JSW Infrastructure IPO Day 2: The public issue JSW Infrastructure received good responses from investors on the first day of subscription. The bookbuild issue will remain open for subscribers till Wednesday, September 27, 2023. JSW Infrastructure Limited aims to raise Rs 2,800 crore from the initial offer, which will be 100 percent fresh in nature. The public offer is proposed for listing on BSE and NSE.
Key points investors need to know:
JSW Infrastructure IPO Subscription
The bookbuild edition was subscribed to 0.43 times after one day of bidding. The retail portion of the public offering was subscribed 1.38 times, while the NII and QIB portions were subscribed 0.60 times and 0.03 times respectively.
At 10.12 am on day three of the bidding, the public issue was subscribed 0.55 times, while the retail portion was subscribed 1,080 times. The public issue has been subscribed 0.76 times in the NII category, while the QIB portion has been subscribed 0.03 times.
JSW Infrastructure IPO Price Range
The price band for the offer has been set at Rs 113-119 per share.
JSW Infrastructure IPO Size
The company plans to raise Rs 2,800 crore from the public issue in the upper price band. The IPO only includes a new issue portion by the company and does not include an offer to sell portion.
Of the total offering size, Rs 1,260 crore was raised by the company on September 22 from various investors including the Monetary Authority of Singapore, Morgan Stanley, the Government of Singapore, HSBC, The Master Trust Bank of Japan, Goldman Sachs, Theleme India Master Fund, Principal Global, Abakkus, owned by Sunil Singhania, LIC Mutual Fund, SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Aditya Birla Sun Life Trustee and Max Life Insurance Company.
JSW Infrastructure IPO Objectives of Fresh Issue
The net proceeds from the issue will be used to repay debts amounting to Rs 880 crore, and Rs 1,029.04 crore will be spent on expansion or upgrade works at Jaigarh Port, owned by subsidiary JSW Jaigarh Port. The company had a total consolidated debt of Rs 4,228.39 crore as of June 2023.
Further, the proceeds from the fresh issue will also be used for the expansion of the Mangalore Container Terminal (Mangalore container project), owned by subsidiary JSW Mangalore Container Terminal, at a cost of Rs 151.05 crore. And the remaining amount will be used for general corporate purposes.
JSW Infrastructure IPO Lot Size
Investors can bid for a minimum of 126 ordinary shares, i.e. one lot and then in multiples of 126 shares. The minimum application amount for retail investors is Rs 14,994 (for 126 shares) and their maximum investment is Rs 1,94,922 (1,638 shares) as they cannot exceed the investment limit of Rs 2 lakh.
JSW Infrastructure: About the Company
JSW Infrastructure provides maritime services including cargo handling, warehousing solutions, logistics services and other value-added services to customers. The ports and port terminals usually have long concession periods, ranging from 30 to 50 years, making long-term revenue streams visible.
Financial performance of JSW infrastructure
JSW Infrastructure’s operating revenue recorded a CAGR of 41.15 percent during FY21-FY23, and profit after tax averaged a growth rate of 62.28 percent during this period.
On a year-on-year basis, net profit rose 126.8 per cent from Rs 749.5 crore for the year ended March FY23 and revenue from operations rose 40.5 per cent to Rs 3,194.7 crore during the same period.
In the quarter ended June FY24, the company’s net profit grew 67.3 percent year-on-year to Rs 322.2 crore and revenue rose 7.1 percent to Rs 878 crore compared to the June quarter FY23.
JSW Infrastructure IPO: GMP
According to market observers, the JSW Infrastructure IPO gray market premium (GMP) today stands at Rs 21, which is Rs 4 higher than yesterday’s GMP of Rs 17. They said the Indian stock market posting its four-day gain on Monday could be the possible reason could lead to a rise in gray market sentiment regarding the public issue. They said that in case of a trend reversal in Dalal Street, this sentiment could improve further as the market has remained dull for almost a week.
JSW Infrastructure IPO Share Allotment and Listing
The basis for allotment of IPO shares will be finalized by the company in consultation with the BSE by October 3 and the shares will be credited to the demat accounts of eligible investors by October 5. investors) or the unblocking of funds from the ASBA account will take place by October 4.
Trading of JSW Infrastructure shares on the BSE and NSE will commence from October 6, as per the IPO schedule.
JM Financial, Axis Capital, Credit Suisse Securities (India), DAM Capital Advisors, HSBC Securities and Capital Markets (India), ICICI Securities, Kotak Mahindra Capital Company and SBI Capital Markets are the lead managers of the issue. Kfin Technologies is the registrar of the offering.
Do you need to invest?
Most analysts recommended a tender rating for the IPO based on the company’s decent financial track record and fair valuations. They believe the company will benefit from the government’s focus on port development, limited competition and strong parenting.
“This issue is available at a price/earnings per share of 28.88x, which seems reasonably priced as the company’s revenue prospects are good going forward with stable margins. Therefore, we recommend subscribing to the issue for listing gains and for the long term,” Canara Bank Securities said.
“We like JSW Infra given its dominant position among port operators in India, along with its broad freight profile and diversified geographical presence. The IPO looks attractive,” broker Motilal Oswal said while assigning a subscription rating.
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