JSW Infrastructure IPO Worth Rs 2,800 Crore Opens Today. Should You Subscribe?

Port-related infrastructure firm JSW Infrastructure's initial public offering is opening for public subscription on Monday, Sept. 25. The three-day IPO issue, priced in the range of Rs 113–119 per share, will close on Sept. 27.

JSW Infrastructure IPO comprises a fresh issue of 23.53 crore equity shares with the aim of raising Rs 2,800 crore. The company has raised Rs 1,260 crore from anchor investors, allotting nearly 10.58 crore shares at Rs 119 apiece to 65 anchor investors.

The proceeds of the issue will be used to pay debt, finance capital expenditure requirements, and for general corporate purposes.

JSW Infrastructure's Ebitda margins have remained stable at 53% from FY21 to FY23, while PAT margins have surged from 17% to 22% and reached 35% for 3M FY24, said Ventura Securities in a note.

"JSWIL strategically positions its ports in close proximity to JSW group assets and industrial clusters. The remarkable performance of JSWIL is evident through its impressive growth rates. The company's ports and terminal concessions offer strong revenue visibility," said the brokerage while recommending a subscriber rating to the IPO.

"The company has a track record of sustained revenue, Ebitda, and PAT performance, which grew at a CAGR of 41.2%, 42.1%, and 62.3%, respectively, during the FY2021-23 period," said Stoxbox in a note.

Being a capital-intensive business requiring huge capital, Stoxbox believes JSW Infrastructure is well-positioned to maintain its dominant position in the port industry in India regarding cargo handling capacity and volumes.

"On the upper price band, the issue is valued at a P/E of 29.7 times based on FY2023 earnings, which we feel is fairly valued. We, therefore, recommend a subscribe rating for the issue," it said.

"At higher price band, JSWIL is demanding a TTM P/E multiple of 28.7 times (to its TTM earning per share of Rs. 4.1), which is in line to only listed peer company," said Choice Broking in a note while recommending a subscribe the issue.

Part of the conglomerate JSW Group, JSW Infrastructure provides maritime-related services, including cargo handling, storage solutions, logistics services, and other value-added services, to its customers.

As of June 30, the company has a portfolio of nine port concessions, including two greenfield ports, and seven terminals, with a combined cargo handling capacity of 158.43 million metric tonne per annum (MTPA). Additionally, it manages two port terminals in the UAE through operation and maintenance agreements, with a capacity of 41 MTPA.