Ahead of the IPO opening, the company raised Rs 1,260 crore from anchor investors, which saw participation from Morgan Stanley, Goldman Sachs, Abakkus Investment, SBI MF and the Government of Singapore among others.
The Rs 2,800 crore issue of JSW Infra is the first from the JSW conglomerate in 13 years.
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.
“The company has sustained revenue/EBITDA/PAT performance which grew at a CAGR of 41.2%/42.1%/62.3% during the FY21-23 period. At the upper price band, the issue is valued at a P/E of 29.7x based on FY23 earnings which is fair. We, therefore, recommend a Subscribe rating to the IPO,” said StoxBox.
The IPO is entirely a fresh equity issue of Rs 2,800 crore. The company has fixed a price band of Rs 113-119 per share and investors can bid for a minimum of 126 shares in one lot and in multiples thereafter.
About 75% of the offer is set aside for qualified institutional buyers, 15% is reserved for non-institutional investors and 10% for retail investors.Net proceeds from the issue will be utilised towards repayment of debt, financing capital expenditure, and other general corporate purposes.
“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.
JSW Infrastructure is the fastest-growing port-related infra company in terms of growth in installed cargo handling capacity and cargo volumes handled during FY21-23, and the second-largest domestic commercial port operator by cargo handling capacity in FY23.
For the three months ended June 2023, the company’s revenue from operations jumped 7% year-on-year (YoY) to Rs 878 crore, while net profit grew 68% to Rs 322 crore. India’s installed cargo handling capacity grew at a CAGR of 15.27% from FY21-23. During the same period, the cargo volumes handled in India jumped at a CAGR of 42.76%.
JM Financial, Axis Capital, Credit Suisse Securities, DAM Capital Advisors, HSBC Securities, ICICI Securities, Kotak Mahindra Capital, and SBI Capital are the bankers on the issue. KFin Technologies is the registrar.
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