.
Objects of the issue and proceeds utilization:
| Purpose | Proceeds (₹ crores) |
|---|---|
| Prepayment or repayment, in full or part, of all or a portion of certain outstanding borrowings through investment in wholly owned Subsidiaries, JSW Dharamtar Port Private Limited and JSW Jaigarh Port Limited | 880 |
| Financing capital expenditure requirements through investment in a wholly owned subsidiary, JSW Jaigarh Port Limited, for proposed expansion/upgradation works at Jaigarh Port | 1029.03 |
| Financing capital expenditure requirements through investment in wholly owned Subsidiary, JSW Mangalore Container Terminal Private Limited | 151.04 |
| General corporate purposes | Balance |
Financial information and other valuation metrics
| Financial Year | Total Assets (₹ crores) | Total Revenue (₹ crores) | Profit After Tax (₹ crores) | EPS | EBITDA (₹ crores) |
|---|---|---|---|---|---|
| March 31, 2021 | 8254.55 | 1,678.26 | 284.62 | 1.62 | 891.13 |
| March 31, 2022 | 9429.46 | 2,378.74 | 330.44 | 1.82 | 1215.11 |
| March 31, 2023 | 9450.66 | 3,372.85 | 749.51 | 4.12 | 1798.30 |
Risk factors to consider:
Relying on concession and license agreements: The company relies on concession and license agreements from government and quasi-governmental organizations to operate and grow its business. It paid nearly 17% of its revenues from operations as Fees to regulatory authorities, They have several obligations under these agreements and a breach of the terms could lead to termination, which could materially adversely affect the business, results of operations, financial condition, and cash flows.
Dependence on a few types of cargo: A substantial portion of the volume of cargo handled by the company is dependent on a few types of cargo like coal and iron ore (more than 65%) and any significant reduction in, or the elimination of such cargo could adversely affect their profitability.
Litigation related to environmental clearance: 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. Any adverse outcome in these litigations may have an adverse effect on the business, financial condition, results of operations, and cash flows.
Higher related party transactions: The company has entered into and may continue to enter into a substantial amount of related party transactions (65-89% of the total income)with entities in the JSW Group.
IPO Schedule
| Issue Period | 25th September to 27th September 2023 |
|---|---|
| Price band | ₹ 113 - 119 |
| Minimum Bid quantity | 126 & Multiples thereof |
| Deadline for accepting UPI mandate | Until 5 PM on the issue closing day |
| Finalization of Allotment | 3rd October 2023 |
| Initiation of Refunds | 4th October 2023 |
| Credit of Shares | 5th October 2023 |
| Date of Listing | 6th October 2023 |
| Mandate end date | 13th October 2023 |
| Anchor Investors Lock-In End Date | 27th October 2023 |
How to apply to the JSW Infrastructure Limited IPO?
You can apply for the JSW Infrastructure Limited IPO using any supported UPI app by following two steps:
- Enter your bid on Kite
- Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.
How to check the allotment status for JSW Infrastructure Limited IPO?
You can check the allotment status for the JSW Infrastructure Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.