The IPO of India’s second-largest port operator in terms of cargo handling capacity will open on September 25 for subscription and close on September 27.
Net proceeds from the issue will, among other things, be used to repay the company’s outstanding borrowings, Jaigarh port expansion, investment in an LPG terminal project, and finance the proposed expansion at Mangalore container terminal. Of the Rs.2800 crore, approx. Rs.1200 Cr will be allocated to capex, including bownfield proejcts such as establishing a LPG plant at Jaigarh Port and doubling the capacity of a container terminal, among others.
Another Rs.9000 Cr will be earmarked for debt repayment, while the remainder will primarily serve general corporate purposes.
Rationale behind entering the IPO market now
“To sustain our growth trajectory we must continue to explore and capitalise on growth opportunities. This requires substantial capex, including our planned greenfield ports. We are also eying opportunities under the government’s privatisation programme. Therefore building a war chest is essential for our continued expansion. The economy is on an upswing, entry barriers are high and the number of players are limited. Having a strong balance sheet positions us to benefit from this upswing,” shares Arun Maheshwari, Joint MD & CEO, JSW Infrastructure.
He further adds, “This sector is understood as the sunrise sector and growth here is crucial, so economic activities are bound to continue irrespective of political activities. The business stands on its own merits with economy growing at 6-8% and the port sector outpaces the overall economic growth rate.”
JSW Infrastructure has grown to become India’s fastest-growing port-related infrastructure firm in terms of growth by capacity and cargo volumes handled. The company’s business operations expanded from one port concession at Mormugao Port Trust in Goa, acquired by JSW in 2002 and started operations in 2004, to nine port concessions across the eastern and western coast of India, with a handling capacity of about 158.4m tonnes per year for multi-commodity cargo.
