JSW Infrastructure IPO Day 2: Subscription, GMP And Other Details; Should you Buy?

JSW Infrastructure IPO Day 2: The JSW Infrastructure public issue received a good investor response on the first day of subscription. The book build issue will remain open for subscribers till Wednesday, September 27, 2023. JSW Infrastructure Limited aims to raise Rs 2,800 crore from its initial offer, which will be 100 per cent fresh in nature. The public offer is proposed for listing on BSE and NSE.

Key Points Investors Should Know:

JSW Infrastructure IPO Subscription

The book build issue has been subscribed 0.43 times after one day of bidding. The retail portion of the public offer got subscribed 1.38 times whereas its NII and QIB portion got subscribed 0.60 times and 0.03 times respectively.

By 10:12 AM on day three of bidding, the public issue has been subscribed 0.55 times whereas its retail portion has been subscribed 1080 times. The public issue has been subscribed 0.76 times in NII category while its QIB portion has been subscribed 0.03 times.

JSW Infrastructure IPO Price Band

The price band for the offer has been set at Rs 113-119 per share.

JSW Infrastructure IPO Size

The company plans to mop up Rs 2,800 crore from the public issue at the upper price band. The IPO comprises only a fresh issue component by the company and it does not have an offer-for-sale portion.

Out of the total offer size, Rs 1,260-crore was raised by the company from several anchor investors on September 22, including 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, Sunil Singhania-owned Abakkus, 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 issue proceeds 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 at Rs 4,228.39 crore as of June 2023.

Further, the fresh issue proceeds will also be used for the expansion at 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 126 equity shares, i.e. one lot and in multiples of 126 shares thereafter. The minimum application amount for retail investors works out to be Rs 14,994 (for 126 shares) and their maximum investment is Rs 1,94,922 (1,638 shares) as they can not exceed the investment limit of Rs 2 lakh.

JSW Infrastructure: About the Company

JSW Infrastructure provides maritime-related services, including, cargo handling, storage solutions, logistics services and other value-added services to customers. Its ports and port terminals typically have long concession periods ranging between 30 to 50 years, providing it with long-term visibility of revenue streams.

JSW Infrastructure Financial Performance

JSW Infrastructure’s revenue from operations recorded a CAGR of 41.15 per cent during FY21-FY23, and profit after tax averaged a growth rate of 62.28 per cent in this period.

On a year-on-year basis, the net profit at Rs 749.5 crore for the year ended March FY23 increased by 126.8 per cent and revenue from operations jumped 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 per cent on-year to Rs 322.2 crore and revenue increased by 7.1 per cent to Rs 878 crore compared to June FY23 quarter.

JSW Infrastructure IPO: GMP

As per the market observers, JSW Infrastructure IPO grey market premium (GMP) today is Rs 21, which is Rs 4 higher from yesterday’s GMP of Rs 17. They said that Indian stock market snapping its four days beating on Monday could be the possible reason for rise in grey market sentiments in regard to the public issue. They said that in case of trend reversal on Dalal Street, this sentiment may further improve as the market has remained dull for near one week.

JSW Infrastructure IPO Share Allotment & Listing

The basis of the allotment of IPO shares will be finalised 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. The Initiation of refunds (if any, for anchor investors) or unblocking of funds from the ASBA account will take place by October 4.

The trading in the equity shares of JSW Infrastructure on the BSE and NSE will be commenced with effect 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 book-running lead managers to the issue. Kfin Technologies is the registrar of the offer.

Should You Invest?

Most analysts recommended a subscribe rating to the IPO 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 parentage.

“This issue is available at P/EPS of 28.88x, which appears reasonably priced as the company’s revenue visibility is strong for the future with steady margins. Hence, we recommend subscribing to the issue for listing gains and long-term,” said Canara Bank Securities.

“We like JSW Infra given its dominant position among the port operators in India, along with its broad cargo profile and diversified geographical presence. The IPO looks attractive” said brokerage Motilal Oswal while assigning a subscribe rating.

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